(Reuters) - IT outsourcing company Regenersis Plc RGS.L said it bought Blancco Oy Ltd, a Finnish data erasure company, for 60 million euros to win business from upcoming data security regulations in Europe.
Shares in Regenersis jumped as much as 12 percent after it announced the purchase, of which 58.7 million euros ($80.7 million) will be paid in cash and the rest in stock.
“They have made a big acquisition by acquiring high-margin business Blancco which will boost their bottom-line”, Panmure Gordon & Co analyst Paul Jones told Reuters.
Data erasure technology destroys electronic data on a hard disk or other digital media to protect confidential information.
Regenersis said a European General Data Protection Regulation expected to come into force next year will increase the compliance burden on companies holding consumer data.
“With new European legislation due to come into force in 2015, the deal will provide further growth opportunities across Europe and expand our presence in this exciting sector”, Regenersis spokesman Mike Bartlett told Reuters.
The company said it plans to fund the purchase of unlisted Blancco with 100 million pounds ($166 million) it raised through a share placement.
($1 = 0.6011 British Pounds)
($1 = 0.7271 Euros)
Reporting by Aastha Agnihotri in Bangalore