First Rate Enterprises, a subsidiary of Bank of Ireland, has acquired the British data processing company, Active Business Services.

First Rate, which has an 85 per cent share of Irish foreign exchange business, will not say how much the acquisition is worth, but sources in the data processing industry value Active Business Services at between £7 million and £8 million.

Active Business Services specialises in electronic funds transfers (EFT), processing over 20 million EFT payment instructions each year for the main British banks.

It currently employs 280 people working in processing sites in Birmingham and Sheffield. First Rate plans to bring Active into the Republic where the market for outsourcing data processing by banks and other businesses is growing.

The reason behind the acquisition is to offset losses in First Rate's foreign exchange division when European monetary union begins.

First Rate was formed in 1990 initially to target the foreign exchange market. It soon controlled this market by staying open for longer hours and operating more outlets around the State than its competitors.

After this the company entered the VAT refund business and followed this by opening a data processing facility in Spiddal, Co Galway called Datamasters.

Its biggest contract to date has been to operate a foreign exchange service in 20,000 British post office outlets.

The relationship between First Rate and Bank of Ireland has developed since 1990. "While we were seen as a one product business originally, I think the bank now sees the company as a vehicle to explore new ideas and forms of business," said Mr David Kennedy, the strategic development director of First Rate Enterprises.