Irish tech entrepreneur makes a tidy return on investment

Long’s tidy return; IT services firm weathering recession; AIB’s search for new leader; mixed signals on Air India’s hub decision

Terminal 2 tries to land Air India deal 

MIXED SIGNALS are coming from Air India as to whether it might choose Dublin airport’s Terminal 2 as a new European hub to replace Frankfurt, which it quit in October.

Dublin Airport Authority boss Declan Collier has made a couple of trips to India to try and land a deal with the airline.

This included a visit around St Patrick’s Day, which coincided with a trip by new Minister for Transport Leo Varadkar, who, as it happens, has Indian roots.

A spokesman for the Minister said Air India and its government is still “actively considering” setting up a new hub in Europe.

“It is now considering whether a hub in Europe is required or if it would be preferable to develop hub operations from the Indian regions through Delhi,” a spokesman told me.

“Minister Varadkar is confident that Dublin is still very much in contention if a European hub for Air India is re-established.”

But quotes from an unnamed Air India official in a newspaper report locally poured a large bucket of cold water on the suggestion that the airline might fly to the US via Dublin.

“We do not plan to make any hub in Europe, or Dublin for that matter, because it does not make sense for a carrier like us, which has direct flights to the US,” the airline official said, adding that Air India had lost money in Frankfurt.

Other local media suggest that a team from Air India will visit Dublin in the next six to eight weeks to check out T2.

Here’s hoping.

Deals keep on flowing for Atlantic

ATLANTIC BRIDGE Ventures, a private equity vehicle backed by Irish tech entrepreneur Brian Long, has made a tidy return on its investment in Nanaotech Semiconductors.

The UK-based company was sold yesterday to Gennum Corporation for $34 million, with a potential earn-out of $6 million over the next 12 months if certain targets are met.

ABV owned 28 per cent of Nanaotech and had invested $5.2 million in the business since the semi-conductor company was founded in 2004.

So the sale should see it bank about $9.5 million, which equates to a healthy return of 1.8 times.

“It’s a great company that’s going very well,” Long told me yesterday. “It has has grown rapidly in the past year in its space, which is high-speed communications for fibre optics.

“This is a good outcome for everyone,” said Long, who made his name, and fortune, with Parthus Technologies and its spin-out GloNav.

Long sees the deal as a sign that the external funding environment for technology companies is improving.

“The IPO market is starting to open up again,” he said.

This is ABV’s fourth divestment out of the 12 that it made through its first fund. But it won’t be resting on its laurels.

It raised €80 million recently for a second fund and hopes to close a second round of finance for that by the end of this year, which should bring it up to about €120 million.

“We’re looking at some new investment opportunities at the moment,” he said, without revealing any names.

Long is also optimistic for the Irish tech market, in spite of the recession. “There’s a very active market for the first time in many years.”

“There’s a lot of good work going on in the Irish tech sector at the moment and, hopefully, there will be opportunities for Irish companies to go public in the near future.

“The markets are open for smaller companies to go public. I’d love to see that happen again.

But Long declined to confirm reports that Envivio, a high-growth San Francisco firm involved in video streaming in which ABV is invested, will list on Nasdaq in July.

It was suggested that Envivio would have a valuation of between $280 million and $340 million on an initial public offering.

“I’m not going to comment on that,” he said.

Do you have what it takes to be AIB boss?

WHILE AIB executive chairman David Hodgkinson is preparing to reveal the full extent of its loan losses when its results are published next Tuesday, the bank is privately looking for a new chief executive.

Hodgkinson, who sees himself as a caretaker manager while the search continues, has hired heavyweight corporate headhunters Korn/Ferry in London to draw up a list of candidates.

It will be interesting to see who steps forward for interview.

Being chief executive of AIB is hardly a plum job these days, particularly as it now State controlled.

The Government salary cap of €500,000 is also unlikely to be attractive to too many top banking executives.

Mind you, Mike Aynsley has shown at Anglo that there it is still possible to draw down a seven-figure remuneration at a State-owned Irish bank.

AIB’s new boss will be tasked with overseeing a dramatic reduction in the bank’s 12,000-strong headcount in the Republic; the disposal of €19 billion in excess loans and other assets; and further Government control as the bank’s bailout spirals over the €20 billion mark.

There’s also the integration with EBS.

It will be a tough gig.

Version 1 has last word on turnover

DUBLIN-BASED IT services company Version 1 appears to be weathering the recession successfully.

The company booked a 13 per cent increase in turnover in 2010, while its operating profit more than doubled to €1.2 million.

This was driven by securing 40 new clients and acquiring PM Centrix.

Founded in 1996 and chaired by accountant Anthuan Xavier, Version 1 is involved in IT consultancy.

In essence, it helps entities to manage their IT systems more effectively and efficiently – services that are always popular with cash-strapped businesses in a recession.

It is exclusively focused on its domestic market and has been punching above its weight against international competitors such as Accenture, IBM and HP.

“There’s plenty of growth for us to target in Ireland,” co-founder Justin Keatinge told me this week.

Version 1 currently has 220 staff and Keatinge indicated that there might be some good news on that front in the near future.

“We hope to have something to report soon,” he said.

But he was coy about providing client names, although energy provider Airtricity is known to be a customer. It also works for 11 Government departments.

Keatinge was more forthcoming about its future prospects.

“We don’t think we’ll have any problem hitting €30 million in turnover in the near future,” he said. “This year we expect to grow by 30 per cent.”

What are the chances of one of its international competitors wanting to acquire what is clearly a successful business?

“We’ve had inquiries but we’re not interested. We want to do this ourselves.”

Little Things

It’s not just Paul Donovan who is being handsomely rewarded at Eircom. The cash-strapped company’s bondholders’ report reveals that chairman Ned Sullivan is paid a fee of €247,500 a year. And that’s after accepting a 10 per cent “voluntary reduction”.

Sullivan, a former director of Anglo Irish Bank, has a three-year contract with Eircom that expires in October 2011.

Deputy chairman Jerome Barrett, a representative of the staff Esot, is paid €95,400.

Non-executive directors Greg Sparks and Terry Clontz earn €81,000 each while Lee Theng Kiat and Tan Guong Ching are paid €67,500 and €74,500 respectively.

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Drury Communications has landed the PR contract for the Commission for Aviation Regulation. Drury is no stranger to aviation having previously represented Aer Lingus, working on its its IPO among things.

Among the losing groups for the contract was Murray Consultants, which had represented Ryanair for more than a decade until late last year.

Zelos Communications was the incumbent agency.

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Monex Financial Services is to create 20 jobs at its head office in Killarney after securing a number of new contracts. It currently employs 135 staff.

Set up in Killarney in 1997, Monex handles payments valued at more than €17.2 billion. It processes over 100 million transactions a year.

Last month, Monex announced that pretax profits had almost doubled to €5.3 million in 2010.

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Just Mobile, which is chaired by entrepreneur Seán Melly, has signed a distribution deal with fuel retailer Topaz, to add to its existing arrangement with Spar.

Its mobile products will shortly be available in 109 Topaz service stations across the country.