Eircom has invested a total of €10.4 million (£8.2 million) for a 30 per cent stake in the e-commerce software development group Flexicom. The move means that Flexicom is unlikely to take a stock market listing for the foreseeable future. Eircom does not have any options to increase its stake beyond the initial 30 per cent.
The Eircom investment values Flexicom at €34.7 million (£27.3 million), a substantial increase on the valuation put on the company 12 months ago when institutional investors bought 19 per cent of Flexicom in a deal that valued the company at that time at £19 million (€24 million).
Flexicom said then that it planned to take a stock market listing in 1999, but the group's head of marketing, Ms Orla Brannigan, said yesterday that there are no current plans to go to the market. "Our investors are fully supportive of the Eircom investment," Ms Brannigan stated.
Of the €10.4 million investment, Eircom is investing €7.1 million (£5.6 million) directly in the company, with the remaining €3.3 million (£2.6 million) going mainly to Flexicom's founder-shareholders, Mr Pat Shiel and Dr John Clarke. Prior to the Eircom investment, Mr Shiel held 56 per cent of the company and Dr Clarke 10 per cent. Institutions who subscribed to the placing last year - including AIB, Mercury Asset Management and Standard Life - held just under 19 per cent.
Flexicom develops software for e-commerce applications and has widened its product base to mainstream card processing. The investment by Eircom is part of the group's strategy of expanding its multimedia strategy.
