Energy firm to enter exclusive bid talks with Ion

Alternative energy and services group SWS has entered exclusive talks with venture capitalist Ion Equity on the terms of a proposed takeover.

Following the decision of the Cork group's board yesterday, Ion looks to be in pole position to buy the company.

The decision means Ion's rival bidder One51, the utility group led by former IAWS chief Philip Lynch, is likely to lose the opportunity to buy SWS for the second time in 15 months. A One51 bid to buy SWS for €64 million ran aground in September 2005 after some of its shareholders said they were not happy with the deal.

SWS came back on the market last month with a €100 million price tag. However, it is known that at least one of the bids received since then was in the region of €120 million.

Two weeks ago, SWS said it had shortlisted Ion Equity and One51. As a result of yesterday's decision, the venture capital firm looks to be the likeliest suitor.

Bandon, Co Cork-based SWS has four divisions. These include a business contracting arm which provides services such as payroll, billing, human resources management and accounts payable, on a contract basis for a range of major clients. The section already employs 250 people and has announced its intention to increase this by 120.

Its alternative energy division owns wind farms with the capacity to produce 70 megawatts (mw) of electricity and has interests in similar projects under development which will bring its output to 200mw.

It also has a waste management business and a section that provides services to farmers such as cattle registration. The business services, energy and waste management operations are for sale.

Co-ops Lisavaird, Drinagh, Bandon and Barryroe own SWS.