DUBLIN-BASED Merrion Capital has taken a 40 per cent stake in the consortium proposing to buy the Irish business of WorldSpreads, the listed financial betting group.
WorldSpreads said yesterday it had agreed to sell its highly profitable Irish division to a consortium led by its co-founder and chief operations officer, Brian O’Neill.
The sale price will be about €11.3 million and the deal is subject to shareholder and regulatory approval. Merrion will pay about €4.5 million for its stake.
WorldSpreads Ireland is the largest financial spread-betting company here, with an estimated 50 per cent market share. It derives its revenues from client trading in stock-market indices, currencies, commodities and individual stocks.
It generated a pretax profit of €4.3 million on revenue of €7.9 million in the 12 months to the end of March 2009.
Merrion chief executive John Conroy said the investment represented an “attractive diversification opportunity” for the group.
WorldSpreads, which is listed in Dublin and London, said the Irish business was now non-core and the deal would allow it to rationalise its cost base. Its activities will now be focused on London and its other international operations.
The sale will involve a payment of €6.68 million on completion. An additional €3.23 million will be paid over the next two years while WorldSpreads will also receive the proceeds of the sale of 1.89 million shares owned by Mr O’Neill and other members of the consortium.
The terms of the deal had been revealed by The Irish Times yesterday.
The Irish business will continue to trade as WorldSpreads for up to five months and will also use its website for this period. WorldSpreads will provide the Irish business with a “fully serviced” IT trading platform for an agreed fee.
The consortium has agreed not to compete with WorldSpreads in Britain, Spain, Hungary or Greece for two years.
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