One51 on shortlist to acquire SWS for €120m

Philip Lynch's utility player, One51, is back in the running for the business services and energy group SWS, which has attracted bids of over €120 million. Cork-based SWS, which has been seeking a buyer, yesterday announced that it has shortlisted two candidates from a number of bidders.

The group did not name the parties, but it is understood that One51 and venture capitalist Ion Equity are the two it has chosen to go to the next stage. One51, the vehicle Mr Lynch created out of the former IAWS Co-op, pulled out of a €64 million deal to buy SWS in September 2005.

At that time, its chairman Denis Buckley said that some SWS shareholders were unhappy with the proposed sale. The transaction was regarded as central to One51's plans to float.

In a statement, SWS said it has shortlisted two bidders "to proceed to the due diligence phase of a trade sale process" that will result in the disposal of its energy, waste and business process outsourcing operations.

SWS is owned by a number of Cork co-ops, including Lisavaird, Drinagh, Bandon and Barryroe. It has a range of activities across five divisions - agriculture, property, outsourcing, business services and environmental services, which includes alternative energy and waste management branches.

Investors regard energy and waste as potentially high-growth areas and these operations are particularly attractive to the group's suitors. Its business services division is also highly regarded.

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

Earlier this week it emerged that another energy player, Imera Power, had made an indicative offer of €127.5 million. However, it appears that that bid has now fallen by the wayside. Other companies and individuals said to have been interested, or actually bidding, were security and business services group Newcourt, co-op Dairygold and Quinn group boss Seán Quinn.

One51's shareholders include Glanbia, Kerry and the UK-based Co-op Wholesale stores. Last year, it cut all ties with food group IAWS, in which it held shares, by redistributing its €120 million-plus interest amongst its own stakeholders.

It owns 26 per cent of the toll roads, waste management and energy group NTR and a controlling interest in recycling firm Techrec. It also owns the Irish Pride bakery.

Its assets were valued at €230 million last year.