One51 valued at €1bn ahead of grey market

One51 chief Philip Lynch has put a valuation of at least €1 billion on the investment firm ahead of grey market trading in its stock in September and the introduction of a new private-equity fund next year. Arthur Beesley, Senior Business Correspondent reports

Such a valuation excludes some €200 million in new capital which One51 is raising from its existing investor group, he said after its annual general meeting (agm) in Dublin yesterday.

He also indicated it may raise a similar amount from investors to part finance a new private-equity fund next year. The fund could be valued at €2.5-€3 billion and it will make individual investments of up to €1 billion to take positions of up to 40 per cent in established Irish firms, he said. Mr Lynch revealed after the agm that One51 has spent some €140 million on a deal in the recycling sector. He declined to name its acquisition target, but Limerick firm Hegarty Metal Recycling and other smaller operators are understood to be involved.

"We have a big enough recycling business in the UK and it has interests in the UK as well as in Ireland. I think the combination of the two are very very important," Mr Lynch said.

He told the meeting One51 remained committed to its efforts to buy out Irish Continental Group (ICG) with Doyle Shipping. He said the companies would be happy to retain their 20 per cent position in the long term. He also pointed out One51's ICG stake represented an average of only 3 per cent of its total value.

"In the totality of what we're at, I think that One51 is probably worth €1 billion today or at least I think if someone in the market walked off the street and bid us €1 billion for it I don't think I could ask shareholders to take it. Plus we start off with a €400 million investment in NTR, so you can see where ICG fades into total insignificance," he said.

However, he declined to comment on a valuation exercise by Davy in advance of grey market trading. "No I haven't a number from Davy, not yet. I wouldn't try to up the ante on them. They're doing a valuation and we'll leave that to take its course but it will be fine. The valuation won't matter an awful lot."

The introduction of the grey market will enable holders of One51 loan notes to convert their notes into tradeable stock. An issue of notes last year valued the company at around €300 million.

"I suppose it's about growing up really. You crawl and you creep and you go to the next stage. A full listing is something that the board will consider, this is purely a mechanism to get to trade in the shares."

The private-equity fund will operate with is own management and investment team as a subsidiary of One51 Capital, the vehicle that holds the company's stake in infrastructure group NTR and other financial investments. "One51 Capital today on its own is worth €500-€600 million , so we can leverage that and also bring in capital," he said.

"We'd have to give away some of One51 capital in order to do that but we'd happily do that to give us the momentum . . . There's a lot of people who have been very successful walking off the street to Lombard & Ulster or Seanie FitzPatrick [ of Anglo Irish Bank] or whoever it might have been 20-25 years ago or the banks, that have made a lot of money and they are at an age when they might like to take some money off the table."

He revealed at the agm that developer Bernard McNamara was an investor in One51, but declined to name other investors.