BUSINESSMAN LOUIS Ronan has sold the testing laboratories of his Tipperary-based biotechnology company Enfer, which develops testing kits for BSE and also sponsors the county's hurling team, in a multi-million-euro deal.
Eclipse, part of the London-based Inspicio, the laboratories division of private equity firm, 3i, has bought Enfer's BSE and food testing labs in Clonmel, Co Tipperary, and Newbridge, Co Kildare.
The two labs employ more than 40 staff. Enfer is retaining its two other divisions - manufacturing, and research and development.
The sale has been prompted by an expected decline in the level of BSE testing from the start of next year when the age of mandatory testing for the disease in cattle increases to over 48 months of age from the current 30 months.
Eclipse already tests for BSE at its laboratory in Cork, Advanced Micro Services, and will be acquiring Enfer's testing contracts as part of the deal.
Barry Coleman, managing director of Eclipse Ireland, said that consolidation had been expected in the sector due to the change in the testing age of cattle.
"The deal makes us one of the leading players in microbiology in Ireland," he said.
Enfer earns about €20 for each test it carries out. It is the biggest player in the business and would have had the largest share of the 847,000 tests carried out for the Department of Agriculture and Food last year.
This means the business would have been the biggest beneficiary of the €17 million that the State paid for BSE testing in 2007. The work is shared between three labs in the Republic. Enfer said it would continue to operate its veterinary RD, and diagnostic kit manufacturing business in Naas, Co Kildare. "The sale of the Irish service division of the business now enables Enfer to focus on delivering new veterinary technologies to serve its customers in the EU and USA," the company said.
Enfer has been a highly lucrative venture for its shareholders, Mr Ronan and vet Michael O'Connor. Mr Ronan has drawn dividends of almost €50 million from Enfer in the five years to the end of 2006 through his 85 per cent shareholding in the company.
In 2003 the firm paid him dividends of €14.5 million after it made a profit of €17.25 million on sales of €29.7 million, which represents a margin of 58 per cent.
However, Enfer's profits have been falling in recent years. Pretax profits fell 18 per cent to €2.6 million in 2006, the last year for which accounts are available, as the company's revenue dropped 17 per cent to €13.2 million.
Mr Coleman declined to comment on the price paid.
