Shareholders back MBO at SMF Technologies

Shareholders at Limerick electronics firm SMF Technologies yesterday backed a management buyout (MBO) at the company.

In the absence of other offers, the shareholders backed a deal that will see managing director Mr John McDonnell and consultant Mr Gary Carroll pay €50,000 for the trading subsidiaries of the the troubled firm, which manufactures specialist electronic measuring equipment.

The pair will also pay back a debt of €186,000 owed by the company to one of its shareholders Mr Martin O'Donoghue.

Two other approaches had been made to the company following the announcement by its board of its intention to recommend the MBO. However, the company said neither had been "progressed by the other parties".

One of those offers, from rival precision electronics firm Connor-Winfield, a US group with an operation in Shannon, would have seen shareholders get €200,000 for the trading subsidiaries.

However, the offer was withdrawn after the company said it would have insufficient time to carry out due diligence.

As the MBO offer was unconditional, it is understood SMF was keen that any rival offers put to the extraordinary general meeting held yesterday in Limerick were similarly binding.

Mr McDonnell welcomed the extraordinary general meeting vote. "I'm very happy with the way it has turned out. We were thrilled with the overwhelming support of the shareholders for the proposal. It gives us the freedom to go away and work on the company, with a focus on developing our position and technologies."

The crisis at SMF Technologies was triggered by its failure to raise funds for a vital acquisition last March. That triggered a decision by Mr O'Donoghue to withdraw the funding he had offered which was underpinning the company. That led to its emergency delisting from the Irish Stock Exchange.

"It has been really difficult for us as a very small listed company to find the necessary support," said Mr McDonnell.

"We spent nearly a year looking to raise the money we needed and it was a huge loss in terms of time for the company."