IRISH TECHNOLOGY firm AEP Networks has been acquired by UK-listed Ultra Electronics in a deal that could be worth up to $80 million (€59 million) to AEP’s shareholders.

AEP’s shareholders were primarily institutional investors including US venture firm Masthead Venture Partners, Investor AB from Sweden and Irish firms Mentor Capital and Atlantic Bridge Ventures. ACT Venture Capital was AEP’s first backer and largest shareholder with a 23 per cent stake.

AEP, founded in Dublin based on technology developed at DCU, specialised in providing technology to secure online communications. It expanded rapidly through acquisitions, including the purchase of the security technology assets of Baltimore Technologies.

AEP merged with US firm Netilla Networks in 2004 and the following year acquired V-One Corporaton, a technology supplier to the US government.

The deal involves an initial cash consideration of $57.5 million, a cash payment of $5 million after 45 days, and a payment of up to $17.5 million at the end of this year depending on AEP’s financial performance.

AEP has 5,000 customers in 60 countries and had recently launched a security service delivered over the internet.

John Flynn, managing director of ACT Venture Capital and a board member at AEP, said AEP had revenues of $25 million last year and had turned profitable.

The sale of AEP is the third significant trade sale from ACT’s portfolio of investments this year. In February, Dublin-based food technology firm Odenberg was sold in a deal worth €57.5 million. In July Acra Control, an aerospace company founded by four DCU graduates, was sold for €42 million.