Fast-growing hi-tech firms prove Ireland is punching above weight
IRELAND is punching above its weight when it comes to hi-tech start-ups with 80 of the fastest growing companies in Europe located here, according to the managing director of Fidelity Growth Partners Europe.
The Fidelity boss was among the speakers at Raglan Capital's Business Breakfast M&A Seminar in Dublin yesterday.
About 280 entrepreneurs, investment bankers and venture capitalists packed into the Burlington Hotel for the event, which focuses on takeover strategies and stock market floatation deals for Irish technology companies. It was held to highlight the number of international investors that are increasingly keen to buy Irish technology firms.
To the delight of visiting investors, a show of hands proved that about one-in-three people attending the event was a company founder or CEO.
The event was organised by Raglan Capital, an Irish merchant bank, and law firm Matheson Ormsby Prentice.
"We think Ireland is a great place to build companies," said London-based Simon Clarke, managing director of Fidelity, which invests in high-potential technology businesses.
Irish companies "aspire to greatness", he said. It was a key attraction when it came to identifying potential investment candidates, he added.
Fidelity is an investor in three growth businesses in Ireland.
The number of fast-growing technology businesses in Ireland was out of proportion with the size of the economy, he said.
Mr Clarke said Ireland's skilled workforce and global orientation were among the draws for investment firms, including his own.
Investment banker Cathal Friel, who organised the conference, said the sovereign debt crisis was having no effect on prospects for the sector.
Mr Friel told entrepreneurs that cash-rich global businesses were looking to buy hi-tech and medical device start-ups because they had cut back on research and development in recent years.
He said the trend created a unique opportunity for entrepreneurs considering selling businesses that had reached the limit of their organic growth.
Global technology and pharmaceutical companies were sitting on $3bn (€2.14bn) in cash, Mr Friel said.
He said such companies were in the market to bolt on smaller acquisitions, but only if they offered proven technology.
Brian Long, a Dublin-based serial entrepreneur who founded Parthus Technologies in 1993, said the environment for the Irish technology sector was the best since the late-1990s.
There was $110bn worth of merger and acquisition (M&A) deals in the technology sector last year and $35bn worth of deals have been announced so far this year, he said.
Mr Long runs Atlantic Bridge Ventures, a venture capital fund active in the US and Ireland.
"When we founded Parthus, unemployment was 16pc and there was very little finance around, but that situation turned around rapidly," he said.
Parthus was floated on the Nasdaq stock exchange and was valued at $2bn before merging with a US rival to form Ceva.
Mr Long said stock market flotations were becoming a viable financing option for smaller companies for the first time in 10 years. Listings would allow Irish technology companies to become acquirers rather than just waiting to be bought by bigger rivals, he added.
Dublin-based Raglan acts as an adviser to business owners who are selling companies.