Friday 31 October 2014

Ganley's Rivada worth $500m as IPO is considered

Communications firm raised $80m from backers

Published 08/06/2014 | 02:30

RIVADA: Declan Ganley. Photo: Frank McGrath

Declan Ganley's Rivada Networks was valued at over $500m (€367m) by US financiers as it prepared to raise $7m from investors to fund the development of its innovative spectrum trading technology.

The company, which was set up by Mr Ganley in the wake of the 9/11 terror attacks, has raised close to $80m from investors since 2005 but has remained below the radar screens in Ireland. The company had earlier attracted a valuation of around $330m during another funding round.

Mr Ganley is a major shareholder in Rivada, with about half of the company. Low profile US and European institutional shareholders own the rest of the equity in the business.

He has ruled out the sale of Rivada – the business hasn't even scratched its potential yet. It is understood that a number of companies have considered buying the firm. Mr Ganley invested "several million" in setting up and funding Rivada through its start-up phase. That stake may now be worth well over $250m based on the recent US valuations.

Mr Ganley has also considered floating the company to help fund its ambitious growth plans. "You don't rule anything out. We're driven by the mission of getting it done. We'll use whatever tools we need to access markets or whatever. We've had people knocking on our door, doing the dance of the seven veils," he told the Sunday Independent.

Technology firms are attracting extremely high valuation as Wall Street investors seek a home for money. Taxi rental firm Uber is the latest to attract a massive number, with a $17bn valuation. Mr Ganley believes that his Rivada group has far more potential. "Is this bigger than dynamic taxi pricing like Uber? I think it is a bigger deal. I think bandwidth is in more demand than taxis."

While it cut its teeth proving secure communications networks for the emergency services in the wake of Hurricane Katrina and Hurricane Rita, which hit New Orleans in 2005, Rivada has developed some cutting-edge technology which will enable owners of spectrum or bandwidth to sell excess capacity on a prioritised basis. "Rivada is the answer to how do you commoditise the world's latest great natural resource shortage," he says. This includes the huge and underutilised US public emergency networks as well as huge networks owned by telecoms and TV groups.

Mr Ganley's firm is seeking to roll out a huge communications network across the US, which may cost as much as $500m per state to build, with finance coming from hedge funds or other money managers. This will enable the owners of the network to rent out excess capacity to commercial users. US legislators have cleared the way for the trading of public service radio spectrum, enabling Rivada to cash in using its new technology.

The businessman initially made his fortune in Latvia and western Russia through the export of timber and the privatisation of 28 sawmills and forestry assets in the late 1990s. These assets were sold to a group led by George Soros in 1997.

Mr Ganley later built up a pan-European fixed wireless group called Broadnet. He sold his 40 per cent stake to US telecoms giant Comcast in 2000. He has also been involved in a cable television business in Bulgaria, bidding for an Iraqi mobile phone licence and a scheme to privatise assets in Albania.

Sunday Indo Business

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