Thursday 27 July 2017

Kehoe offloads IT company to rival for €100m technology

Donal O'Donovan

Donal O'Donovan

IRISH entrepreneur Liam Kehoe will celebrate his 70th birthday in style later this year after a UK rival paid €100m for the technology company he set up in 1974.

Yesterday, UK-listed data centre operator Telecity confirmed that it had paid £87m to buy Data Electronics.

The takeover does not require regulatory approval and the two companies are being merged with immediate effect.

Data Electronics owns and manages two hi-tech data centres in Dublin -- built at a combined cost of €40m. Telecity operates a third centre, also in Dublin.

Data Electronics ceo Maurice Mortell is to take over as managing director of the newly combined Telecity Ireland.

Last night executives at Telecity said they had been in the hunt for takeover deals in Ireland for some time and had been able to close the deal after arranging a £300m debt facility earlier this year.

In February, Data Electronics hired US investment bank Jeffries & Co, Irish law firm Matheson Ormsby Prentice and KPMG to advise them on a possible sale of the business.

Managing director Mark Mortell said the decision to sell the business was taken because the company needed a bigger owner to finance planned further expansion.

The sale marks a successful exit from the business for Mr Kehoe, who was managing director for 25 years until he became executive chairman in 2000.

He retired in 2008 but has stayed on as a non-executive director since then.

Outgoing company chairman Brian Kelly became a director of the company in 2001, when he was part of a group of investors that the Kehoe family brought to fund an earlier round of expansion.

Managers including Maurice Mortell will also share in the €100m pay day after the sale of the business.

The shareholders' breakdown prior to the sale is understood to mean that around one-third of the company was owned by the company founders, one- third by the later stage investors and the balance owned by management.

Data Electronics has moved with the times since former Aer Lingus technician Mr Kehoe set up the company.

Today its value is down to the successful ramp up of "cloud computing" capacity at its large-scale data centres.

These centres offer IT capacity to third-party clients including bookmakers William Hill and Jurys Inns.

Buyer Telecity is valued at £1.11bn and turnover last year was just under £200m.

Including the two new sites in Ireland, it operates 26 data centres across Europe and is currently building three more. Its clients include social-networking giant Facebook.

Telecity, a major European provider of carrier-neutral data centres, has acquired Data Electronics Group founded by Liam Kehoe (above). Announcing the deal (left) were Adrian Oosthoek, MD, UK & Ireland, Telecity, with Maurice Mortell, CEO Data Electronics.

Colm Mahady Fennells

Irish Independent

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