Monday 22 January 2018

Avoca bosses net over €74m after KKR buyout

That's a stonking €74m in shares between the three financiers
That's a stonking €74m in shares between the three financiers

Former AIB bankers Donal Daly and Alan Burke are rolling in it following the sale of their low-profile specialist credit outfit Avoca Capital to private equity giant KKR, which closed a year ago last Thursday.

Daly and Burke had set up the St Stephen's Green based company in 2002 and by the time of its sale the credit investment manager was sitting on $8.4bn in assets. It had made shedloads of money for its backers, with the first Avoca offering generating 17pc annually for its three-year lifespan. Kerchiiing!

For such a major deal, trumpets weren't blown particularly loud and a purchase price never emerged. However, now I've been able to find out exactly how much they received. New filings in the US show that Daly picked up 1.728 million shares worth a cool €36.5m. Co-founder Alan Burke bagged almost 1.144 million shares worth €24.2m, while executive Deborah Mintern had over 630,000 shares worth about €13.3m at current levels.

That's a stonking €74m in shares between the three financiers.

When the deal closed last year, the three were given permission to each sell their entire stake. They would've been wise to hold on, as KKR shares have risen and their combined holding is now worth an extra €800,000.

Other 1.4 million shares were received by "selling security holders", presumably the other 67 Avoca staff or shareholders, which would be worth a another €29.6m at current prices. This makes the KKR spend on Avoca up to €103.6m, making it one of the largest buyouts of a specialist finance company in Ireland - ever.

Rathgar man Burke is clearly a rising star within the KKR stable and has been appointed to head up its European credit platform, as the vast private equity firm moves to fill the hole left by non-lending banks. Castleknock's Daly, now based in Knightsbridge, is a senior adviser to KKR and also sits on the board of Alpha Capital.

Collateralised loan obligations are like sausages - you don't really want to know what's inside them. But the people who create and sell them can make an absolute fortune. There's still massive amounts of cash to be made in banking.

Google's John Herlihy has just 15 shares in the online behemoth as he exits centre stage

After ten years in the job and nearly 5,000 jobs created, Google Ireland boss John Herlihy is leaving the digital giant at the end of March.

He'll be replaced by Google's other Irish veepee, the seriously smart Ronan Harris, who heads its large customer sales division. Herlihy is taking time out to consider his next step.

Rather surprisingly, working for Google doesn't give the top bods hundreds of millions of dollars worth of valuable shares. At the end of 2013, the Limerick man had just 15 Google shares, worth just over €7,100. He also had 1,823 restricted stock units, which gradually vest over a fixed period. Assuming these all kick in, they are worth around €867,000.

He also has 1,122 stock options worth €533,000 but he'll have to pay to exercise those. Herlihy's stake in Google has been sold down. He had 31 shares in 2012, 3,036 restricted stock units and 2,751 options. He had 12,000 stock options in 2007, when Google was trading at $300 per share.

Time for Herlihy to fill his boots elsewhere.


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