Netwatch eyes €250m flotation
Netwatch is in preliminary talks with the Irish Stock Exchange about the prospect of an IPO that could value the Carlow company at as much as €250m, according to chief executive David Walsh.
The security monitoring company is expanding apace and in recent years it has opened up offices in Boston, New York and Philadelphia.
The company says it is on track to reach revenues of €100m per annum by 2020, with earnings before interest, tax, depreciation and amortisation also rising sharply.
"Analysts are telling us that the valuation of our business is eight to 10 times EBITDA and I am in no doubt that we can drive that from its current level to €30m over the next five years", Mr Walsh said.
"We have the technology, the people, the market and the route to market to reach our revenue targets by 2020 and one of the pillars we need to put in place to make that happen is strategic funding.
"There are a couple of options and because of our business model we're being advised that an IPO would likely be the best option", he said, although no decision has yet been made.
Other options are also being considered by the company, including senior debt and venture capital money. Mr Walsh said that for them to consider that option, any investor would have to show that they could "add value in the marketplace as well as the money" and that they have had numerous such approaches from investors in recent years.
Netwatch currently employs 160 people between its head office in Carlow and its offices in the US and Newry in Northern Ireland.
The majority of the company's projected growth will come from supplying monitored security services to key US sectors, as well as continued investment in R&D at home.
"The US is a very big market and it would be easy for a company to get lost, so we have set out three verticals that we want to focus on and they are the oil and gas industry, the automobile industry and support services into the construction industry, including quarries and aggregates. We are making extraordinary inroads to those industries and most of our future growth will undoubtedly come from the US," Mr Walsh said.
While the majority of the expansion will come through its American offices, all of the monitoring for these contracts will be done from its state-of-the-art Carlow monitoring centre.
"It's like the old manufacturing model. We're winning contracts in the US and the actual product that we supply, which is the monitoring, is created in Ireland. It's better in a way, because unlike manufacturing, you don't have to import any of the inputs, such as steel or coal; the people and the software are all coming from Ireland", he said.
If the company does choose to float on the Irish Stock Exchange, it would be good news for both CEO David Walsh and chief technology officer Niall Kelly, who founded the business together in 2000 and are believed to still own all of the shares in the company.
Sunday Indo Business