Staff at stockbrokers Davy are poised to share a €40m windfall as it repays loans linked to its 2006 management-led buyout, according to people with knowledge of the matter.
The repayment is 1.8 times what employees lent the company to help finance its leveraged buyout from Bank of Ireland, including interest at a hefty at 6pc a year, said the people, who declined to be identified because the matter is private. The business was valued at €350m in the buyout.
As well as paying off the loan Davy is also offering to buy back staff equity holdings at eight times their 2006 value, as the firm paid down debt and its enterprise value rose to between €400m and €500m, said one of the people.
Take up of the offer to cash out may be limited, however, if staff opt to leave their money in the business.
The number of employees who hold shares in the firm has increased almost 50pc to 150 since the buyout, while total jobs at Davy have risen to over 600 from 450. Davy had net assets of 170 million euros at the end of last year, according to a summary financial statement on its web site.
"The firm is performing strongly, has a very robust balance sheet and continues to invest in servicing our clients," a spokesman for Davy.
Established in 1926, Davy accounted for 43pc of all Irish equities dealings last year and advises almost two-thirds of companies Irish listed companies. (Bloomberg)