TVC waits on banks before investing in more firms
PRIVATE equity firm TVC wants to buy more firms in Ireland when valuations become more realistic, the company said yesterday.
Founder and chairman Shane Reihill said his firm had the means to do more deals than it has done in recent months but was holding off until sellers, especially the banks, cut their prices. "We have looked at a number of deals but until prices come down to a realistic valuation we are not going to enter the market, and we are not the only ones taking that view," he said.
"The banks for instance tend to want to sell a business at around eight to 12 times cashflow but they will only lend at around two to three times, so you can see the discrepancy there for yourself.
"This isn't limited to Ireland, it is a similar situation in the UK and elsewhere. Until the banks stop this 'extend and pretend' business and take realistic action it will continue," he added.
Mr Reihill was speaking as his company reported strong annual results that showed an increase in the value of its portfolio by nearly a quarter on last year and a gross return of €10.7m.
Growth was driven by a mark-up on its stake in UTV, which increased by €5.1m during the year. TVC is the media group's single biggest shareholder with an 18pc share. Mr Reihill, who quit the UTV board in February amid acrimonious circumstances that saw two other directors also walk out, refused to comment on the UTV bust up, citing "competitive sensitivities". He confirmed, however, that he will not attend that company's annual general meeting in person tomorrow.
TVC owns three private technology companies which Mr Reihill said were "for sale" although the company is apparently not actively shopping the businesses at the moment. The firm also owns the Maldron Hotel group.
"We're happy with how they are doing, but we are not interested in early stage investment at this point," Mr Reihill added.
Overall, the company posted pre-tax profits of €9.2m.
NCB Stockbrokers were pleased with the results.
"Management believes there are restructuring opportunities in Ireland and the UK where trading companies with excessive debt need to raise new equity at attractive terms for new investors," NCB said.
"The stock last traded at 83 cent, about a 27pc discount to the reported net asset value per share.
"With cash equivalent to some 87pc of market capitalisation, the downside is limited."
Mr Reihill added he was in favour of a Yes vote in the upcoming referendum, citing the possible reputational damage that would follow as an Irish company trying to do business abroad or attract investment here.
TVC shares closed the day up 2pc at 85c.