€1.5bn worth of transactions in Ireland’s ‘knowledge economy’

17 Oct 2008

Third-quarter transaction activity in Ireland’s knowledge economy remained steady, despite the turmoil in the financial markets.

The WHO42 Equity Funding Quarterly showed that the published value of all transaction activity for the third quarter was €1.5bn, and the number of investment deals remained constant throughout the year.

The quarterly captures corporate transaction and venture capital (VC) activity in Ireland’s knowledge economy (information and communications technology, life sciences, digital media, clean and environmental technology), including investments, acquisitions, disposals, MBOs and mergers from a wide range of published and industry sources.

Future Human

Investment activity has remained constant throughout 2008, with at least 11 to 12 significant transactions per quarter. Some €55.9m was invested during Q3 across 12 transactions, mostly in later-stage companies rather than start-ups. The number of reported acquisition and disposals, MBOs and merger transactions taking place during the third quarter were lower than in the first two quarters.

“Economic slowdown will focus more attention on our indigenous knowledge economy businesses. The quarterly results show that while there is no surge in activity, investors and founders are still investing, and others are getting exits,” said Neil Pope, director, WHO42.

“Of the €55.9m invested during Q3, most was focussed on later-stage companies, rather than start-ups. However, our knowledge economy funnel is not being fed at the top and there is a requirement for next-generation companies to access funding.”

Two deals worth amounting to €56m included the purchase by Dublin-based investment group, One51, of the UK hazardous waste business, Augen, and the sale of automotives player, Iralco, to Galway manufacturer, CF Tooling.

There were 12 finance rounds amounting to €55.9m, which included Chip Sensor raising €1m, CommProve raising US$14m, Corvil raising €7.6m, DHS raising €500,000, EpiSensor raising €1m, Luzern raising €2.5m, MobileAware raising an undisclosed sum, Muzu TV raising €6m, PCH raising €21m from Silicon Valley’s top VC firms, Sim2Learn raising €4.3m, Tas Group raising €1.4m and Mail Distiller raising €634,000.

Office supplies firm, Bryan S Ryan, merged with document integration equipment specialis,t Office Evolutions Group, in a deal valued at €15m, while Park Group sold its trading business for €30m to Oxford Aviation Academy, and Elan has received first-round bids from Bain, Candover, Texas Pacific Group and Warburg Pincus for €1.3bn.

The WHO42 Equity Funding Quarterly also revealed that activity from Irish-based investors is being strongly supplemented with investment activity from a number of international players. Four Irish structured VCs have been active so far in 2008, supplemented with transaction activity from at least a further 10 international VCs.

“It is clear that turmoil in global markets has not closed off activity in the knowledge economy, with a number of venture investors remaining active with new investments deals,” said Eugene Ivory, head of research, WHO42.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years