Small investors in a Dublin software firm, Eontec, made a 1,000 per cent profit when their stake was sold to Warburg Pincus, the US venture capital group.
About 180 individuals shared €2.16 million (£1.7 million) for their 7 per cent share of Eontec which was acquired last month by Warburg Pincus. The investors are members of an ICC Bank business expansion scheme (BES) which put €219,665 into the company in 1997.
The acquisition values Eontec at about €307 million. The company employs about 300 people in Dublin, the US, Canada, Germany, Britain and India. Its chief executive Mr Jim Callan is believed to be a significant, shareholder in the company.
The 10-fold return on the BES investment represents a handsome profit for the investors, whose average stake in the scheme was worth less than £10,000.
ICC Bank's managing director of BES schemes, Mr Tom Quirke, said the programme put €1.4 million into five companies in 1997.
The Eontec investment was by far the most successful and others yielded no return.
A €254,000 investment in Oniva realised €660,264, a return in excess of 250 per cent. The acquisition of those shares by a group of German and Dutch investors took place before Oniva closed last April.
Mr Quirke would not name the other companies involved, but he said one was sold without consideration and two others required further investment to support their operations. Because the BES investment was deemed to be in a risky sector, it was smaller than others operated by ICC Bank, which was acquired last year by Bank of Scotland. Other schemes were worth more than €8.89 million, Mr Quirke said.
Declining to reveal who the beneficiaries of the scheme were, he said: "A lot of them would have been people who invested in previous BES funds." The individuals involved had invested up to €31,700 in the programme, though some had invested only small fractions of that figure.
Warburg Pincus is a member of the Valentia consortium, which acquired Eircom last year. An Eontec spokeswoman would not reveal the scale of the US group's entire holding in the company.
It led a $25 million funding round in advance of its purchase of the shares held by the ICC scheme. Private clients of Davy Stockbrokers, ICC Venture Capital, and the businessman Mr Denis O'Brien also backed that funding round.
