SMART TELECOM, which has been in examinership since August, is to be acquired by rival Digiweb subject the approval of its creditors and the High Court.
The investment by Dundalk-based Digiweb was announced yesterday and will result in the creation of a company with annual revenues of €40 million and more than 150 staff.
The combined entity will have a subscriber base of 46,500 business, residential, corporate and Government customers.
The Smart brand name will be retained but the company will become part of the Digiweb group.
The financial details of the transaction were not revealed although Smart’s backers and creditors are expected to take a significant financial hit.
Smart sought the protection of the High Court on August 31st, with accountant John McStay appointed as examiner. The court was told Smart Yuroe Broadband (SYB) had liabilities of €101 million.
Smart has 12,000 residential and 500 corporate and Government customers.
SYB acquired the assets and liabilities of Smart Telecom as part of a rescue deal in 2006. Its principal backer was Cavan-based Kingspan co-founder Brendan Murtagh.
In July 2007, it secured finance from US and Irish investment groups of €49.5 million to pay certain creditors and provide working capital for the group. With interest payments included, this bill now stands at €70 million.
Management accounts for three Smart companies showed combined losses of some €74 million to the end of December 2008.
Smart was founded in 2000 by Oisín Fanning and was once listed in London. In 2006 its fixed-line services were cut off by Eircom.
Digiweb employs 100 staff in Dublin, Dundalk, Waterford and Limerick. It offers wireless and fixed broadband, telephony and web-hosting services.
Digiweb’s latest accounts show it had accumulated losses of €6.1 million at the end of 2007.
The company was founded by Colm Piercy. It is backed by Moritz Holdings, an investment and property development company headed by Longford-born Michael Whelan.
