Telecoms company Esat has bought a majority interest in Labyrinth, an Internet design and consultancy firm. Esat said yesterday it would pay £3.75 million (€4.76 million) for a 51 per cent share in the Dublin firm, including an earn-out over a two-year period. The deal values Labyrinth at £7.35 million, and leaves its three founders and owner considerably wealthier.
Esat said the investment represented "the missing piece in the jigsaw" in making its Esat Net subsidiary a one-stop-shop for electronic business, and provided the firm with new opportunities.
"We view our investment in Labyrinth as completing the overall positioning of our Internet and e-commerce solutions," said Esat Net's managing director, Mr Richard Cooke. "Esat is now the only operator that can provide business customers in Ireland with multi-service, data and Internet products as well as web development and e-commerce security. This is a strategic investment for both companies and will give Labyrinth direct access to Esat's customer base".
Labyrinth's managing director, Mr Eddie Murphy, said the investment would allow the firm to continue the growth achieved for the past three years.
Mr Murphy, along with Mr Michael Mulhall and Mr Edward O'Neill, founded the firm in 1996. A spokeswoman for the company said last night the three would share the £3.75 million, but could not say precisely how the cash would be apportioned.
Labyrinth, which specialises in providing Internet and electronic commerce services to the corporate market, has seen rapid growth and currently has contracts being serviced in France, Britain and the US. It employs 33 people.
"We will be in a position to invest additional resources in our R&D team, and to fund the recruitment programme that we are about to roll out," Mr Murphy said. "To be able to do this while maintaining seamless continuity in the day-to-day management of the company was a top priority for us when we set out to seek a strategic partner".
The company said yesterday it would open offices in San Francisco by the end of this year, and was looking for a new headquarters in Dublin to facilitate the extension of its business. Among its clients, the firm counts Micro soft, Gateway, CRH, Elan, Bord Failte, Allied Irish Banks and Bailey's.
