The technology giant IBM said yesterday it had agreed to buy the Dublin-based firm Equitant in a deal worth up to €30 million.
Equitant, which was founded in 1987 by Mr Ivor Deane and Mr Paul French, develops payment management systems for other companies. This typically includes order capture, credit management, billing collections, dispute resolution and analysis.
Equitant currently manages $44 billion worth of revenues for clients such as Cisco, Lucent, Microsoft and Hewlett-Packard.
IBM did not release the terms of the acquisition but, with Equitant generating revenues worth €10.5 million in the 12 months to the end of November 2004, it is likely that the price paid for Equitant was up to €30 million.
The main beneficiaries from the deal will be Mr French and Mr Deane, who both owned at least 5 per cent of the company in November 2003. Staff who subscribed to the employee share ownership scheme should also benefit from a windfall payment.
But the majority shareholder, US venture capital company Accretive Technology Partners which invested $10 million in 2001, will receive the biggest payout.
IBM said yesterday it would combine Equitant's client list, staff and technologies with its own fast-growing business outsourcing division. This division now employs about 3,500 people, following IBM's acquisition of PricewaterhouseCoopers' consulting division, said Mr Donniel Schulman, the IBM vice president responsible for finance and administration outsourcing.
Over the past three years, IBM has transformed its business from being a hardware supplier to supplying services and consulting expertise to clients.
The Competition Authority blocked a previous IBM bid for the Irish-based disaster recovery firm Schlumberger last year. But Mr Schulman said he did not envisage any difficulties with the current deal, bearing in mind that IBM had a 3 per cent market share of the outsourcing market and Equitant had about 1 per cent.
Equitant employs 200 staff in the Republic, Britain and the US.
