ION EQUITY has been busy of late putting the capital it earned from the €550 million sale of SWS’s wind business to Bord Gáis last December to use in other businesses.
The Dublin investment group used €35 million to pay down debt at Oak Acquisitions Ltd, a holding company for a number of investments. This has reduced its debt to below €20 million.
It has also put €10 million into the business to fund working capital and growth opportunities, with a particular focus on its business process outsourcing arm, called South Western. “We think it’s a business worth backing,” Ion partner Ulric Kenny told me this week.
“It’s far less commoditised than a telesales operation.”
Clients include Bank of Ireland, Irish Distillers, Heineken and petrol retailer Topaz, another Ion-controlled business.
“It’s doubled in size since we took it over [in 2006] and there’s every potential for it to double in size again over the next three to four years.”
South Western’s turnover is currently running at €25 million, Kenny said. He declined to reveal a profit figure, but it’s a “high-margin” business and the bottom line has doubled since 2006. Back then, South Western was part of a diversified SWS group, which Ion broke into different parts after its takeover.
South Western employs 450 people in Clonakilty in Cork and another 100 or so in the Polish city of Lodz.
The Polish business has now moved to the stage of pitching for local contracts.
“We’re now selling in this market and have just signed up a very large customer in Poland.”
Kenny also breezed through some of Ion’s other investments. A 70-acre property in Little Island, Cork – which is part of Oak – awaits an upturn in the economy.
“At some point in time people will want to build there again,” he said ruefully.
Its forestry business is “quite profitable” while Topaz is “trading very well” and student travel group Usit is “still flying”.
“We’re looking for more assets, either in Ireland or the UK,” he said. “Ireland will be all about turnarounds . . . we want to be part of the solution.”
