Current Account noticed the suggestion by Pricoa Capital's Mark Brunault that now is the opportune time for small cap companies that are ignored by the market to go private.
That's probably not a bad idea, but how many Irish small caps are worth taking private and how many would be able to attract the venture capital needed for the management to make a buyout move.
Sadly there aren't that many small cap companies that would be able to make a case to your average venture capitalist. Too many Irish small plcs are not up to scratch when it comes to management and there's no obvious reason why the management should perform better if the company is taken private.
There are the exceptions and there are a good number of small to medium caps whose management must find it dispiriting to have their efforts rewarded with low single-figure earnings multiples.
No wonder the likes of Joe Moran is buying lots of IWP shares when he is getting them on a multiple of five times earnings. At some stage, Joe Moran, along with his fellow-directors, will take IWP private or, alternatively, fund a trade buyer who will pay a good bit more than five and a bit times earnings for a solid if uninspiring company.
