Packaging magnate Dr Michael Smurfit and a group of affiliate investors have taken an 18 per cent stake in privately-held telecoms firm Perlico, in a deal that values the business at some €55 million.
Dr Smurfit and his co-investors provided more than €10 million in capital to Perlico, with the balance of a €20 million fundraising in the fast-growing firm coming from its original backers.
These include Ged Pierse of construction group Pierse Construction, entrepreneur Dr Jim Mountjoy and former IAWS finance director David Martin.
"We've raised in the region of €20 million. We've secured that from our existing investors and a new strategic investor, which is the Smurfit family," said Perlico chief executive Iain MacDonald.
"The business is valued at €55 million. It would have been €20 million approximately 12 months ago. Our original shareholders would have seen 600 per cent growth over a period of about 30 months."
Dr Smurfit's investment in Perlico comes as the firm makes plans to list on the Alternative Investment Market (AIM) in London late next year. As an alternative to that, it may decide to float the business on the primary markets in Dublin or London at a later date.
Perlico's original backers include Mr MacDonald's father Malcolm, a retired corporate financier. He chairs the company's board.
The company's latest fundraising round was completed in recent weeks as Perlico brought the subscriber base for its broadband and fixed-line services to 75,000 from 10,000 at the start of the year. It has acquired 10,000 customers in the two months since Smart Telecom withdrew from the consumer market.
Perlico will use the new money to widen its broadband offering, with services such as internet television and video-on-demand. The firm is also plotting a move into the mobile phone market next year, by way of a mobile virtual network operator contract with an established mobile player.
While Mr MacDonald declined to name the mobile groups with whom it is in talks, O2 is known to have made an unsuccessful takeover approach earlier this year.
Perlico expects to start next year with revenues running at an annualised rate of €50 million. However, the firm anticipates that its high customer acquisition rate will bring its revenues to €80 million for 2007.
Mr MacDonald said the business would be profitable on the bottom line in that period but declined to quantify the likely profit.
Perlico relies heavily on a direct marketing business model with which it uses a unique phone number or internet code for each promotional or advertising campaign. "We're developing a very strong, profitable, growth-orientated business that's a very well-run company. We have consistently delivered against what would have been perceived as very ambitious targets," said Mr MacDonald.
