The Sunday Business Post, Sunday 2 May 2004
Technology firm Kedington plans expansion after MBO
By Gavin Daly
A
technology solutions company bought by Denis O’Brien’s
Esat for € 19 million in 1999, now plans to expand after management
bought it back for less than € 5 million.
Kedington is investing heavily in wireless services and expects 2004 revenue to increase by 25 per cent on last year’s € 10 million.
Matt Porter, Managing Director of Kedington, said the company had signed a number of clients, including eBay and Merrill Lynch and a € 2 million deal with Cork Airport. The company has opened offices in Cork and Limerick and plans to hire at least 10 extra staff this year, boosting staff numbers to 110.
"We have always been number one in the structured cabling space, but we have made significant investments with the aim of becoming number one in the wireless space,” Porter said. The company recently hired ex-Lucent executive Willie O’Connell as Managing Director of its Solutions division.
Porter said Kedington also planned to expand into the North, where it operated before its buyout by Esat. That deal made millionaires of Porter and his four partners in Kedington, which was founded in 1989.
Last year, Kedington’s management, led by Porter and Colm Lyons, bought the firm back from Esat BT, which has disposed of non-core businesses.
Porter would not comment on the price paid in the management buyout (MBO), but it is understood to have been less that € 5 million.
He said attempts to integrate Kedington with other Esat acquisitions, including BridgeCom and Viewpoint Datacomms, “didn’t go as well as expected. It was a fantastic coup – to sell the company in the first place and then to buy it back as the same unit.”
Since the MBO, Kedington has beaten its target for turnover, profitability and costs. Revenue should double in the coming years, said Porter.
Kedington had revenue of around € 20 million when it was bought by Esat, but business dried up rapidly during the technology downturn, according to Porter.
“There was a freeze on spending at a lot of the blue chip companies around the world. Firms that had talked about expanding just shelved projects.”
However, he said companies were now upgrading their technical infrastructure, and new projects were also coming on stream.
“Companies that installed cable in the 1980’s and early 1990’s now find that their networks won’t support new applications,” he said.
“They are being forced by business demands to re-cable their buildings. It is a much better climate this year – and next year is going to be even better.”