An Internet design and development company based in Dublin, and founded a year ago by a group of Irish twentysomethings, has been bought by US Nasdaq quoted company, Breakaway Solutions, for $18 million (€19.18 million) in a cash and stock deal.
The acquisition of the entirely self-financed start-up will make paper millionaires of Zartis's five founding shareholders: chief executive officer, Mr John Dennehy (28), sales and marketing director, Ms Dervla Cunningham (29), chief technical officer, Mr Keith Davey (27), creative director, Mr Martin Casey (27), and data architect, Mr Ultan Leahy (27). The five founding directors hold most Zartis stock, while some other employee shareholders share a small collective stake, and all Zartis's 40 employees will benefit from the deal through an 11.5 per cent share option pool. Mr Dennehy says all Zartis employees will receive an immediate cash bonus directly proportionate to time served and business contribution.
Mr Dennehy would not outline the precise details of the deal, but said it was primarily stock based, with less than one-third represented by cash. The stock deal is vested over four years to retain Zartis's employees, who will now operate as part of Breakaway Solutions' new Dublin based European solutions centre. The Zartis management team will continue to lead the new organisation.
Breakaway Solutions, which expects to become profitable in the final quarter this year, plans to immediately begin expanding its Irish software development centre to 70 employees by the end of this year. Mr Bill Loftus, senior vice president of operations at Breakaway Solutions, expects Breakaway Solutions Ireland to employ around 300 people within the next three years. Breakaway Solutions recorded revenues of $24 million in its last quarter.
"Despite a number of previous acquisition attempts, this was not a route we had contemplated as we planned to grow the company organically. But we met Breakaway in the middle of a funding round and their vision seemed to completely validate our own. They have the expertise as a full service provider to allow us maintain and host applications for our clients. That speeds up the Zartis business plan by about two years," says Mr Dennehy.
Mr Dennehy was one of the first senior managers of e-commerce applications company, ebeon. He left the company last year to found Zartis to build complex e-commerce applications for large third party clients.
Earlier this year it was awarded the contract to design, build and implement WorldofFruit.com's e-commerce project. Since its inception Zartis has attracted key personnel from big industry players, including Netscape, Oracle and IBM.
