BUSINESS SUPPORT firm Siteserv has been sold to businessman Denis O’Brien for €45.42 million in cash. Shareholders in Siteserv are set to make a premium on the deal, but lender Irish Bank Resolution Corporation (IBRC) will take a hefty writedown on the debt it is owed.
As part of the deal, IBRC (formerly Anglo Irish Bank) has agreed to take a haircut of more than 70 per cent on the € 150 million in outstanding debt it is owed by Siteserv, which is listed on the secondary markets of Dublin and London and employs some 2,300.
Without this agreement, “the proposed disposal would not be capable of implementation and it is likely that shareholders would not have realised any return on their investment”, said Siteserv.
While IBRC declined to comment on the transaction, it is understood that a sale was seen as the best alternative to the bank versus other options for getting some return back on its loan.
Shareholders, including chief executive Brian Harvey, Chris Neate and John Neal, will receive €4.96 million, or €3.92 per share. This represents a premium of 96 per cent on Thursday’s share price, or a premium of 26.9 per cent based on the average price of Siteserv over 12 months.
The company was purchased through an Isle of Man-based firm, Millington Ltd, which was established in December 2011 and is controlled by Mr O’Brien. A spokesman for Mr O’Brien said he was the only investor.
Mr Harvey said the deal would provide “security and strength” to Siteserv’s balance sheet.
“We are delighted with the partnership we have built with our new partner . . . this will enable us to consolidate and strengthen the ambitions of Siteserv in Ireland, the United Kingdom and internationally, both through organic growth and acquisitions,” he said.
Speaking of his investment, Mr O’Brien, chairman of mobile operator Digicel Group, said that Siteserv has the potential “to grow and develop geographically in many countries”.
He added: “Our investment demonstrates our commitment to growing the business into the future, supporting its existing customer base, employees and expanding further in its core markets. We believe the team has a great opportunity to capture growth opportunities in the future,” he said.
In January, Siteserv announced that it had engaged in talks with IBRC with regards to its debt burden, which it deemed to be unsustainable. Its senior debt facilities were due to expire on December 31st, 2012.
Shareholders must now vote on the deal and it is subject to approval from Irish competition regulators.
Mr Harvey and finance director Niall Devereux will continue in employment once the business transfers to Mr O’Brien.
Siteserv was established in 2004 by Mr Harvey with the support of Niall McFadden, of Boundary Capital, and private investors.
