Lake Communications, the Irish telecommunications and datacommunications company, has announced the £5.6 million acquisition of Irish company Topology Systems.

The move will strengthen Lake's market value as it plans to pursue a stock market flotation on the London and possibly Dublin exchanges late next year.

Lake will merge Topology with its own networking business, Lake Communications Systems, to establish a strong presence as one of Ireland's leading network systems providers for business.

Operating under the Lake Communications name and employing 50 people, the merged networking business hopes to generate sales worth £10 million next year.

The arrangement for the acquisition is based on an initial cash payment and additional payments over three years subject to specific targets being met.

Mr Tadhg Foley, currently managing director of Topology will become general manager of Lake Communications Systems and take up a position on the board of Lake. Following the acquisition, the Lake group predicts sales in the region of £34 million next year following a turnover of £24 million last year. Lake Communications has been headed up by Mr Anthony Bermingham and co-directors Mr Caoimhin O'Laoi, Mr Martin Walsh and Mr Mick O'Dwyer since the company was bought back from the Swiss Landys & Gyr Group in 1993.

The Lake Communications Systems arm of the company was established following Lake's acquisition of ailing modem and data equipment company, Cornel, for £1 million in 1996.

Topology was formed in 1995 as a result of a management buyout of Motorola's data communications division in Ireland. It has experienced significant growth in the past three years with revenue nearly tripling over that period. Topology will now combine its presence in the financial services arena with Lake's strength in the food and distribution sectors.