O’Brien to buy Siteserv for €45m
The board of the company said yesterday it had reached provisional agreement, pending shareholder approval, to sell to Millington, an acquisition vehicle headed up by the telecoms entrepreneur.
Mr O’Brien’s name cropped up last weekend as a potential suitor for Siteserv. Earlier this week, the group’s management confirmed it was in advanced discussions over its ownership, without naming the interested party.
While Siteserv has been growing revenue, operating profits and new business levels in the past year, its mounting debt levels have hampered progress; with analysts saying the board had little option but to identify new investors.
The company has been exploring “a number of strategic and corporate options” with its main lender, the Irish Bank Resolution Corporation (formerly Anglo), concerning its €145m debt mountain.
Analysts last week warned that any delay in dealing with its debt levels would likely result in a full writedown of Siteserv’s equity value.
Yesterday, Siteserv’s management said that during the review it was recognised that the debt burden being carried by the company was “unsustainable” and a sale of the business “may represent the best available option in the circumstances”.
As part of the proposed sale, IBRC has agreed to accept payment of an amount which is less than the full amount owed to it by Siteserv “in full and final discharge of the indebtedness of the group”.
Brian Harvey, Siteserv’s chief executive, said the new deal can enable the business to strengthen in its core regions of Ireland and Britain and grow internationally both organically and through acquisitions.
“I believe teaming up with a new partner will provide security and strength to our balance sheet and, in turn, provide confidence to customers and employees alike,” he added.
Siteserv employs more than 2,300 and Denis O’Brien said he sees the company having potential to grow and develop “in many countries”.
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