Rival Redstone buys Xpert for €38m

DUBLIN IT systems company Xpert Technology has been snapped up by British rival Redstone for €38 million.

The Sandyford-based company, which was set up in 1994, will be taken over as part of a combined deal with its sister operation in Britain, Xpert Communications. The combined group employs 200 people, with Ireland accounting for 36 staff and approximately 25% of revenue.

The Irish operation focuses on IT hardware and systems integration, but the company's activities in Britain centre on telecoms, data and support services. The company recorded revenues of €40m last year but had been growing sales at 15% year-on-year. The Irish part of the business reported a sales hike of 30% earlier this year.

Redstone, which is quoted on the London Stock Exchange, will finance the deal through a mixture of cash, loan notes and shares in the company. The companies operate in similar markets and each has signed strategic deals with equipment heavyweights such as Cisco Systems, Avaya and BT. Both companies serve clients in the healthcare, education, financial services, retail and government sectors.

Xpert Technology managing director Basil Bailey said the deal was good news for both companies and would provide more opportunities on both sides of the Irish Sea. Xpert would benefit from being part of a plc and the Irish business would have "all sort of possibilities" from teaming up with Redstone, he said.

"Given that the markets in which the companies operate are substantial, the outlook for the enlarged group is strong," said Mr Bailey. "It will also provide an excellent platform for Xpert Technology to bring new products to market in Ireland and provide access to significant opportunities in the UK."

The company was majority-owned by British venture capital firm Lloyds Development Capital, which funded a management buyout around three years ago.

The enlarged group will employ around 500 people and will operate from 10 locations. The deal is technically a reverse takeover, because Xpert's value is greater than that of Redstone, and will require Redstone shareholder approval at an extraordinary general meeting later this month.

Redstone chief executive Ian Brown said the deal would transform both companies and was a significant milestone in Redstone's development. "The operational and geographic fit of Xpert and Redstone makes perfect commercial sense. This, combined with the target markets both companies share, will enable the combined businesses to look forward to the future with increasing levels of confidence," he said.