Sale nets Merrion founders €38m

THE founders of Merrion Capital are set to walk away with over €38 million from the sale of the business to Icelandic group Landsbanki for a total of €55.3m.

The founding directors include John Conroy, chief executive, Rory Gillen, Shane Nolan and Adrian O’Carroll.

Other key shareholders privy do the deal are Barry Connell and Kevin Kielty.

The directors and the 75 employees account for the 70% of the company’s equity while New York-based investment bank Allen & Company own the other 30% worth close to €17m.

Mr Conroy - who owns between 10-15% of the equity - will walk away with about €5m on the basis of the agreed offer.

The other major players will each take several million from the deal while the workforce will also receive compensation for their lesser stakes in the business.

Only 50% of the company is being bought in the initial phase of the deal due for completion before Christmas.

Mr Conroy said the rest of the agreed price will centre on the earn-out performances over the next three years and could push the final value well above the current offer figure of €55.3m.

Merrion is an independent stockbroking and corporate finance house set up in 1999 with a market share of between 5-10%.

Projected profits for 2005 are between €7 and €7.7m.

Landsbanki is the seventh largest bank in the Nordic region with a market capitalisation of €3.3 billion and a balance sheet of €15bn in assets.

This bank achieved profits of €218m in the first nine months of 2005 and is highly acquisitive.

In recent years it has added more than 11 subsidiaries.

It has offices in all major financial centres in mainland Europe and in New York.

In Iceland it provides corporate, commercial and investment banking services, private banking and asset management.

In Iceland, where the population is a mere 290,000, the bank is the leading player in the retail sector with 48 branches.

Across the other sectors of its activity the bank boasts a 35-40% market share in its domestic market.

It currently employs 1,640 people of which 540 are outside Iceland.

Small banks such as IIB Bank in Ireland may become a target, said one source close to the deal, as Landsbanki looks to put down deeper roots here.

Landsbankki chief executive Halldor J Kristjansson said the favourable outlook for European equity markets offered opportunity to the group to “develop its combined pan-European brokerage services and to expand in Ireland”.