€23.5m bonanza from Pilton sale

A DUBLIN family who founded a DVD and video games distributor are €23.5 million richer after selling the company to DCC.

Nicholas Furlong, a 57-year-old businessman living in Killiney, and family are the biggest beneficiaries of the sale of their company Pilton. And they could earn a further €20 million over the next three years if the company meets certain profit targets.

Mr Furlong, an accountant by training, will remain on as managing director of the Pilton. Other directors of the company include Peter O'Grady Walsh, the former Paddy Power finance director who launched an audacious takeover bid for Arnotts three years ago.

The company was set up more than 20 years ago and is one of the largest video games and DVD distributors to the entertainment market in the country.

Pilton has two main trading subsidiaries: NCV Distribution in Dublin and VHS Distribution in Belfast. It also has a developing business in Britain. Around 57% of sales come from the Northern Ireland side of the business.

In the year ending January 31, 2005, Pilton had sales of 72 million, up from €69m the previous year with pre-tax profits of €6.1m, also up on the prior year.

DCC said Pilton's profits had risen on the back of the growth in the home entertainment market and in particular the growth in DVD sales.

The company, based in Ballybrack, Co Dublin, employs 109 people.

Pilton will become part of DCC's IT distribution division and will be complementary to its subsidiary, Gem Distribution, which has been growing strongly in the distribution of entertainment and consumer digital products to the retail sector in Britain, it said in a statement.

"The acquisition of Pilton will expand the product range and retail market reach of DCC's IT distribution division within the growing market for entertainment and consumer digital products. It will build on DCC's position as a leading distributor of entertainment and consumer digital products to the retail channel in Britain, which in the year to 31 March, 2005, accounted for 42% of the division's profits," DCC chief executive Jim Flavin added.

DCC's IT division have the sole distribution rights in Britain and Ireland for Microsoft's X-Box video game console and software.

According to brokers yesterday, the takeover will add about 25% to this division's operating profits and 2% to earnings per share for the entire group this year.

"This purchase will significantly enhance DCC's presence in the retail channel, complementing its existing strength in the reseller market. The terms of the deal are attractive based on historic profits and there should be scope for generating revenue synergies from the existing software business," NCB Stockbrokers said in a research note yesterday.