Dublin-based travel communications software company, Datalex, has announced its second major acquisition this year.
The company will acquire Atlanta-based Internet technology company, Web Ventures, for about $5 million (£3.4 million). The investment, to be split between cash and paper, will push Datalex a year ahead in the development and deployment of Internet products for airline computer reservation systems.
Datalex is a strong player in the communications gateway industry, with approximately one-sixth of 150,000 travel agents worldwide operating Datalex technology to connect to the four airline computer reservation systems - Sabre, Galileo, WorldSpan and Amadeus. Last June, Datalex purchased a mainframe applications group, NRG, for just over $1 million, providing it with an edge in the provision of mainframe applications for reservation, cargo and department control software.
Datalex will invest a further $1 million in the development of Web Ventures over the coming year. "This acquisition strengthens our presence and potential in our market and enables us to offer a greater range of world-class Internet products. The Web Ventures Internet booking engine is used by several of the world's leading airlines and global distribution systems," said Mr Neil Wilson, chief executive officer of Datalex.
The 13-year-old company's recent acquisitions have been funded by £4 million raised in equity finance last April. The financing was led by ICC Venture Capital, which took a 15 per cent shareholding; Mr Dermot Desmond's company, International Investment Underwriters (IIU), holds 10 per cent; and Enterprise Ireland took an 8 per cent interest. Mr Wilson retained more than 50 per cent of the company, leaving Datalex valued at more than £20 million.
Mr Wilson says the company, which employs 80 people, is on target for predicted revenues this year of $10 million.
Datalex has been tipped by analysts to seek a stock market flotation, but Mr Wilson has ruled it out in the short term at least. "We have a couple of good quality shareholders, and we are very happy with the availability of private funds at present. We don't see the public market as some nirvana for shareholders to cash in on. At the moment we are quite happy with private institutional investors."
