Desmond fund buys €392m telecoms business

A venture capital fund backed by Dermot Desmond and former Parthus chief executive Brian Long has bought a global telecoms player for almost €400 million, reports Barry O'Halloran.

Atlantic Bridge Ventures said yesterday that it had bought LogicaCMG's telecoms products business with a group of private equity buyers for £265 million (€392 million). The operation develops technology for text, voice and video message services used on mobile phones and other devices.

Atlantic Bridge is a private equity investor based in Dublin and London. Its backers include financier Dermot Desmond's International Investment and Underwriting (IIU) vehicle, which manages assets worth about €15 billion.

Other investors have included telecoms entrepreneur Denis O'Brien and former Smartforce executive Bill McCabe. Atlantic Bridge is 50 per cent supported by US holding company Access Industries.

Brian Long, the founder of Irish Nasdaq-listed semiconductor and mobile technology specialist Parthus, is its managing partner. Parthus merged with Ceva five years ago.

Elaine Coughlan, another former Parthus executive, is a partner, along with former Goldman Sachs International director Paul Harvey and the former Microsoft vice-president for Asia and Europe, Kevin Dillon.

Mr Long said yesterday that LogicaCMG's telecoms products operation was a leading provider of the technology used for message services, with about 66 per cent of the global market.

It also provides payment systems for pre-paid and post-paid mobile-phone users, as well as other content and media services.

The company's technology is used by 300 clients, who in turn provide services to about one billion consumers worldwide. Its clients include most of the major telecoms players.

The operation's new owner is renaming it Acision.

Several years ago, Logica bought Aldiscon, the Irish company that developed short messaging technology for mobile phones.

Larry Quinn, Aldiscon founder and former Logica Mobile Networks chief executive, is leading the consortium with Atlantic Bridge, with whom he works as a venture partner specialising in wireless technology.

In 2005, the last year for which figures are available, it had revenues of €377 million. Earnings before interest, tax and write-offs were €34 million, and its operating surplus was €20 million.

Mr Long said yesterday that the price paid represented good value as it was "about one times revenue".

He said Logica decided to sell because it provided information technology services, while the business that will become Acision will be focused on developing technology and products.

"Our first goal is to consolidate the position of the company and to accelerate revenue growth and profitability over the course of the next two years," he said. "After that, everything is on the table, including a public offering."

Atlantic Bridge's other investments include semiconductor specialists Firecomms, Glonav and Nanotech Semiconductor; software developers Polar Lake and Nero; and network developer Accuris.