BELFAST BRIEFING:Big international players are acquiring indigenous high-tech firms and helping them grow, writes FRANCESS McDONNELL

COULD A new generation of step-ups rather than spin-outs prove to be the silver lining of the dark clouds hanging over the North’s economy?

If the latest multimillion-pound acquisition by an American industry leader is anything to go by then perhaps there may be a recessionary rainbow in sight.

Belfast-based Omiino was the brainchild of three local entrepreneurs who had racked up many years of experience working in the telecommunications industry for companies such as Nortel and Flextronics.

Like many talented people in the North who realised their particular sector was facing a very uncertain future, Gary Hamilton, Mark Carson and Andrew Brown decided to take a risk together.

They established not a traditional spin-out company but what has been called a step-up high-tech firm, specialising in programmable microchips.

Barely four years since they went into business their brainchild has been acquired for an undisclosed sum and has become part of Silicon Valley group Xilinx.

The acquisition of Omiino is far from a rarity in Northern Ireland these days.

In fact, it is just the most recent example of a series of stealth acquisitions by big companies who have swooped on what were previously some of Northern Ireland’s most promising, indigenous firms. In the last 12 months two of Belfast’s high-tech stars, Lagan Technologies and apt-X, have been snapped up.

Lagan Technologies, which specialises in government-to-citizen technology, was acquired by the US software group Kana, while apt-X was taken over by UK-based wireless technology group CSR.

These start-ups are in good company when it comes to selling out and becoming part of a bigger corporate family.

They join the likes of Wombat, the Belfast software company which the New York Stock Exchange bought for €200 million, and Lisburn-based technology specialists Kelman, which was acquired by GE Energy.

These and other multimillion-pound deals – such as the sale of Tomcat Systems, the cardiac information software specialist, to Philips and the acquisition of food processor Moy Park by the Brazilian group Marfrig – have helped to safeguard thousands of jobs.

Invest NI, the regional economic development agency, believes these types of acquisitions are an endorsement of what the North has to offer to global companies and are helping expand both the local skills and research base.

According to the Belfast-based venture capital fund manager Crescent Capital, they also highlight how Northern Ireland is fast developing its own inward investment programme.

Deirdre Terrins, one of Crescent’s investment managers, believes these acquisitions are proof that Northern Ireland has the ability to create and grow world-class firms.

“What we are seeing here is foreign direct investment in Northern Ireland by acquisition. International companies are investing in established, venture-backed Northern Ireland companies and they are helping to grow these companies to the next level. The successful acquisition of local companies helps create further investment opportunities and job opportunities for Northern Ireland,” Terrins said.

Crescent has an established track record for backing the right company in this respect.

It was an early investor not only in Omiino but also Lagan Technology and apt-X.

But apart from an early source of finance what Omiino, Lagan and apt-X also have in common is the fact their success was built on the back of the vision and determination of local people.

In Lagan Technology’s case Des Speed joined its original founders to create a winning customer relationship management product for government.

Noel McKenna successfully inspired apt-X to develop and sell its world-beating audio-compression technology to global organisations such as Apple.

It is entrepreneurs such as these, who are prepared to step up to the challenge and embrace the risks of going into business – and in many cases putting their own money on the line – that Northern Ireland needs to encourage.

Local entrepreneurs who sell on their hard-won start-ups to internationally recognised corporations and groups are not selling out – they are trading up, which is exactly what the North’s economy needs to do now.