ENDA O'COINEEN'S recent update of his book The Unsinkable Entrepreneurwas timed nicely to coincide with the Volvo Ocean Race's stopover in Galway, which he helped to negotiate.
It also shed some light on Irish entrepreneur Seán Melly, who is eyeing up a bid for Eircom with the backing of JPMorgan.
The pair worked together in the late 1990s at a company called Globix, which was set out to benefit from the deregulation of the Czech telecoms market.
Melly paid €63,500 for a 30 per cent share in a business that was O’Coineen’s brainchild. He had already made a few quid from TCL Telecom in the 1990s, which he sold to MCI WorldCom.
“Of all the potential partners I had looked at, Seán seemed the best,” O’Coineen recalls. “He had a reputation for being a sharp operator who didn’t take prisoners. True to his reputation, Seán was tough to negotiate and do business with, but most importantly of all, when he gave his commitments he honoured them.”
Globix was successful, but divisions emerged between Melly and Radek Brnak, a local shareholder, on its expansion.
Melly wanted to take it to neighbouring countries and set up eTel with a view to buying Globix.
In late 2000, Melly raised $50 million from private equity groups for a 45 per cent share in eTel and bought Globix for $35 million. O’Coineen and Brnak got a lump of cash and shares in eTel.
“With eTel, Seán pursued the central European telecoms market and made excellent progress. By 2004, it had expanded to four more countries, had 43,000 customers and annual revenues of €100 million.”
Melly sold eTel to Telekom Austria in 2006 for €104 million, netting about €10 million.
Of course, mounting a bid for Eircom, which is massively indebted and has been virtually sucked dry by its previous owners, will be an entirely different proposition, but O’Coineen’s book is a reminder of Melly’s capabilities.
