Microsol seeks €4m in funding for US moves

Microsol, a Dublin-based producer of communication and automation products for the utilities industry, is seeking to raise €4 million to spur expansion into fresh markets, particularly the US.

Set up in 1986, Microsol supplies processor-driven components that enable electricity and telecommunications suppliers to remotely manage their systems.

The company, which employs 120 worldwide, including 50 in its Dublin research and development centre, also launches a new engineering and assembly facility today in Dubai.

Microsol expects to raise the full amount from its existing shareholders ICC Venture Capital, AIB Bank, Enterprise Ireland and Cairn Holdings.

With recent acquisitions of a company, ATS, in Connecticut in the United States, and an earlier acquisition in Australia, Microsol feels it is well placed to tackle the global market, said chief executive Mr Denis O'Connor.

The company has additional operations in Boise, Idaho and Denver, Colorado.

"The funding will last us through to the middle of next year," he said, helping in particular to finance a major push into the US market.

"We see huge growth in the US," he said, because of the projected $100 billion (€115 billion) investment to upgrade the US power grid, following the economically-damaging blackouts in August. In addition, the US Department of Homeland Security has mandated that all critical infrastructure be upgraded.

Mr O'Conner said that American power grids are mostly old and outdated and in need of urgent overhaul. He believes Microsol system management products will be attractive to the US utilities sector because they enable utilities companies to improve system operations now and then upgrade to all digital, internet-protocol based systems in the future.

Mr O'Connor joined Microsol in 1999 to guide the company towards a new business model. Microsol had spent years developing technology and then partnering with larger engineering companies such as Siemens and Alstom, "taking on the tough technical stuff but without the customer leverage," said Mr O'Connor. "Microsol had no business model to get a return on their investment."

He said in 1999 the company had about a two-year backlog of project commitments to clear, before it could begin to shift its focus to engage more directly with customers.

Microsol has beefed up its sales and support team and also continues to put significant revenue back into research and development - €1.2 million in the past year, Mr O'Connor said. Businessman Mr Nick Koumorianos has been appointed chairman of the board.

Microsol's turnover totalled about €7.5 million for the past year and the company expects to double that in the coming year, he said. The majority of revenue - €6 million - comes from its British operation, which employs 17 and has customers such as Scottish Power, he said. He believes British operations will generate €10-12 million next year.

Growth plans are aggressive, and if Microsol is successful in the US the firm may seek further investment capital as early as next year, he said.