A test of the institutional appetite for small capitalisation shares will come when Qualceram tries to issue equity to pay some of the £40 million (€51 million) cost of the much bigger British group Shires.

Qualceram - market capitalisation of less than €31 million - is very much at the small end of the small/midcap sector that has been spurned by institutional investors. So it will be interesting to see how successful the men from Arklow are in attracting the institutional moneybags to their cause.

Given Qualceram's size, the Shires deal is going to involve some pretty inventive financial engineering. Qualceram has the capacity to take on sizeable borrowings - it had interest cover of almost 34 times last year - but it is clear that a sizeable chunk of money will have to be raised through a share issue.

This is a crucial test for Irish small/mid-cap companies. If Qualceram can put together the debt/equity financing for a company the size of Shires, there is hope that good quality, expanding small companies will get the fuel they need to make the big step forward.