Spectrum Equity Investors, the US venture capital firm backing Mr Denis O'Brien's bid for Eircom, has been concentrating on acquisitions in the European communications sector for some time. The Boston based company is run by Mr Bill Collatos, a Californian former banker who sees European communications as "primed for outstanding growth". "Europe is ripe with companies that will benefit from growing computer networks," he said recently. "The trick is to find the best of the best."
Mr Collatos announced in December that Spectrum was committing some $580 million (€682 million) of an investment in European high-tech communications companies, particularly those powering the network economy. At the same time, Spectrum relocated Mr Michael Kennealy, a general partner formerly based at its headquarters, to London to head up European investment initiatives ranging from earlystage deals of $5 million up to $200 million.
Flotations and mergers brought many rewards for Spectrum, especially in the tech boom. One holding, American Cellular, sold to AT&T and Dobson Conmmunications for $2.5 billion. The company was an early investor in Internet Network Services, which was sold three years ago to Britain's Cable & Wireless. Mr Collatos's declared holdings in the US company, Pegasus Communications, include 85,000 directlyowned and 825,000 indirectly owned shares, currently worth a total of $20 million. Spectrum invested approximately $125 million in European enterprises in the last two years.
Mr Collatos (47), an economics graduate from Harvard, co-founded Spectrum in 1993. He began as a banker lending money to start-ups, eventually heading the media-lending group at Fleet Bank. He and fellow co-founder Mr Brion Applegate oversee four funds for Spectrum.
Investors in the current $1.7billion Spectrum fund include prominent international university endowments, foundations, pension funds, investment banks and senior executives from top communications companies, according to Spectrum. This is its fourth fund, and is almost three times as large as its third fund of $650 million, set up in 1999.
