The planned offer by Clondalkin management to take the print and packaging group private at a cost of around £300 million (€381 million) has generated interest in the future of other small and medium-sized companies which are finding it increasingly difficult to get the attention of the large-cap focused institutional fund managers.

Certainly, there seems to be no shortage of venture capital to fund MBOs of this size, with British venture capital groups apparently ready and willing to put up large amounts of cash to back the aspirations of Irish managements. Witness BC Partners' willingness to be the main financial backer of the £682 million C&C buyout and the willingness of Candover to fund the planned Clondalkin MBO.

The difference between these two MBOs, however, is that BC Partners has backed C&C management with the express aim of floating the drinks and snacks group on the stock market in the next couple of years. Candover, however, by supporting a move to private ownership, will have to find a trade buyer in a few years time as an exit mechanism for its investment in the Clondalkin MBO.

That begs the question whether venture capital groups are going to indefinitely support moves to take companies private when by doing so they are automatically reducing one potential exit mechanism - taking the company public. Trade sales to another party or breaking a company up to release a profit will be the only ways for the venture capitalists to take their profit. That is hardly an ideal situation.

That said, how generous is the Clondalkin management with its offer of around €9.00 a share? Certainly, investors less than happy with the recent share performance, have reason to be happy with the planned offer.

At €9.00 and forecast earnings from ABN-Amro of 80.7 cents, the offer is equivalent to 11.1 times forecast 1999 earnings - a good multiple given the single-figure price to earnings ratio of most small and mid-cap companies on the Irish market.

Still, even at €9.00 Clondalkin is at a level where it has underperformed the Irish market by over 25 per cent over the past three years. But those days of high p/es are gone for companies like Clondalkin and the proposed offer from Norbert McDermott and his MBO group is probably the best Clondalkin shareholders can expect.

This will be the first time that an Irish plc will have been taken private and will inevitably focus the minds of management of companies trading at low ratings and suffering from institutional disinterest. Even before the Clondalkin MBO plan broke, there have been reported efforts by Joe Moran to put together a MBO for IWP, while the Unidare management is also thought to have toyed with the idea of a buyout.

Abbey, Adare, Greencore and Kingspan are other potential MBO candidates and even a recent arrival on the Irish market like Athlone Extrusions is a possibility given the way the share has suffered since the flotation a year and a half ago.

Add in takeovers like the expected Grafton move for Heiton and the ranks of Irish plcs may be much reduced over the next few years.