A syndicate of international private investors is using a Dublin-based vehicle known as BlueCoral Ltd to acquire a fast-growing US broadband player called Winncom Technologies for $17 million (€13.29 million).

Tax consultant Martin Lacey, a partner in the Dublin office of the accountancy firm RSM Robson Rhodes, is one of those behind the transaction. Israeli businessman Dmitri Smetanitch and Zurich-based lawyer Markus Hugelshofer are also involved.

In a deal that is partially tax-driven, BlueCoral will act as holding company for Winncom once its acquisition from Colorado-based ARC Wireless Solutions is completed. Though registered at present in Maryland, US, Winncom's main interests are in the former Soviet republics of eastern Europe and central Asia.The company also has interests in Russia.

Mr Lacey, Mr Smetanitch and Mr Hugelshofer are directors of BlueCoral, which was a shelf company prior to the deal. Companies Office records indicate that all three are also directors of a Dublin-registered company called Bulmine Global Metal Trading Ltd, an agency business that imports steel into Europe from Russia. Like BlueCoral, Bulmine's registered office is at the RSM practice in Dublin.

While the names of the investors behind the Winncom transaction are not known, the syndicate is said to include individuals based in a number of international locations.

While the deal is subject to the approval of ARC shareholders, the group has told the Securities & Exchange Commission in the US that BlueCoral has placed $17 million in cash in an escrow pending completion of the transaction.

According to ARC, Winncom's revenues almost doubled to $26.16 million in the six months to June from $13.4 million in the same period last year.

ARC attributed the rise in revenues to a big contract with Kazakhtelecom, the business that helped bring Winncom's net profit to $795,000 in the first half from $246,000 in the same six months in 2005. ARC raised $48 million last January to finance Winncom's involvement in this project.

Despite the increase in sales, Winncom's profit margins declined. ARC said that the subsidiary's gross profit margin fell to 11.2 per cent in the six months to June from 15.9 per cent the same period last year.

The fall in profit margins was steeper in the April-June period this year, with gross margins dropping to 10.4 per cent from 16.7 per cent in the previous year. "The decrease in gross profit percentage is primarily due to Winncom's lower margin on the Kazakhtelecom contract," ARC said.