Spectel, a Dublin-based multimedia teleconferencing systems company, has completed a £10 million (€12.7 million) private placing, which should enable the company to expand its US operation.

The placing, which was organised by NCB Corporate Finance, was taken up in a 50/50 split between private and institutional investors.

Three domestic mutual funds are understood to have invested through the placing. Smurfit Venture Investments, which bought a 30 per cent stake in Spectel in 1997, has reduced its stake in the company to below 5 per cent.

The company, which builds software and hardware for conferencing, is now valued at £40 million and counts Telenor, Eircom and Goldman Sachs among its customers.

Most of the cash generated from the placing will be used to expand Spectel's sales and marketing operation in the US. The company recently opened an office in Chicago and will shortly announce the opening of a new office in Atlanta.

Approximately 20 staff are to be recruited in the next six months, bringing the total workforce to 120. The US operation will employ more than 20 people by the end of the year, and further recruitment may be required in the US if the company decides to establish a technical support centre at its Atlanta office.

"The US accounts for 85 per cent of the market for our products," said Mr Gerard Moore, chief executive of Spectel. "Our whole focus is to build up the team in the US."

After opening an office in Denver in April 1999, Spectel made $3 million sales in the US last year. This accounted for a large portion of the company's total sales, which were just under £5 million.

The company has recently established several subsidiaries in the US to target specific markets for appliances, enterprise and service providers. The companies are Spectel Enterprise Incorporated and Spectel Systems Incorporated.

Mr Moore said the company had yet to sell its latest product - a WAP-accessible audio and data conference solution that enables a person to use a mobile phone to reserve an audio and data conference. He said the product had been seen by two European telecoms companies.

Mr Moore said the company was on an initial public offering timetable of 12-24 months and would concentrate on building business.

"We proved we can provide world-class technology and we were saying to investors we just need to spend more on sales and marketing to benefit," said Mr Moore.

Spectel was formed from a management buy-out by the current chief executive Mr Gerard Moore in December 1996. The company says its turnover has grown fivefold since then and has been making profits since 1997.