IN DEFIANCE of the gloom overshadowing the business world, three Clare businessmen have agreed to sell their Ennis-based customer loyalty rewards company, Loyaltybuild, for €25 million to an American group, Affinion.
It is understood that founder and chief executive Dominic Considine, businessman Seán Lyne and financier Domhnal Slattery will receive half of the proceeds up front.
The balance will be paid over a number of years, based on the firm meeting certain targets.
The deal, which is expected to be announced this week, represents a major coup for the trio given that the ongoing credit crunch has put paid to virtually all corporate transactions worldwide.
They were advised by accountants Deloitte Touche and corporate finance firm Raglan Capital. Founded in 1999 at the time when Ennis was designated as Ireland’s digital-age town, Loyaltybuild creates and manages customer reward programmes on behalf of retailers, insurance firms and financial groups. It employs about 70 staff in Ennis and also has customers in Sweden, Norway, Finland and Switzerland.
The company specialises in hotel breaks. Its website says more than 3.1 million people across Europe have availed of its reward breaks and says these have helped major companies generate more than €1.75 billion in revenues.
The firm manages SuperValu’s “getaway breaks” campaign, which offers holiday breaks to the supermarket chain’s regular shoppers. Axa Insurance is another Irish client.
As 70 per cent shareholder, Mr Considine, who is 42, will be the biggest beneficiary, pocketing about €8.5 million up front from the sale. Mr Lyne, who owns 25 per cent of the business, will earn about €3 million initially. Mr Slattery receives about €600,000.
Mr Lyne and Mr Slattery co-own the Clare People newspaper. Mr Slattery heads Claret Capital, a Dublin-based investment group that manages money on behalf of a number of wealthy Irish families and individuals.
The sale price represents a substantial multiple of the firm’s revenues and profits. The latest accounts for Loyaltybuild filed with the Companies’ Registration Office show that it made a pre-tax profit of €641,417 in 2007 and had shareholders’ funds of €1.6 million.
Based in Connecticut, Affinion was founded in 1990 and is owned by Apollo Management, a US investment firm. It claims to have 5,300 affinity partners worldwide and annual revenues of more than $1.3 billion (€973 million).
