Irish billionaire Dermot Desmond is set to increase his investment in Datalex, with his stake anticipated to rise to 49.3%. Datalex provides ecommerce software to airline businesses and is currently finalising a €25 million share sale. This is predominantly designed to pay back high-cost loans from Desmond. The final tally of the share sale was announced on Thursday, in preparation for an extraordinary general meeting (egm) which will focus on securing approval for certain aspects of the cash infusion.
Desmond, a seasoned investor, has regularly supported Datalex financially, particularly following an accounting scandal five years ago and the impact of the Covid-19 pandemic. Prior to the announcement of the share sale at the end of August, Desmond’s investment subsidiary, IIU Nominees, held a 40.3% stake in the company.
Datalex is indebted to another of Desmond’s business entities, Tireragh, to which it owes over €19 million. This includes accumulated and outstanding interest and fees on loans that presently carry an 18% interest rate. These loans must be paid off by year’s end.
One proposed resolution at the egm is to discard the usual requirement under Irish takeover regulations for Desmond to initiate a compulsory takeover bid for Datalex. The Irish Takeover Panel agreed to this three years ago after he exceeded the critical 30% stake threshold, following another €25 million equity increase. It granted permission last month for him to expand his stake to as much as 52%, provided he receives approval from shareholders.
Once Tireragh is reimbursed, the remaining €5.2 million net proceeds from the share sale are planned to be allocated for working capital and investment in product development. Moreover, Datalex has future plans to generate a minimum of €5 million via an additional share sale due early next year.
Before the share sale, the company was also held by Nick Furlong’s Pageant Investments, which owned 8.3%, and the businessman possessed a further 3% personally. Sean O’Driscoll, the ex-CEO of Glen Dimplex, a consumer electrical goods conglomerate, held an additional 5.3% stake.
Datalex additionally procured an extra €8 million through an unrestricted offering of shares to current investors, which concluded on Monday. The third aspect encompassed Mr Desmond’s contract to purchase any remaining shares left unsubscribed by minor investors during the unrestricted offer. If these minor investors failed to participate, his ownership could have surged to a majority stake of 52 per cent.