Shareholders of Clonakilty-based Global Shares received an additional €45m cash windfall when the company’s sale to US banking giant JP Morgan was completed earlier this month.
The strengthening of the US dollar since the transaction was announced in March added another 7 percent to the value of the transaction in euro terms, putting millions more in the pockets of investors and employees.
The sale price was originally just over $730 million, or €665 million, when it was announced on March 15, but the euro’s depreciation against the dollar brought the figure to 710 million by the time the transaction closed on August 11 Euro.
The extra money will have a significant impact on the local economy in West Cork, where most of the company’s 660 employees live.
Global Shares management and employees, who joined before negotiations with JP Morgan began last year, are understood to have received shares converted as part of the transaction. The company’s CEO is Tim Houston.
Lenders, including Ireland Strategic Investment Fund (Isif), also benefited from the currency’s windfall.
Paris-based private equity firm Motion Partners, which in turn has an investment from Isif, acquired a 40% stake in Global Shares for approximately $25 million in July 2018.
Technology guru Pearse Mee was an even earlier backer, investing in the Irish business back in 2017 in a funding round also attended by Fexco founder Brian McCarthy, Blarney Castle owner Sir Charles Colthurst and KPMG partner Eoghan Quigley.
Global Shares had valued this capital raising at a relatively modest 28.2 million euros. Richard Hayes, the founder and former CEO of IFG, also led a previous investment round.
Global Shares, which provides software that facilitates the establishment and operation of employee stock ownership plans, will now be integrated into JPMorgan’s wealth and wealth management arm as an originator for new business.
The dollar has strengthened against the euro this year on the back of Russia’s invasion of Ukraine and aggressive monetary tightening by the US Federal Reserve.
The euro and dollar were at par on Monday as investors sought safety in US assets. The Global Shares deal closed at $1.03 with the Euro.
https://www.independent.ie/business/irish/stronger-dollar-lands-45m-windfall-for-global-shares-investors-41929782.html Stronger dollar brings 45 million euros windfall for Global Shares investors