Asavie Deal Was Trade Sale Highlight
The sale of Asavie Technologies to US tech giant Akamai Technologies was one of Ireland's trade sale highlights of the year, grossing €130m for shareholders. The vendors were advised by law firm Maples, and founding directors Ralph Shaw (€24m) and Tom Maher (€21m) did best from the deal, but the sale was worth in excess of €1m for around 30 other shareholders in the venture.
Akamai announced that its outlay to buy Asavie was c.$155m, or $128m net of cash acquired. In 2019, the Irish company had net cash inflow from operating activities of €5.4m, so the multiple paid by the Americans was x20 times that figure.
Akamai can afford the handsome earnings premium. In the nine months to the end of September 2020, the Massachusetts plc booked a net profit of $440m on revenue of $2,350m. While the Covid-19 pandemic has laid low many businesses, it has boosted Asavie’s prospects. Its platform manages the security, performance and access policies for mobile and internetconnected devices, just the ticket for mobile workforces.
The attraction for Akamai is that this clientless architecture particularly suits regulated verticals such as healthcare, financial services, and education. According to Tom Leighton, Akamai’s co-founder and CEO: “What’s notable about the Asavie solution is that as more IoT devices connect over cellular and 5G, it has been shown to be very easy to scale and protect them.”
Asavie Technologies was doing very nicely before Akamai came calling, though growth had plateaued. Turnover last year was €23.7m and operating profit was €2.3m, down 30% as headcount expanded from 126 to 136 people. With a cash pile of €26m mounting up on the balance sheet, shareholders were rewarded with a dividend of €4.2m, up from €1.4m the year before.
Ralph Shaw (56) had just turned 40 when he established Asavie in 2004 with Tom Maher (53) and Maurice McMullin (57). Shaw had previously worked as systems integrator with Mentec before joining Baltimore Technologies in 1998, the internet security company that briefly became a dot-com darling.
When Baltimore sold off its hardware encryption unit to AEP,
Shaw moved with the technology. Shaw says he saw an opportunity in providing on-the-go connectivity using 3G technology and early smart devices. “We went about solving the problem of securing connecting devices to corporate data,” he told Business Plus in 2016.
Asavie secured O2/Telefonica and Vodafone as customers to help them manage billing, customer care and other functions. “We then added more services to our main platform, which we had patented. We added enterprise and mobility management services, mobile-first technologies, IoT services etc. That gave us a scale point.”
Shaw owned 18.6% of the Asavie equity, with Maher on 16.4% and McMullin on 3.5%, according to filings. The company’s share register count of 90 increased by 19 people as the deal closed, with staff exercising options to share c.€9.4m between them.