PFH Founder’s Mega Exit
PFH Technology is a mainstay in Ireland’s IT service providers, and after nearly 40 years in business the company founded in Cork by Paul Hourican is kicking off a fresh chapter under its new Japanese owners. Ricoh agreed a deal to acquire PFH in April 2023, and the competition watchdog cleared the purchase in mid-May.
PFH Technology Group had turnover of €175m in the year to June 2022, and booked an operating profit of €10m. Press speculation on the deal value centred on c.€100m, and Hourican was reported to own 75% of the PFH parent registered in the British Virgin Islands.
PFH provides managed IT services like cloud and cybersecurity for over 1,000 customers, including the HSE, Glanbia, and Nissan. It serves clients across Europe and competes against other Irish IT providers like Ergo and TEKenable.
Paul Hourican hails from Co. Longford and is the youngest of 12 children. He was brought up in Dublin after his parents sold their farm. After school he moved to Cork to work with his brother, and he studied cost management accounting. He got to know the early version of accounting machines and computers at Bryan S Ryan, and set up his own business when he was 28 years old, selling accounting systems and word processors.
In 2006, PFH Technology Group was born when Hourican subsumed CK Business Electronics in Galway. The 2009 recession led to acquisition opportunities, such as Siemens Enterprise Communications and the Irish division of Redstone. These deals strengthened PFH’s presence in Dublin and put it on the radar for public sector contracts.
Further buys followed later in the decade – cloud security specialist TerraAlto and a minority stake in Client Solutions. Turnover tripled from €31m in the three years 2008 to 2020,
and after Covid and the rush for digital transformation, sales kept on growing.
At 22%, the gross margin for IT services is far higher than for selling equipment. It has to be, as the staff costs are larger too: PFH’s average personnel cost for 715 employees in FY22 was €51,000. Despite the high labour cost, top-end IT services are pricey in Ireland, with PFH delivering a net profit margin of 7.9% on turnover in FY22.
In 2015, Hourican de-risked his PFH exposure by moving to a chairman role and selling a 25% stake to management. “I wanted to get some of my life back,” he told The Sunday Times in an interview. More recently, as Hourican (66) mulled the next move for PFH, he decided that buying more peers in Ireland and the UK wasn’t for him.
Announcing the Ricoh deal in 2023, Hourican said that the Japanese firm’s scale and resources will mean that PFH’s customers can “evolve their IT services and realise their digital transformation ambitions at pace and with great support”. Ricoh is best known for its printers and cameras, but in recent years has been snapping up IT services companies across Europe.
“The high concentration of leading multinational businesses that have chosen Ireland as the European hub for their operations makes this a particularly exciting time for both businesses,” Ricoh Europe VP Alberto Mariani said of the deal.
‘This a particularly exciting time for both businesses’