From Modems To Millions
Selling tech kit has been a great business for Michael O’Hara, founder of DataSolutions. Established in 1991, the IT distribution company weathered numerous upturns and downturns in the tech sector for over three decades before being acquired in October 2023 by Nasdaq-listed US firm Climb
Global Solutions.
Climb agreed to pay €15.4m for the business, plus a potential post-closing earnout. Data Solutions Holdings Ltd had net cash from operating activities of €1.2m in the year to March 2023, and that was after paying remuneration of €2.2m to directors Michael O’Hara and Francis O’Haire.
Michael O’Hara (60) owned 66.5% of the business with Francis O’Haire owning 17.5%. Other shareholders were
David Keating(5%), Roberta McCrossan(5%), Brian Davis(3%), Alan Smyth
and (3%).
The American buyer, with annual sales of $300m, was attracted by DataSolutions’ recent growth spurt. Turnover of €126m in FY23 was double the outcome two years earlier, and four times the sales achieved in FY18. Chalk it down to corporate investment in digital transformation, and O’Hara’s decision in 2016 to enter the UK market. That move came a quarter of a century after the venture was established, and in FY23 UK customers accounted for twothirds of turnover.
O’Hara was 27 years old when he established DataSolutions, which trades out of Nangor Road Business Park in D12. The business began life wholesaling modems to resellers in the early 1990s, and O’Hara’s head was turned in 1995 at the CeBIT computer trade show in Germany, when he struck up a relationship with Citrix, then a networking minnow.
The new direction of travel for DataSolutions was the cloud and digital workspaces, with a focus on IT security added at the start of the 2010s. Nowadays DataSolutions’ suite of products includes hybrid cloud services and cybersecurity functions, using suppliers such as HPE Aruba, Check Point, Neustar and of course Citrix.
The selling of big-tech kit is a low margin business – DataSolutions’ gross margin is 5.8% – and good cashflow management is vital. The holding company’s March 2023 balance sheet showed €25m in liabilities, €2.4m in cash and €24m in trade debtors. O’Hara has remained in the business but now the trading risk has been offloaded.
In a December 2021 Business Post
interview, O’Hara opined that the IT sector has been very lucky because the impact of the pandemic was like the hockey stick effect, where after steady growth year after year suddenly demand just shot up overnight.
“That digital transformation has helped drive the IT sector over the last number of years and I don’t see the demand growth slowing any time soon. Right now, I think information technology is the sector to be in,” he added, prophetically.