Priority Data, one of the country’s longest established antivirus and security providers, is to continue trading under new management following the injection of working capital from the Dutch company, Unit 4 Agresso.
The rescue deal contains provision for a complete equity buy-out of Priority by the publicly quoted Dutch firm. Priority’s new management team is headed by CEO Pat O’Connor and group sales manager Aideen Kellett.
The Irish firm had run into some financial difficulties in the recent past. The slowdown in the IT market had affected the company, which was forced to make some of its staff redundant last summer.
More specifically, Priority Data was the last European republisher of the Dr Solomons antivirus toolkit to update its licence agreement. The terms of the new deal significantly reduced margins for this part of the Irish firm’s income.
Priority’s plan to provide managed security services — and the cost incurred in trying to do so — was at least partly to blame for its recent financial woes. The company had looked at acquiring new premises and had begun increasing staff and training them to be able to provide this service.
Consisting of a number of subsidiaries, the Priority group had posted losses before interest and tax of £200,000 for the year 2000. Although Priority Data Limited (PD Ltd) had incurred a loss of close to £970,000 for the same period, this was because of a write-off for the losses incurred by the US operation and research and development.
‘Other companies in the group provided for a profit to counterbalance this loss,’ O’Connor pointed out.
PD Ltd became the pivot company for the funding for both the US and UK operations. It also provided the funding for the research and development of PD Secure, an access-control software product which Priority had developed.
During the year 2000, the company decided to close its US operation in Boston and also ceased development of PD Secure. The losses incurred on these ventures were written off within Priority Data Ltd’s books.
All PD Secure licences have been honoured and the last Irish contract for the product finished in December of last year.
‘Without the diversification into these different market units, PD would have returned a healthy profit,’ explained Pat O’Connor. He added that this diversification, which was intended to accelerate the company’s growth, was an accepted strategy at the time.
The company is optimistic for the future and anticipates a return to profit, having decided to focus on the local business. The group’s core Ireland and UK business — reselling IT security systems from vendors such as Network Asssociates, Check Point and Baltimore — continues to be financially successful.
‘This is the area on which we will focus and divert 100 per cent of our attention,’ O’Connor told ComputerScope. ‘When the accounts are audited for the year 2001, we will not be reporting a loss-making year as previously.’
As a result of the partnership deal, Priority will have access to Unit 4 Agresso’s range of products and services. Ironically, this means it will be able to enter the managed services market once more, albeit with the backing of a wealthy parent company that has already invested in this area. ‘We don’t need to build a managed services centre — Unit 4 already provide a 24×7 centre,’ O’Connor pointed out.
Unit 4 Agresso is one of the largest business software and security providers in the Benelux region. The company has 1,300 employees in a number of offices around the continent. It is listed on the Dutch and Norwegian stock exchanges and its most recently announced revenues for the year 2000 were €168m.
Priority founder Alec Florence is no longer involved with the company. ComputerScope understands he has yet to receive a fee for his stake in the firm, but once the loan period is over, he will be line to be compensated for the sale. He is believed to be working in a management consultancy role following his departure.
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