Dermot Desmond’s Datalex stake to rise to 49.3% after cash call

Billionaire Dermot Desmond’s stake in Datalex is set to rise to 49.3 per cent as the Irish ecommerce software provider to airlines completes a share sale largely designed to repay expensive loans from the businessman.
Datalex announced the final results of a multipronged €25 million share sale in a statement on Thursday morning, ahead of an extraordinary general meeting (egm) aimed at approving elements of the cash call.
Mr Desmond, a long-time investor, has been a consistent provider of finance to Datalex since it was rocked five years ago by an accounting scandal and, subsequently, the Covid-19 pandemic.
Mr Desmond’s IIU Nominees investment unit owned 40.3 per cent of the company before the share sale was announced in late August.
Datalex owes another Desmond vehicle, Tireragh, more than €19 million, including built-up and unpaid interest and fees. The loans currently carry an 18 per cent interest rate and are due to be repaid by the end of the year.
The egm includes a resolution that would waive the normal obligation under Irish takeover rules for Mr Desmond to make a mandatory takeover bid for Datalex.
The Irish Takeover Panel agreed three years ago to waive a normal requirement that Mr Desmond make a mandatory takeover offer for the remainder of Datalex, after he pushed through the key 30 per cent stake threshold as a result of another €25 million equity raise. It agreed late last month that he could increase his stake to as much as 52 per cent without triggering an offer, subject to shareholder approval.
After Tireragh is paid back, the remaining €5.2 million net proceeds from the share sale will be used for working capital and to invest in the company’s products.
Datalex also plans to raise a minimum of €5 million early next year in a follow-on share sale, with the size and timing of that cash call to be “determined by the pace at which the board wishes to invest in its anchor solution and in new product offerings”.
The cash call consisted of three parts, a so-called firm placing with large shareholders. Nick Furlong’s Pageant Investments owned 8.3 per cent of the company before the transaction, while the businessman held a further 3 per cent personally. Sean O’Driscoll, the former chief executive of consumer electrical goods group Glen Dimplex, owned a further 5.3 per cent.
Datalex also raised a further €8 million from an open share offer to existing shareholders the closed on Monday. The third part was an agreement by Mr Desmond to buy whatever shares were not taken up by small investors under the open offer. If no small shareholders took part, his stake would have risen to 52 per cent.