In a shining example of Irish high-tech success, MasterCard has bought Orbiscom, the electronic payments software firm, for $100mn.
The Irish electronic payments software company has been bought by credit-card giant MasterCard for approximately $100mn (€73.1mn). The company will now become a wholly owned subsidiary of MasterCard but its brand and its product line-up will continue. In a month when most news was of the depressing variety, not least with the devastating announcement by Dell in Limerick, Lyons and Orbiscom are a shining example that Ireland can generate world-class businesses in the high-tech sector.
Orbiscom was founded in 1999 and it received a number of patents for its payments technology which allows credit and debit cards to be used securely online. It facilitates enhanced payments to the payments industry via card networks. Since then, its success has grown and it is ranked as the leading provider of secure and innovative payment solutions to global players.
Last September, Orbiscom announced its technology was being used to create the MasterCard ‘In Control’ platform. This effectively allows someone making a purchase online or on the telephone to make the payment with their card but without revealing their real card details. Royal Bank of Scotland implemented the innovative system for its commercial-card customers and this was soon followed by a range of leading international financial institutions and internet firms such as Citi, Bank of America, Wells Fargo, PayPal, Swedbank and Banque Populaire.
First we take Manhattan
The company is based in Blackrock, Co. Dublin but also works out of offices in midtown Manhattan. Overall, it employs 50 staff. The business was not cheap to establish and in its early years, it had annual overheads of $20mn. This meant that by 2007, the year for which it last filed accounts, the company reported retained losses of $34.6m. But costs have been monitored very tightly and that same year, it also reported a profit of over $1mn.
Dublin businessman Paschal Taggart is a shareholder and chairman of Orbiscom. Other shareholders include AIB, Alphyra and Enterprise Ireland. But it has been reported that the main beneficiaries of the sale are likely to be Orbiscom’s founders, Graham O’Donnell and Ian Flitcroft. Private equity group HgCapital has also said that it will make €5.9m from the sale, which is a 1.8 times multiple on its original investment.
Orbiscom has generally kept a low profile despite its success. Back in 2007, chairman Paschal Taggart was forced to defend it from accusations of patent infringement by a French company.
It was seeking €21m in damages but the case went in favour of Orbiscom. The incident was little more than an annoying distraction and the Dublin company has gone on to build on its success and is now part of the MasterCard stable.
“We are pleased to solidify our relationship with Orbiscom,” said Robert W Selander, MasterCard president and chief executive officer. “By adding Orbiscom’s expertise, intellectual property and talented team of innovative payments-industry professionals to MasterCard, we will further accelerate the development of new payment solutions for our customers.”
Orbiscon’s Garry Lyons said the deal “enables Orbiscom’s innovations to come to life on a bigger scale.”
Orbiscom – tapping into a top market
- Its technology allows credit and debit cards to be used securely online
- Its counts major banks and internet firms among its customers
- Founded in 1999 in Blackrock and Manhattan.
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