Prime Active Capital, the investment firm led by financier Peter Lynch, has moved into a position of majority control over a chain of mobile phone stores set up in Atlanta by his former Eircom colleague Robert Haulbrook.
Having invested $5 million (€3.46 million) last October to take a 49 per cent stake in Mr Haulbrook's company, Cellular Center LLC, Prime Active Capital revealed yesterday that it has increased its stake to 80 per cent.
Mr Haulbrook established the business last August after his departure from Eircom, where he was chief of its mobile unit, Meteor. Cellular Center has opened seven stores in the state of Georgia since October, bringing its total to 24. The chain, which has an agency for Verizon Wireless, plans to establish 50 stores initially.
Formerly known as Oakhill, Prime Active Capital's other investments are in printing and card services. A former finance director of Eircom, Mr Lynch is executive chairman of the firm and a 20 per cent shareholder.
The deal to increase its investment in Cellular Center was executed in two steps on December 21st, said Prime Active Capital.
Mr Haulbrook's vehicle RWH Enterprises redeemed 162.41 share units in Cellular Center for $1.5 million. RWH Enterprises then transferred 180.09 units in Cellular Center to Prime Active Capital for $1.66 million.
The effect of the share redemptions was that Prime Active Capital's additional stake was acquired at the same pro-rata cost as its first investment in the business.
"Prime Active Capital has increased its shareholding as it believes that the quality of the management, the company and the addressable market offers significant opportunities for growth... Each store should on average achieve breakeven within six months of commencing operations. A number of other locations are under discussion at present.
"As Cellular Center is a start-up operation and only began trading in August 2007, it has little trading history.
"This investment in Cellular Center will have a negligible impact on the trading performance of Prime Active Capital for the financial year ended 31 December 2007."
