Karl Deeter sells his business for €9m

Irish Independent

2 hours ago

Software Circle has bought about 95pc of Artificial Intelligence Finance Ltd (AIF), which supplies software to mortgage and insurance brokers.
An initial payment of €4.3m has been made, with a further €0.67m to be paid on the first anniversary of completion, and the remaining €4m over the next two years based on reaching certain performance targets.
Mr Deeter, a well-known mortgage broker and prominent contributor to Irish media on personal finance issues, owns about half the equity in AIF, which employs 23 people and has offices in Dublin and Ennis. He will continue to be part of the company's operations.
Gavin Cockerill, the chief executive of Software Circle, which is listed on the AIM exchange in London, said the purchase fits his company's strategy of buying high-recurring specialist software businesses. The deal will mean that Software Circle's annual group revenue is expected to reach £22m.
It is funding the purchase of Deeter's company out of existing cash reserves.
AIF's online platform was first developed by Mr Deeter in 2006, when he saw a gap in the market while operating his own brokerage. He incorporated AIF in 2020, with start-up finance received from Enterprise Ireland and other sources.
Shareholders include Tom Kennedy of Hostelworld, Paul McKeon of Propylon, Harry Largey of Commodore, Patrick Joy of Suretank and Austin Ryan of AMCS.
The business accelerated its expansion following last year's acquisition of Money Advice, making it Ireland's dominant software supplier to mortgage and insurance brokers as well as lenders and life companies.
The company offers a range of tools, such as OA Mortgage, OA Lender and OA Insurer, which it says integrate directly with life insurers and financial institutions.
When it was put to him by the Irish Independent that to go from start-up to sale in just five years represents unusually swift progress, he said: 'Sometimes people do it quicker, but we have built a profitable business and that usually isn't done in that period of time.'
Accounts for 2023 show AIF generated €2.2m in revenue, and it is understood there was a further growth in revenue last year. Software Circle said the valuation reflects expected annual earnings before interest and tax (EBIT), with the acquisition anticipated to be earnings-enhancing and cash-generative in its first year.
Mr. Deeter said Software Circle's track record as a long-term software operator made it the right partner to take AIF to the next stage. 'This is about helping brokers become the number one delivery channel for digital financial services in Ireland,' he said. 'It's a vote of confidence in our team, our customers, and our vision.'
He praised the support that AIF received from its initial investors and the state agency Enterprise Ireland. 'Our full team will remain in place, and for our customers it will be business as usual but with the added advantage of having a PLC owner who will help us deliver even more to our clients while moving us out of the 'start-up' space so we can tackle bigger opportunities.'