Carlyle benefits from Sonera asset sale

Carlyle Group has led a private equity consortium in the E35m acquisition of SmartTrust, the data security firm which only two years ago had a multi-billion euro valuation.

Carlyle Europe Venture Partners has led the E35m acquisition of a majority shareholding in Sonera SmartTrust, a wholly owned subsidiary of Finnish telecommunications operator Sonera Corporation.

Carlyle is heading a syndicate including GE Equity and EQVITEC Partners that has acquired a majority shareholding in SmartTrust. Sonera will receive less than half of the E35m purchase price, with the remainder going towards developing the firm’s business going forward.

The data securities firm was one of the major bubble companies of the technology boom. In early 2000 Merrill Lynch issued a research note valuing SmartTrust and Zed, Sonera’s mobile portal division, in excess of E28bn. The subsequent collapse in technology valuations led Sonera to commence a program of disposals of its non-core operations.

Sonera’s head of strategy Nicholas Sonkin said that Sonera had decided to sell its interest in SmartTrust last year, adding that it had been tough to close the deal in the current oppressive tech market environment. The sale by Sonera is part of it’s a restructuring process ahead of its planned takeover by Telia.

Antti Vasara, CEO of SmartTrust, said the private equity backing would enable the company to realise its growth potential. “With this backing I believe we have a great chance of becoming a significant player in the mobile software security market.” SmartTrust reported turnover last year in excess of E35m.

Since the beginning of 2002, Carlyle's European venture fund has made investments in a number of IT and technology firms including Apama, a real-time business analytics software developer; a E20m investment in Opto Speed, a designer and manufacturer of optical-electronic components; and Trema, a cash and treasury management software developer, in which Carlyle led a $20m financing round.