Project Telecom founders net £56m

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The Independent Online

Tim Radford and Richard Cunningham - the chief executive and finance director of Project Telecom - are to make £56m between them after the company they founded 16 years ago received a cash offer from Vodafone.

Friends and family of the pair, who control another 24 per cent of Project Telecom's equity, are likely to make a further £37m - boosting the total to nearly £100m.

The mobile phone operator Vodafone agreed yesterday to buy Project Telecom, which provides telecoms services to the business market, for 70p a share in cash, valuing it at £155m.

Mr Radford, who will make £37m from the deal, has agreed to stay on at the company, which employs a staff of 600, to oversee its integration into Vodafone. After that, he says he is keen to carry on working with Mr Cunningham and to set up another business.

"I'd like to start another business, probably in the IT services space and we've got a few ideas," he said. "I'm an entrepreneur. This is the second business I've sold and it's in my blood and Richard and I would very much like to see if we can do it again."

After issuing a profit warning in April, Project Telecom was, in effect, put up for sale after other options were ruled out. "It became increasingly obvious that the network operators wanted direct visibility of their customers. We were also increasingly competing for new business against operators who were asking for support to win that business. That was becoming a very difficult conversation to have," Mr Radford said.

About six companies are said to have expressed an interest in buying the business but Vodafone was particularly keen. Of Project Telecom's 220,000 customers, about two-thirds are on the Vodafone network.

The price the operator is paying represents a premium of about 43 per cent over the Project Telecom share price the day before it announced it was in discussions.