Pipex owner joins rich list

DAVID Rickards has joined the ranks of Britain's richest businessmen after selling his internet company Pipex for £55m - of which £50m is in cash.

The 37-year-old entrepreneur from Hertfordshire announced the internet service provider's sale to AIM-quoted GX Networks in a deal that underlines a new phase in the development of internet businesses after the dotcom bubble burst three years ago.

Rickards bought Pipex from troubled US telecoms giant Worldcom in 2001 for an undisclosed sum and spearheaded its move into the fast-growing high speed internet connection market just as it was being opened up by deregulation.

It has a 6% share of the UK market for ADSL, or broadband connection which enables faster downloading of content from the net.

The gamble paid off and Pipex rapidly established a prominent position as internet service provider to small businesses. It is also highly profitable. In the year to May 2003 it made a taxable profit of £10.1m and currently holds about £20m cash. Rickards, who owns 100% of Pipex, will join GX's board under the group's chairman, Peter Dubens, also 37, who has rapidly built up the company into a substantial network services provider through a series of acquisitions.

Despite his youth, Rickards has built up a track record as a serial entrepreneur and was previously involved with two other private businesses, Waycourt Estates and an IT company, Highway Response. He is believed to have considered several other approaches for Pipex, a pioneer in the ISP market in the UK, but decided to opt for GX to maintain the Pipex brand.

He said: 'We needed an alliance with a larger organisation to take our business into the next stage, Gx, with its highly resilient network presence, and a similar culture to ours is the right choice for us.'

Dubens said Friday's deal will make GX cashflow positive and will turn the group into one of the top five providers of high-speed connections specialising in the small business market. The group will change its name to Pipex Communications.

The deal is being partly financed with a share placing at 6 1/4p to raise £15m. it is also borrowing £10m.

The placing is the second fund raising by GX in less than two months and is part of Dubens' strategy to mop up small telecoms businesses with an established customer base but no expensive networks to maintain.

'This is an important acquisition and will improve the mix of our products,' he said.