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Renatus’ Weekly M&A Newsletter – 25/07/2021
July 25, 2021
Renatus’ Weekly M&A Newsletter – 08/08/2021
August 8, 2021
August 1, 2021

Cardinal Capital invests in Travelwin, Euroflex TEO is acquired by PorAmpac, Digitary merges with Parchment, Smurfit Kappa acquires Verzuolo and much more in this weeks Renatus Private Equity weekly M&A newsletter.

Renatus Private Equity Dublin, Ireland

Renatus Weekly M&A & Company Performance Private Equity Newsletter 01/08/2021

Dear Reader,

Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.

M&A ACTIVITY

Cardinal Capital invests in Travelwin

Deal Details: Cardinal Capital Group, through its Cardinal Partners Ireland fund, has invested in Travelwin Group’s electronic SIM technology venture Sim Local.

This is the third investment of Cardinal’s €250m fund, which is dedicated to growth investments for companies across the island of Ireland.

Dublin-based Sim Local, founded in 2011 by its CEO Killian Whelan, sells pre-paid SIM cards that international travellers can purchase to give them access to local mobile phone tariffs, rather than pay roaming charges. In 2019 Sim Local sold from 300 contracted sales points across Europe and the US and served 700,000 customers.

Advisers: None mentioned

Renatus Comment: Sim Local’s target market is international travellers and offering them a solution to avoid expensive roaming charges. The business is reported to have taken a hit during covid, but this investment is a signal from Cardinal in its confidence in a return to international travel post-covid. At June 2021, international passenger demand was 80.9% below the June 2019 level, an improvement from 85.4% in May 2021, with all regions bar Asia-Pacific showing improving trends. Hopefully with growing vaccine coverage and covid passports, international travel will make a steeper recovery in the second half of the year.

Source: Silicon Republic

Euroflex TEO is acquired by PorAmpac

Deal Details: County Donegal-based Euroflex TEO has been acquired by global packaging company ProAmpac for an undisclosed amount.

Based in Cincinnati, leading global flexible packaging company ProAmpac is owned by Pritzker Private Capital along with management and other co-investors.

Euroflex Teo, owned by Derek Richardson, is a supplier of protein packaging products to meat, cheese and dairy industries in Ireland. To Dec 2020, the business reported revenues of c. €14.2m and EBITDA of c. €1.3m.

Advisers: Euroflex received legal advice from Dillon Eustace, led by Lorcan Tiernan.

Renatus Comment: The private equity backed ProAmpac is reported to be looking at the Euroflex deal as a way to immediately improve its product range and get immediate access to a new market and customer set. The alternative of organic development of a new facility is slow doesn’t give the potential incremental earnings boost of strategic acquisitions.

Source: ProAmpac press release

Digitary merges with Parchment

Deal Details: Irish digital credentials expert Digitary has merged with US-based Parchment.

Digitary, founded in Dublin in 2005, develops web-based software that enables institutions to securely issue academic awards and other official documents online. Higher education providers use Digitary to eliminate credential fraud, improve service levels, and increase efficiencies.

Parchment is a leading platform for the secure issuing and exchange of academic credentials such as transcripts, diplomas, certifications, digital badges, graduation/degree verifications, and more.

Advisers: Paul Keenan & Alan Dunne of Capnua advised Digitary

Renatus Comment: Founded in 2005 by Andy Dowling and with ownership now including key employees, this looks to be an exciting next step for the team in Digitary. Combining with the US focused Parchment business will give the combined entity an expanded global reach from which to service its customers.

Source: Digitary press release

Smurfit Kappa acquires Verzuolo

 

Deal Details: Smurfit Kappa Group has acquired Italian containerboard business Verzuolo for a cash consideration of €360m from the Burgo Group.

Verzuolo is highly complementary to SKG’s existing business and is strategically positioned to serve both the Southern European region and other markets ensuring they continue to provide the best service to its corrugated customers.

The state of the art recycled containerboard facility with 600,000 tonne capacity is strategically located close to the port of Savona in the northwest of Italy.

Advisers: None mentioned.

Renatus Comment: This deal quickly follows on from Smurfit’s acquisition of Mexico-based Carton box earlier this month and further expands Smurfit’s production capacity in an industry that faced supply disruptions and shortages of packaging papers which has led to pressure in input costs.

Smurfit’s integrated business model has partially insulated it from these events and allowed it to keep continuity of supply to its customers. Markets have responded favourably to Smurfit’s recent activity with the share price rising by c. 67% in the last 12 months.

Source: Smurfit Kappa Group press release

SilverCloud Health is acquired by Amwell

Deal Details: Irish-founded mental health platform SilverCloud Health, along with Conversa Health, has been acquired by Amwell in a deal reported to be worth €270m.

Award-winning SilverCloud Health delivers a range of digital cognitive behavioral health programs that are evidence-based and clinically validated.

NY-based Conversa Health helps leading healthcare organizations to remotely manage and engage patients by delivering configurable, automated text-based conversations to support a wide range of clinical needs.

Amwell is a leading telehealth platform in the United States and globally, connecting and enabling providers, insurers, patients, and innovators to deliver greater access to more affordable, higher quality care.

Advisers: Barclays acted as exclusive financial advisor and Ropes & Gray LLP acted as legal counsel to Amwell on both transactions.

Cantor Fitzgerald & Co. Acted as exclusive financial advisor to Silver Cloud Health.

 

Renatus Comment: A spin-out from a collaborative project between the National Digital Research Centre (NDRC), Mater University Hospital and Trinity College Dublin, SilverCloud was founded by Ken Cahill (CEO), James Bligh (CTO), Karen Tierney (CPO), Dr. John Sharry (Clinical Director), and Dr. Gavin Doherty (UX Director) in 2012 after more than 10 years of advanced clinical and academic research. The business has gone on to raise c. €25m of funding since 2012 with investors including Dublin Business Innovation Centre, Investec Ventures, AIB Seed Capital Fund, ACT Venture Capital, Enterprise Ireland, among others. This exit looks to be a great success for all involved.

Source: Amwell press release

NFP Acquires Aiken Insurances

NFP acquires ReSure

Deal Details: International insurance broker and consultant NFP has acquired Aiken Insurances Limited. No deal terms were disclosed.

NFP is a global business with its HQ in the US and offices across North America and Europe, employing more than 6,000 people.

Founded in 1989 by the late Patrick Aiken, Dublin-based AIL is a retail and commercial insurance broker, with a strong reputation in the commercial risk field. The business was majority owned by Cara Aiken, with key management also having a shareholding.

Advisers: None mentioned.

Renatus Comment: The insurance space continues to be one of our most reported on sectors. With NFP’s entry into the Irish market and its stated intention to make further acquisitions in Ireland, we expect a lot more M&A activity in the sector.

Source: NFPpress release

CubeMatch acquires Bishopsgate

Deal Details: Irish-headquartered change management consultancy CubeMatch has acquired Bishopsgate Financial Consultancy for an undisclosed sum.

CubeMatch is a global change and transformation consultancy excelling in complex and highly regulated financial services environments.

London-headquartered Bishopsgate has a track record with leading international financial services organisations.

The combined business will have more than 250 employees, 40 customers and projected revenues of close to €30m as well as operations across Ireland, the UK, Amsterdam, Frankfurt, Singapore and Chennai.

Advisers: Kieran Regan of ReganWall advised CubeMatch on the acquisition.

Renatus Comment: Dublin-based CubeMatch was founded in 2002, CubeMatch is led by CEO Thomas Melville. This deal will give the business an immediate presence in the UK market and access to an existing client base on which it can build its UK business. In Renatus, we are speaking with a lot of Irish businesses about supporting them to acquire complementary businesses in the UK as part of their expansion plans.

Source: Thinkbusiness.ie

Brooklyn ImmunoTherapeutics acquires Novellus Therapeutics

Deal Details: NYSE-listed Brooklyn ImmunoTherapeutics, Inc. a biopharmaceutical company has completed its acquisition of Novellus Therapeutics Limited. Novellus develops next-generation engineered stem cell therapies. The deal is reported to have been for c. $125m.

dvisers: Philip Lee M&A, led by Andy McConnell provided legal advice to Novellus Therapeutics.

Renatus Comment: It is reported that the acquisition will advance Brooklyn’s evolution into a platform company with a pipeline of next-generation engineered cellular, gene editing and cytokine programs.

Source: Brooklyn ImmunoTherapeutics press release.

Deals Updates & Other News

Total Produce completes merger with Dole

 

Deal Details: The previously reported merger between Total Produce and Dole completed last week with its combined listing on the New York Stock Exchange. The combined business has a market cap of c. €1.12bn.

Source: Sunday Times

Aercap takeover of Gecas gets EU approval

 

Deal Details: Irish aviation group Aercap’s acquisition of GE Capital Aviation Services (Gecas) is approved by the European Commission.

The €25bn deal creates the world’s biggest aircraft lessor with a fleet of more than 2,000 planes, 300 helicopters and 900 engines and it will have an order book of 500 aircraft.

Source: Irish Times

COMPANY PERFORMANCE

EBITDA  is an accounting term and is often the best indicator of profitability in non-capital intensive businesses before financing and tax are considered. In capital-intensive businesses EBIT or EBITDA less average Capital Expenditure are often better measures. YoY is an acronym for the year-on-year movement in turnover, EBITDA, etc.

Independent Irish Health Foods Ltd. has been in business since May 2008. Based in the West Cork Gaeltacht area of Baile Mhúirne, the business operates from a 24k sq. ft. warehouse, and stocks over 12,000 lines across prepacks, chilled, frozen, ambient (food and drinks), supplements, body care, household, gifts, lifestyle accessories and baby.

In a positive financial year, the business reported revenue of c. €23.4m (up 6.6% YoY) and EBITDA of c. €1.1m (up 8.7% YoY). EBITDA converted to a net cash increase of c. €867k to leave an ending balance of c. €2.7m.

Independent Irish Health Foods Ltd is owned by Southwestern Star Ltd which is in turn owned by Richard Wilkins and Henry Barlett. The business employed an average of 103 people at a cost of c. €3.8m during the year.

RECENT FUNDRAISINGS

Who: Limerick-based mineral refinery Aughinish Alumina has been granted funding.

What: The undisclosed amount was granted by the EU.

Why: Funding was given to reduce its carbon footprint.

Source: Independent ​​​​​​

Who: Luna Connect, a digital lending software platform with a target market of smaller financial institutions. The business was founded in 2017 by Brian D’Arcy.

What: The business has raised €800,000 of seed funding, with backers including Enterprise Ireland and NDRC Portershed.

Why: Continued development of the business.

Source: Business Post

Who: Finbourne, an Irish-led and co-founded data integration and management platform for investment firms. Founded in 2016 by a team of former UBS and Nomura bankers, including Irish men Tom McHugh (CEO) and Dermot Shortt (Chairman).

What: The business has raised £15m in a series A funding round.

Why: Continued development of the business.

Source: Sunday Independent

Who: Payzaar, a payroll management platform for companies with global workforces. Founded in 2016 by Marc-Olivier Fiedler and Trevor Townsend.

What:  The business has raised a €2m funding round. Backers include Cord-based Domino’s Pizza franchisee Cathal McDonnell, David Lawrence of Pegasus corporate finance, and Oliver Samwer, the German billionaire founder of Rocket Internet.

Why: Continued development of the business.

Source: Sunday Times

Who: Coindrum, a hardware solution for airports that allows travellers to convert local currency coins into vouchers for a 10 per cent higher amount. Founded by Lukas Decker.

What:  It is reported that Suretank entrepreneur Patrick Joy has invested in the business. Irelandia’s Declan Ryan is also a backer.

Why: Not reported.

Source: Sunday Times

Who: Hosted Kitchens, a virtual restaurant business founded in late 2020 by Sean Murray.

What:  The business has raised a €1.25m seed round from a number of private investors.

Why: The funding will be used to set up additional kitchens and bring headcount up to 20 this year.

Source: Business Post

EXECUTIVE AND BOARD APPOINTMENTS

We in Renatus believe that more important than the deals are the people and we have teamed up with leaders in this field Korn Ferry to provide you with details of key recent executive and board level appointments.


Tom Lynch

Source:
(Google Images & LinkedIn)


Lorcan Tiernan

Source:
(Google Images & LinkedIn)


Sally Ann Gannon

Source:
(Google Images & LinkedIn)


Anne Sheehan

Source:
(Google Images & LinkedIn)

THOUGHT OF THE WEEK

Data is emerging showing the real effect of covid on patterns. Fitzgerald Power have collated an interesting array of stats; the one that stuck out for me was the google mobility tracking of footfall the western cities being almost flat and Dublin being down 23% in Q2 2021.

There have been fortunes spent over the years on failed decentralisation plans and covid has delivered it, albeit inadvertently. It will be very interesting to review this again in Q4 this year and how much of this sustains into 2022.

The Q2 report is attached here with the various snapshot stats.

@RenatusCapital Tweets

45.4% 52.5%

The YoY rise in Irish mortgage drawdowns volume and value, respectively, for Q2 2021 amounting to 9,625 mortgages to the value of €2.23bn. Q2 2020 was the beginning of the Covid pandemic. @IrishTimesBiz

10.6% &13.9%

The year-on-year increase in the Irish retail sales volume and value indices, respectively, for June 2021. The most notable changes were in Bars (+184%) and Books, Newspapers & Stationery (+46.8%), according to @CSOIreland

13.4%

The increase in the Irish retail sales volume for June 2021 vs pre-covid June 2019 with the most significant changes in Bars (-48%) and Other Retail Sales (+33.8%), according to @CSOIreland

180% & 105%

The year-on-year increase in the Irish overseas arrivals and departures, respectively, for June 2021 amounting to 160K arrivals and 199K departures. When compared against pre-covid June 2019 the respective figures were 92% & 90% lower. @CSOIreland

55.5%

The year-on-year increase in the Irish residential property completions for Q2 2021 amounting to 5,021 completions across all dwelling types (single, scheme, apartments), according to @CSOIreland

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ABOUT RENATUS

Renatus was established in 2014 to provide growth funding to growing Irish SMEs and to partner with ambitious management teams to help companies reach their full potential.

Renatus targets companies with sustainable earnings of €1m+ and valuations typically in the range of €5m – €20m. Our typical solutions include:

  • Succession planning
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  • Growth financing – both organic and acquisition growth financing
  • Full and partial share sale.
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    • Adrian joined Renatus in 2018, initially as a Marketing Executive before moving into the role of Digital Marketing Associate. As part of his role, Adrian manages all the digital marketing aspects of Renatus as well as conducting digital research for portfolio companies.
    • Adrian holds with a BBS degree in Marketing and Entrepreneurship from the University of Limerick, as well as a Postgraduate degree from The Digital Marketing Institute.
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    • Tiernan recently joined Renatus Capital Partners as a Private Equity Associate. As part of his role, he researches and analyses the potential of new investments and acquisitions
    • Tiernan graduated with a B.Sc in business and law from DIT Aungier street & an MSc. in Entrepreneurship from Trinity College Dublin.
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    • Tiernan is also in the process of sitting ACCA exams.
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      • Bronagh recently joined Renatus as a Private Equity Associate. As part of her role, she will be researching and executing investment opportunities.
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      • Prior to joining Renatus, Bronagh worked as an Investment Banking Analyst in Rubicon Capital Advisors where she worked on M&A transactions on the execution side and financial modelling in the infrastructure sector. She also worked as an Investment Associate in River and Mercantile Solutions in London quantitatively screening different investment opportunities across all asset classes.
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    Alan Manning, Associate

    • Alan joined Renatus Capital Partners in September 2021 as a Private Equity Associate. As part of his role, Alan researches and analyses potential investments and acquisitions.
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    • Previously working in KPMG’s Consulting division, with the Financial Management Consulting team. During his time there he was engaged on a Finance Function Review for a European Travel Technology firm, and a review of the cash management strategy of an Irish Commercial Bank.
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    Conor Hall, Associate

    • Conor joined Renatus Capital Partners in June 2018 as a Private Equity Associate. As part of his role, Conor researches and analyses potential investments and acquisitions.
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    • Prior to joining Renatus, Conor worked as an Analytics Analyst with Accenture, specialising in predictive modelling for fraud.

    Kyle Barry, Associate

    • Kyle joined Renatus Capital Partners in June 2016 as a Private Equity Associate. As part of Kyle’s role, he researches and analyses the potential of new investments and acquisitions.
    • Since joining, Kyle has worked on numerous transactions, including Simtech and Rennicks, and has worked with Renatus’ investee companies on a number of strategic projects.
    • Kyle holds an MSc. in Quantitative Finance (University College Dublin) and a BA Finance (Maynooth University). Currently, Kyle is in the process of completing the ACCA qualification.
    • Prior to joining Renatus, Kyle spent 15 months in Intel’s Finance department where he worked across the financial reporting, tax and capital financing teams.

    Philip Gardiner, Associate Director

    • Philip is an Associate Director with Renatus Capital Partners, having first joined the firm as its first employee in 2014.
    • Philip has responsibility for screening, assessment and structuring of new acquisitions.
    • He has worked on a number of transactions at Renatus including Boojum Mexican Restaurants and Simtech Aviation. Philip works actively with the boards of Boojum and Simtech Aviation.
    • Prior to joining Renatus, Philip spent four years in AIB’s corporate banking team where he worked on a mix of real estate and cash flow lending deals.
    • Philip is a member of the ACCA and holds an MSc. in Financial Services and a Bachelor in Business Studies, both from the University of Limerick.

    Jane Martin, Marketing and Administration Manager

    • Jane joined Renatus Capital Partners in June 2019 as a Marketing and Administration Manager. As part of Jane’s role, she writes the weekly newsletter, works on the CRM and looks after the admin and ad hoc tasks
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    Mark Flood, Director

    • Mark co-founded Renatus with Brendan Traynor in 2014. Prior to establishing Renatus, Mark spent seven years on the senior management team of the Racing Post in various operational and commercial roles. Before founding Renatus, Mark was Managing Director of the Racing Post’s Irish operation.
    • Prior to his career in the Racing Post, Mark was the first employee of FL Partners, an Irish based international private equity firm, where he was actively involved in over €300m worth of transactions.
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    • Mark is a Chartered Accountant and holds a Bachelor of Commerce and Masters in Accounting from NUI Galway.

    Brendan Traynor, Director

    • Brendan is a co-founder of Renatus. Prior to establishing Renatus, he was a Director in BDO Corporate Finance specialising in M&A, MBO’s/MBI’s, debt and private equity fundraising across a diverse range of sectors and clients.
    • His career focus and passion is the Irish SME sector and his deal expertise covers sectors such as retail, manufacturing, FMCG, healthcare, avaiation, media, medical devices, food and agriculture, construction, and hotels and leisure.
    • Brendan is a Chartered Accountant and holds a Bachelor of Commerce from University College Dublin

    Conor Mehigan, Associate Director

    • Conor joined Renatus Capital Partners in 2021 as an Associate Director. Conor has responsibility for screening, assessment and structuring of new investments and acquisitions.
    • Prior to joining Renatus, Conor spent five years in IBI Corporate Finance specialising in M&A, debt and private equity fundraising for private and public companies across a range of sectors. Prior to his career in IBI Corporate Finance, Conor spent four years in Deloitte’s Corporate Finance Division, specialising in Transaction Services
    • Conor is a Chartered Accountant and holds a BSc in Finance from University College Cork

    Greg Dilger, Strategic Advisor

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    • He is an investor and advisor to Renatus and brings years of relevant experience to our team.
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    Patrick Dooley, Associate Director

    • Patrick joined Renatus in November 2022 as an Associate Director. Patrick has responsibility for screening, assessment and structuring of new investments and acquisitions.
    • Patrick previously held leading positions in Focus Capital Partners, PKF O’​Connor, Leddy & Holmes & EY.
    • Patrick is a charted accountant and holds a Bachelor of Accounting and Finance degree from DCU, along with a Masters degree in Accounting from TUD.

    John Dwyer, Chairman

    • John joined Renatus in 2018 as a Chairman. Prior to Renatus, John spent 30 years at PwC in the UK, 20 years as a Partner, John led the UK and Global Deals business at PwC and was an executive board member of the UK firm.
    • Prior to that, John led the UK and Global Private Equity business at PwC and worked with firms including 3i Group, Apax Partners, CVC Capital Partners and Cinven.
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    • John is a Chartered Accountant and holds a Bachelor of Commerce from UCD.