Renatus’ Weekly M&A Newsletter – 22/09/2019
September 22, 2019Renatus’ Weekly M&A Newsletter – 29/09/2019
September 29, 2019
Renatus Weekly M&A & Company Performance Newsletter 01/09/2019
Dear Reader,
You are receiving this mail every week as we see you as a key partner and we look forward to continuing to enjoy our journey with you over the decades ahead.
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
The Real Deal 2019
The Real Deal 2019 will take place in Goffs, Co. Kildare on October 10th.
We will be partnering with Fitzgerald Power, Bank of Ireland, ByrneWallace and The Sunday Times to bring you Ireland’s premier SME event.
Following on from 2018’s inaugural edition, where we welcomed a full house of 800+ attendees, we will once again bring together some of Ireland’s most prominent business leaders, SME owners, managers and advisors for an unrivalled day of networking and knowledge sharing.
There will be four discussions on the day: People and Culture, Transformational Growth, Deals of the Year and a Legend of Business Interview, each moderated by Matt Cooper.
Speaker Announcement
We have four speakers announced and will be announcing more over the coming weeks.
David McKernan will be joining the Deals of the Year panel after Java Republic’s sale of a stake to Cafento. David’s career is an inspirational story of vision and persistence. Having joined Bewley’s as a teenager, he left to set up Java Republic to deliver quality coffee to the world. Through drive and competitiveness, David turned his passion and vision into one of Ireland’s most recognisable food and beverage brands over a 20-year spell. The partnership with Cafento merely marks the beginning of the next chapter for David and Java as they eye international expansion.
Nikki Evans will also be joining the Deals of the Year panel. Nikki is the founder and CEO of PerfectCard, a Wicklow-based fintech business specialising in prepaid cards, which sold a majority stake during 2019 to EML Payments, an Australian Plc. A classic entrepreneurial story, she identified a market need, seized the opportunity, backed her vision and took the risk. Nikki spotted the value in obtaining an e-money licence, an untapped market in Ireland at the time, and manged to convince MasterCard to bring the start-up on to their platform. Today, PerfectCard is expanding into Galway and is to become EML’s global hub for technology and innovation.
Bobby Healy will be speaking on the topic of Transformational Growth where he will discuss both personal and corporate experience and stories through his time growing CarTrawler to be one of the world’s leading B2B travel technology platforms and one of the Ireland’s greatest SME success stories, along with his more recent Manna endeavours.
As CEO of Ireland’s largest media company, Alan Cox will be speaking around the importance of People and Culture while growing a business. Along with Core being voted Agency Network of the Year for the last six consecutive years, the company was also recently voted one of the top workplaces in Ireland by the Great Place to Work Institute for the tenth year running. Alan was recognised as Ireland’s most trusted leader in 2017.
To get your ticket, simply register on The Real Deal Website .
For more information about the event please go to www.therealdeal2019.ie. Th
We hope to see you on the day!
M&A ACTIVITY
Irish Life to acquire Acumen & Trust
Deal Details: Irish Life Group Limited will acquire Acumen & Trust through its independent intermediary subsidiary, Invesco Limited. Terms of the transaction were not disclosed.
Acumen & Trust, based in Sandyford, specialises in corporate pensions consultancy and private wealth management and has over 22 years’ experience advising both companies and personal investors. It employs 54 people and has €1.1 billion in assets under administration.
Acumen & Trust will continue to operate as an independent consultancy firm.
Advisers: Dillon Eustace team led by Lorcan Tiernan, Partner and Head of Corporate M&A, Andrew Bates Partner and Head of Financial Services and Philip Lea, Senior Associate provided Acumen & Trust with legal advice.
Renatus Comment:
Pensions/wealth management has been a hot area this year with Irish Life having bought Invesco, SSAS Solutions was acquired by Mattioli Woods, St James Place acquired Harvest and Tilman Brewin acquired Investec’s wealth management business. There have been a plethora of Insurance deals also which has led to the Financial Services space being one of the more active M&A sectors.
Source: Acumen & Trust
Castlehaven Finance switches backer
Deal Details: Global investment firm Avenue Capital Group has acquired Pollen Street Capital’s interest in Castlehaven Finance for an amount in excess of €250m.
Castlehaven Finance was founded in 2014 and has offices in Dublin and Cork. Castlehaven has thus far funded the start of 3,500 new Irish homes, in 118 projects, lending €584m to date, with c.€385m of that through its link with Pollen Capital.
Avenue Capital Group, founded in 1995, is a New York-based global investment firm which manages assets of $10.3bn (€9.3bn) for institutional investors, pension funds, family offices, sovereign wealth funds and foundations.
The deal will see Avenue Capital commit €500m per annum in lending over the next four years to the Irish entity Castlehaven Finance.
Advisers: None mentioned
Renatus Comment:
Pollen Street Capital have been active in Ireland via Capital flow and the Underwriting Exchange. They are also investors in the global moneycorp foreign exchange group who have a big presence in Ireland. By virtue of their timing it is fair to assume they made a tidy profit on their investment in Castlehaven.
Source: Avenue Capital Group Press Release
Glasson Country House Hotel & Golf Club acquired by Oakmount
Deal Details: Developer Paddy McKillen jnr’s Oakmount has acquired the four-star Glasson Country House Hotel & Golf Club in Athlone, Co Westmeath, for about €9m.
The hospitality wing of McKillen’s business, Press Up Entertainment will take over responsibility for the day-to-day running of the hotel and golf club from its original owners, the Reid family.
Glasson Country House Hotel was established in 1993 by local farmer Tom Reid and his wife, Breda, when they converted their 1780 period home into a club house and established Glasson Golf & Country Club on its surrounding lands and farmland.
McKillen jnr’s acquisition of the 175-acre Westmeath hotel and golf resort represents Oakmount and Press Up Entertainment’s fourth venture beyond Dublin.
Advisers: None mentioned
Renatus Comment:
The majority of Press Up group’s venues are Dublin venues. This seems the first foray outside Dublin. It is a good way to start as it is a quality asset.
Source: Irish Times
Beannchor Group set to acquire Park Avenue Hotel
Deal Details: Bill Wolsey’s Beannchor Group is reportedly set to acquire four-star Park Avenue Hotel. Park Avenue is a 56-bed hotel based in Belfast and has been operating under a Company Voluntary Arrangement (CVA) since October 2016. Post-transaction Beannchor is expected to invest heavily in the property.
Beannchor operates the Merchant and Bullitt Hotels in Belfast, amongst other hotels and hospitality venues.
Advisers: None mentoned
Renatus Comment: Beannchor operates more than 40 hotels/pubs as well as the Little Wing Pizzeria chain of restaurants. The latest set of accounts for Beannchor No. 1 Limited are for the period ending June’18 and show that revenue grew by nearly 10% to £25.8m while operating profits nearly doubled from £5.7m to £11.2m.
Source: Belfast Telegraph
Deals in the Making
EP UK Investments Ltd to acquire Tynagh Energy Ltd
Deal Details:The proposed acquisition by EP UK Investments Limited of sole control of Tynagh Energy Limited has been notified to the Competition and Consumer Protection Commission. The financial details of the deal have not been disclosed.
EP UK Investments Limited is a wholly-owned subsidiary of EPH, a Czech Republic based energy group active in the energy sector.
Tynagh Energy Limited is an Irish-incorporated company which operates a 400-megawatt Combined Cycle Gas Turbine electricity power plant at Derryfench, Tynagh, Co. Galway.
Source: CCPC
Deal Updates
Davy emerges as potential acquirer of Goodbody
Deal Details: Davy Stockbrokers has emerged as one of the final three bidders for Goodbody Stockbrokers. The other two bidders are reported to be Irish Life and another “very well-capitalised, large financial institution” from China.
Goodbody is expected to attract bids of over €100m but below the €150m originally offered by Zhongze, the Beijing-based investor that was reported to be acquiring Goodbody earlier in the year. The deal is said to have collapsed after protracted talks with the Central Bank of Ireland.
Source: Sunday Times
EXECUTIVE & 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 details of key recent executive and board level appointments
Patrick Finnegan appointed as CEO of Motors Distributors Limited
Motors Distributors Limited, an importer and distributor of Mercedes-Benz passenger cars, light and heavy commercial vehicles, has announced the appointment of Patrick Finnegan as the new chief executive. A member of the Institute of Bankers, Finnegan joins the motor industry having held senior management positions in the finance insurance and security sectors.
Ryanair appoints new CEO of its largest division.
Ryanair has announced that its Chief People Officer, Eddie Wilson, is to assume the role of CEO of Ryanair DAC from September 1st. Mr Wilson joined the company over 2 decades ago and was promoted through the HR ranks steadily over the years. Mr Wilson previously worked at Gateway as HR Director. Ryanair DAC, is the biggest constituent airline of Ryanair Holdings.
ERM appoints new Safety & Risk Services Partner
ERM, a leading global provider of environmental, health & safety, risk and sustainability related services has appointed Peter Gordon as a Safety & Risk Services Partner in Ireland. Mr Gordon has spent the past 18 years working in Europe, North America, the Middle East and South East Asia where he’s advised leadership teams of multiple blue chip firms on complex safety and change programmes focusing on Safety Leadership, Operations and Performance Improvement. Mr Gordon will support clients in the Oil & Gas, Technology and Construction & Infrastructure industries on their critical Leadership, Safety Leadership & Culture challenges.
Glenveagh appoints new CEO and new board directors
Irish listed homebuilder, Glenveagh Properties, has announced that Justin Bickle is standing down as CEO and Director of the company. Mr Bickle is returning to live in the UK having spent much of the last decade living in Ireland. Glenveagh has announced that current chief operating officer, Stephen Garvey, will be taking over as CEO. Dalata Hotels Group plc CEO Pat McCann has been appointed as non-executive director of the board of Glenveagh Properties PLC, with effect from the 1st September.
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.
Based in Clonmel, Co. Tipperary, Star Fuels and Farm Supplies Limited is a seller of farm supplies, including fertiliser, feed, oil and coal. Despite a c.19% rise in turnover to just under €20m, EBITDA declined by c. 47% to €850k from €1.6m a year earlier. The main driver of the decline was a c.6 percentage point deterioration in gross margin to c. 0.7%. The company employs 18 staff at an annual cost of €670k. During FY18, the company spent €1.5m on a “fundamental reorganisation” of the business. €200k was spent on CapEx during the period which was more than offset by a c. €350k cash inflow from fixed asset disposals. There is a nominal amount of debt obligations on the business at c. €113k with just over half of it relating to finance leases. Cash declined by c. €790k for the period to a closing balance of c. €102k, the decline was mainly due to the one-off “fundamental reorganisation”. The business is owned equally by Nora and Patrick Myers.
Established in 1987, Cirrus Limited is a family-owned Northern Irish manufacturer of polythene film and bags for the food industry. FY18 was a good trading year for the company with sales growing by c. 10% to £15.5m and EBITDA growing by c.28% to £1.8m. EBITDA outperformance can be traced to a two percentage point increase in gross margins to c. 18%. Cirrus generates c.57% of its revenue in the UK with the balance coming from Europe. This is a capital intensive business with just under £2m being spent on CapEx over the last two fiscal periods, c.£1.2m of which was spent on plant and machinery and c. £660k spent on freehold property. The only observable loan on the balance sheet would appear to be a c. £500k loan which is offset by a closing cash position of £343k. The company is owned by Joseph (60%), Edna (33.3%) and Steward (6.7%) Doak.
Based in Rathcoole, Co. Dublin, Anixter is a distributor of network & security solutions, electric & electronic solutions and utility power solutions. Despite an 8% decline in turnover to c. €30m in FY18, EBITDA increased by c. 3% to €1.1m. EBITDA growth can be traced to (1) a €1m decline in distribution costs and (2) a halving of administrative costs during the period. C.84% of turnover originates from the UK with the remainder coming from the rest of Europe. The group employs 20 staff at an annual cost of €2.05m, equating to an average cost per staff member of just over €100k. There is €17k of cash on the balance sheet at the period end as well as a c. €660k intercompany loan and a c. €3.9m pension liability from a deficit in its defined benefit scheme. The company is a wholly owned subsidiary of Anixter International Inc, a US incorporated company.
RECENT FUNDRAISINGS
Who: Skellig six18, a micro-distillery on the Skellig Coast of Co Kerry, has received funding.
What: A new €10m micro distillery; financial backers include the head of Davy’s private client division, Patrick Cooney
Why: The funds will also be used towards opening a gin school, an interim visitor centre and a bottling plant before the end of the year. There are also plans to have a two-tonne whiskey distillery operational by the end of next year with its own stock available from Christmas 2024.
Source: Irish Times
Who: Propeller Shannon 2019, a programme to support new aerospace businesses, has received funding.
What: €2m has been backed by the IAA, Boeing, Shannon Group’s International Aviation Services Centre, Enterprise Ireland and Dublin City University.
Why: The fund is to support 12 air travel start-ups which were chosen from 200 applicants from 40 countries.
Source: Irish Times
Who: Consider, a new email client designed to enable focus and flow and make emailing more collaborative. Consider is led by Ben Mc Redmond, the son of An Post boss David Mc Redmond.
What: Kleiner Perkins, a Silicon Valley-based venture capital firm is reported to have led a $5m funding round in the business.
Source: Sunday Times
Who: Ambisense, a DCU spin-off that makes next generation sensor technologies for the environmental monitoring sector. The company was established in 2014 by CEO Stephen McNulty and co-founders Fiachra Collins and Dermot Diamond.
What: The company has raised €1.1m in funding from investors including Atlantic Bridge, Suir Valley Ventures and Enterprise Ireland.
Source: Sunday Business Post
Brexit movement in the Week
Instead of ‘Thought for the Week’, we are bringing you a weekly tracker using odds from oddschecker and taking off bookmakers margin to come up with deemed percentage probability of outcomes.
The current markets read as follows:
Some Sort of Brexit by Christmas – 59% chance (56% last week)
No deal Brexit – (6/5) 43% chance (41% last week)
Odds of What the Next Step Will Be:
General Election – 29% (from 42% last week)
Exit Without an Agreement- i.e. no deal Brexit – 27% (from 22% last week)
Article 51 Extended beyond October 31st – 22% (from 14%)
UK leave with a revised agreement 11% (from 9%)
All other next steps are sub 10% deemed probability.
If you are not in agreement with any of above you can get the odds here and back your opinion: Oddschecker – Brexit
@RenatusCapital Tweets
2%
The year-on-year increase in national employment for Q2 2019 increasing the number of people employed by 45,000 to 2,300,000.
@CSOIreland
2.5%
The inflation rate of grocery items in Irish supermarkets in the 12 weeks to August 11, according to Kantar survey.
@irishexaminer
3.5%
The year-on-year increase in national average weekly earnings for Q2 2019 bringing the average income to €771.12 per week
@CSOIreland
4.3%
The decrease in both value and volume of retail sales in July 2019 vs June 2019 with the largest monthly volume decrease being in the motor trade at -13%
@CSOIreland
€1.162bn
The value of new mortgage approvals for July 2019, accounting for over 5100 new loans according to Banking and Payments Federation Ireland. It is the first time since the group started collecting data in 2011 that the figure has breached €1bn.
@IrishTimesBiz
2.8%
The year-on-year increase in total number of overseas trips for July 2019 including Irish residents’ trips overseas plus travel to Ireland amounting to 2,124,000 trips.
@CSOIreland
2.8%
The year-on-year increase in road freight tonnage for Q1 2019 amounting to 36.6 million tonnes.
@CSOIreland
ABOUT RENATUS
Renatus was established in 2014 by Mark Flood and Brendan Traynor 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 of €5m and above. Our typical solutions include:
- Succession Planning
- Management Buyouts / Buy-Ins
- Funding for organic growth
- Acquisition Funding; and
- Share Sales
OUR INVESTMENTS
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Renatus’ Knowledge Centre
Our Knowledge Centre is filled with insights from some of Ireland’s top business leaders on Succession Planning, Management Buyouts / Buy-Ins, Growth Financing and much more.
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