Renatus’ Weekly M&A Newsletter – 25/04/2021
April 25, 2021Renatus’ Weekly M&A Newsletter – 04/04/2021
April 4, 2021
Renatus Weekly M&A & Company Performance Newsletter 02/05/2021
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
RENATUS WELCOMES BARRY MARRON
We are delighted to welcome Barry Marron to the team of our partner business Rennicks as its new CEO. Barry will succeed Mike Flanagan, who will move to chairperson of the business having joined the business 35 years ago and has been CEO for the past 25 years. Barry’s new role is included in our appointments section below.
Barry is a Senior executive with an MBA and 20-years of leadership and business development experience. Immediately prior to joining Rennicks, Barry was MD for 3 operating plants of Essentra Plc in Ireland. We count ourselves lucky to have partnered with Barry to drive on the business.
M&A ACTIVITY
TDS is acquired by ACRE
Deal Details: Dublin-based Time Data Security (TDS) has been acquired by ACRE for an undisclosed sum.
TDS, founded by which Frank Hart in 1990, is a leading provider of smart work-place products including visitor management, life safety and access control software solutions. TDS has over 30 years’ experience supporting clients with 3000+ sites and over 25 million users worldwide.
ACRE, backed by private equity firm Triton Partners, is a global leader in the delivery of integrated technologies and services. ACRE employs over 400 employees in more than 25 countries.
TDS was owned by Frank Hart (CEO) and board member Sean Murphy. In 2019, its last set of published accounts, the business reported revenue of €18.1m (40% of which was SaaS revenue) and EBITDA of €2.1m. It is reported that Hart has reinvested into ACRE as part of the deal.
Advisers: A&L Goodbody team, led by corporate and M&A partner Darran Nangle alongside Richard Marron, Phil Fogarty, Philip McQueston, Kathleen McConchie, Kate Gallagher and Barry O’Fiacháin advised the shareholders of TDS.
PwC (Mark McEnroe, Laura Gilbride and Killian Noone) advised the sellers.
White & Case acted for ACRE, assisted by Mason Hayes & Curran on Irish aspects.
Renatus Comment: This ACRE’s first acquisition since taking in investment from Triton in March 2021 and continues the “buy-and-build” growth strategy it had been pursing before Triton’s investment. The deal crystalises a super success story for the Irish founders of TDS and provides a new platform of growth for the TDS team.
Source: Triton Press Release
Stripe acquires TaxJar
Deal Details: Stripe has entered into an agreement to acquire TaxJar, a leading provider of sales tax software for internet businesses.
Financial details of the deal have not been disclosed, but TaxJar was reported to be valued at $179m (€148m) in 2019 after a $60m fundraise, according to Pitchbook.
US-based TaxJar, founded in 2013, is a developer of a cloud-based sales tax automation platform designed to manage tax easily.
Alongside Stripe Billing, Stripe Radar, and more, TaxJar will become a key offering of Stripe’s revenue platform—helping internet businesses sell worldwide with minimal complexity.
As part of the acquisition, the entire TaxJar team of 200 employees will be joining Stripe.
Advisers: None mentioned.
Renatus Comment: Stripe looks to be stepping up its M&A activity and is becoming a serial guest on our newsletter. Using an acquisition strategy as a means to rapidly enhance its product offering looks clever, once integrated successfully. Trying to get there organically can take a lot more time, money and less success. We are speaking with several companies about helping them find and fund such strategic acquisitions, in particular market leaders in Ireland looking at acquisitions across the Irish Sea and beyond.
Source: Stripe Press Release
ECI acquires stake in Acutrace
Deal Details: ECI Energy has acquired a 35% equity stake in Acutrace. The financial details of the deal were not disclosed.
Acutrace is a software and systems integration company helping organisations to measure and control their energy costs and meet their CSR and sustainability targets.
ECI Energy is an energy services and technology business. It offers customers ‘Lighting as a Service’ (LaaS) retrofits, EV Charging as a Service and Solar PV as a Service all of which are fully funded, installed and maintained by the company.
ECI Group is ultimately owned by Declan Hanratty, Gary Dwyer and Karen Hanratty.
Advisers: Alan Kelly of Focus Consulting provided corporate finance advice in the and Patrick O’Shea of Wallace Corporate Counsel provided legal advice.
Renatus Comment: A key pillar in Ireland’s commitments under its 2019 Climate Action Plan (“CAP”) is the need to improve the energy efficiency of buildings by meeting higher energy performance standards. To meet our targets under CAP, we need continued investment and innovation by companies bringing solutions into the space. This looks like a smart move by ECI, enhancing their servicing offering and capabilities.
Source: ECI Energy Press Release
Hikari acquires ProcessUs
Deal Details: Irish data analytics company Hikari has acquired Dublin-based start-up ProcessUs for an undisclosed amount.
ProcessUs enhances the business performance of its clients by increasing process efficiency, providing data-driven process assessment and optimisation, and designing bespoke process-led solutions using the Microsoft Power Platform.
Hikari, founded in 2018, is a Microsoft Gold Partner in data analytics. It analyses a company’s data to provide insights and helps businesses to use their data better when making decisions. Hikari is owned by Eamon Moore, Denise Bray and Vali Abdykarim.
Advisers: This acquisition was completed with advice from OBH Solicitors and BDO.
Renatus Comment: Looks to be a nice complementary deal for Hikari, building out their capabilities for their customers. Harnessed in the right way, data analytics can be a powerful source of high-quality info to improve performance.
Source: Hikari
OTHER NEWS
New Zealand-based company relocates to Dublin
Deal Details: Robotic inspection company Invert Robotics is relocating its global HQ to Dublin following a recent €3.5m funding round from backers that include ISIF-backed Finistere Ventures.
The New Zealand-founded company has offices in the Netherlands, Australia, France, Germany and the US.
Robotic Inspection chose Ireland for its new headquarters because of its highly skilled talent pool, access to European funding opportunities and enterprise links with the US.
It will create an R&D team in Ireland and hire 25 new staff over the next three years.
Source: Irish Times
Joe Walsh Tours has ceased trading
Well known tour operator Joe Walsh Tours has ceased trading after 60 years in business. The company offered mainstream holidays, sports and religious tours. It is reported that the closure of the business is covid related. More travel agents will face trading pressures if the Government does not continue Covid supports into next year, the Irish Travel Agents Association (ITAA) has warned.
Source: Irish Examiner
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
CP Animal Feeds Limited, trading as Masons Animal Feeds, is a Northern Irish manufacturer of feeds for dairy cows, beef cattle, sheep and pigs.
For the period ending October FY20, the business saw a c. 3.5% increase in revenue to £28.8m and a c. 13.3% decline in EBITDA to c. £2.0m.
Cash increased by c. £317k during the period to end at c. £1.8m. The biggest drains on cash were a c. £1.26m investment into working capital and a capital expenditure spend of £1.3m. These were partially offset by new loans drawn of £1.25m.
The business employed an average of 39 people for the year at a cost of c. £1.4m. The business is owned equally by Colin and Grace Purdy.
Based in Dublin, Des Kelly Interiors is a carpet and furniture retailer with 11 stores across Dublin and Kildare as well as a collection point for online sales.
In its latest fiscal year, the company saw revenue decline by c. 16% to c. €13.5m while EBITDA decreased by 3.4% to c. €1.2m.
Net cash increased by c. €1.9m during the year to end at c. €2.5m. During the year, the business received c. €2.9m of proceeds relating to the sale of freehold property. The majority of the €1.9m CapEx that occured during the period was also on freehold property additions.
The company employed an average of 70 staff during the year at a cost of c. €3.2m. Des Kelly Interiors is wholly owned by members of the Kelly family.
RECENT FUNDRAISINGS
Who: Irish drone delivery start-up Manna, founded in 2018 by entrepreneur Bobby Healy, has secured investment.
What: $25m (€20.7m) Series A funding round was led by Dublin and London-based venture capital firm Draper Esprit with participation from DST Global and Team Europe, which was founded by Lukasz Gawoski, chief executive of German-headquartered takeaway service provider, Delivery Hero. Existing investors Dynamo Ventures, Atlantic Bridge and Elkstone were also involved.
Why: The investment will be used for major expansion to multiple markets by 2023.
Source: Irish Times
Who: Irish leisure brand Gym + Coffee has raised new funding.
What: The business has taken in new investment from singer Niall Horan, who will also join the business as an adviser.
Advisers: Gym + Coffee received financial advice from Martin Black of BKK. Brendan O’Brien of Walkers acted for Niall Horan on his investment.
Why: Horan joins with the aim to support the business and grow its international appeal.
Source: Irish Examiner
Who: Yatta, A new white label financial management app for consumers founded in April 2020 by Alan Quinlan, Colm McLoughlin and Johnny Kane.
What: The business has raised €1.1m in early stage funding.
Advisers: The company received financial advice from Stuart Fitzgerald of Fitzgerald Power.
Why: Continued development of the platform and business.
Source: Business Post
Who: Irish buildings tech company Integrated Facilities Solutions (IFS), founded by Kieran Beggan and George Harold, secured investment.
What: €2m was secured through the Davy EIIS fund, a joint venture between BDO and Davy, which allows small investors to claim tax relief on investments in emerging companies. This is in addition to funding secured from a Bank of Ireland SBCI loan scheme and Enterprise Ireland.
Advisers: An LK Shields team comprised of Emmet Scully (Partner), Lester Sosa-Villatoro (Associate), Ciara Doris (Associate), acted for IFS in the fundraising. James Doody of IBI provided corporate finance support.
Why: IFS aims to double revenue and headcount this year with plans to continue to grow the business into several new markets in the US and Europe in the coming years.
Source: Irish Times
Who: Ecocem Materials, an Irish company founded by Donal O’Rian that makes low carbon cement.
What: The business raised €22.5m in funding from Breakthrough Energy Ventures, a fund founded by Bill Gates and backed by businessmen Jeff Bezos, Jack Ma and Richard Branson. Dermot Desmond is also a backer of the business.
Why: Continued development of the business.
Source: Sunday Times
Who: My Money Jar, an Irish fintech startup building a platform to improve people’s relationship with money and reduce financial stress by helping customers manage their money more effectively.
What: The business has raised new funding from investors including former Davy CEO Tony Garry, Davy execs David Smith, Paul Burke, and Roc Mehigan, among others. Kellysan, the family office for Kentz co-founder Noel Kelly, has also invested into the startup.
Why: Not specifically mentioned, but expect it will be for the continued development of the business.
Source: Sunday Times
Who: Irish entrepreneur Sharon Keegan, founder and CEO of athleisure brand Peachylean, secures investment from the British Dragons.
What: £100,000 (€115,137) was offered by three Dragons – Touker Suleyman, Sarah Davies and Tej Lalvani – in return for a 30% stake. Peachylean, founded in 2018, previously secured €250,000 from Enterprise Ireland.
Why: Funding will be used to support the brands expansion into the Australian and US markets.
Source: Irish Times
Who: Popular Dublin bakery Bread 41 secured funding.
What: €50,000 was provided by Enterprise Ireland as part of the €265,000 investment.
Why: The investment is used for a revamp that will see it expand into a new premises next door, as well as open a new restaurant upstairs.
Source: Irish Times
Who: CameraMatics, a fleet management software business that merges artificial intelligence with the internet of things to help reduce risk and improve efficiency of corporate vehicles.
What: The business has recently raised €4.1m in funding. Backers of the business include self-storage entrepreneur Seamus Lonergan and Barry Downes, founder of Feedhenry and Suir Valley Ventures.
Why: Not specifically mentioned, but expect it will be for the continued development of the business.
Source: Sunday Times
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.
THOUGHT FOR THE WEEK
The heralding of a new era of the office being dead is getting a little old and sensationalist.
Obviously, if there is a lot of admin desk-based work to be done, clearing it from a desk at home is as good as commuting to clear from an office with possibly more distractions and some project team meetings or standard customer meetings via video are effective to move things along in an efficient manner. Nonetheless, the psychological need to have separation between work and home must play into a drive to have more people back in the office than people think. Anyone young wants to mix and learn by osmosis and not be stuck in their inevitable low square footage base, anyone more senior doesn’t want screaming kids in the background. A guy well known to Renatus was senior in a pub group in the UK and he said they did extensive studies on why people needed a “third base” for psychological reasons, i.e. home, work and in Scottish and Newcastle’s case they suggested the pub. This current world is surviving on one base and it is not healthy for anybody.
@RenatusCapital Tweets
90.3% & 89.0%
The year-on-year decrease in the Irish overseas passenger arrivals and departures, respectively, for March 2021 amounting to 61,400 arrivals and 66,500 departures, according to @CSOIreland
45%
The year-on-year increase in the Irish consumer spending for April 2021 with spending this month up to April 18th amounting to €1.1bn, according to the latest debit and credit card statistics from the Central Bank. @RTEbusiness
88.9
The Bank of Ireland’s business pulse index for April 2021, up by 14.3 points from March and up 59.3 points year-on-year, according to BoI. @IrishTimes
8.5% & 7.3%
The year-on-year increase in the Irish retail volume and value indices, respectively, for March 2021. The most notable volume changes were in Bars (-81.3%) and Hardware, Paints & Glass (+32.1%) according to @CSOIreland
4.5% & 7.3%
The year-on-year increase in the volume and value, respectively, of Irish mortgage drawdowns for Q1 2021 amounting to 9,091 mortgages to the value of €2.14bn. This is the highest volume in Q1 of any year since 2009, according to the @BPFINews
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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
- Management buyouts
- Management buy-ins
- Growth financing – both organic and acquisition growth financing
- Full and partial share sale.
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