Renatus Weekly M&A & Company Performance Private Equity Newsletter 02/10/2022

Deal Details: DCC plc has acquired PVO International. Deal details have not been disclosed and is subject to competition authority approval in the Netherlands, Germany, Austria and Poland.

DCC plc is an international sales, marketing, and support services group, based in Dublin. It operates through three divisions: Energy, Healthcare and Technology. DCC was founded by Jim Flavin in 1976 and was listed on the Dublin and London stock exchange in 1994. The group is led by CEO Donal Murphy. In FY22 the business reported turnover of €21.0bn, which converted to an EBITDA of €885.5m.

PVO International is a Netherlands-based distributor of solar panels, inverters, batteries and accessories. The company was founded in 2014 by Frank Heijckmann and currently employs c. 50 people. The business is reported to have had revenues of c. €190m in the most recent financial year.

Advisers: None mentioned

Renatus Comment: DCC is positioned in 3 high growth sectors and has completed a number of bolt-on acquisitions over the last number of years. This acquisition is part of DCC’s strategy to transition from generating about 71% of its profits from its LPG, retail and oil divisions to one where up to 75% of earnings will come from healthcare, technology, clean energy and renewable activities by 2030.

Growth is very strong within the solar panel industry globally, with governments offering grants and introducing renewable energy initiatives. The 2023 local budget includes plans to install solar panels in every school in the country and a €337m allocation towards grants for energy efficiency, with similar initiatives being seen in every jurisdiction.

Source: The Irish Times

Deal Details: Kingswood Holdings Limited has acquired a 70% stake in Moloney Investments Limited, in a deal reported to be worth €25.8m.

Moloney Investments Ltd, trading as MMPI Group, is a Dublin-based financial advisory group that provides financial planning, general and protection insurance, as well as investments, pensions, and mortgage advice. The business was founded in 1993 by CEO Bryan Moloney and currently employs 54 people, including 18 advisors. Michael Ryan is the business’ Chairman. The business does not report turnover or EBITDA information. The owners included Bryan Moloney, Thomas Horkan, David Swaine, Gerard Lawlor and Peter Hanrahan.

Kingswood is an AIM-listed international fully integrated wealth management group that advises and manages assets for a range of clients. The business is headquartered in Bury, UK. It was founded in 2010 and has been publicly listed since 2014. David Lawrence leads the business as Chief Executive. The business reported FY21 revenue of c. £145m.

Advisers: None mentioned

Renatus Comment: Kingswood has been an active consolidator in the UK wealth management market having completed four UK-based acquisitions in 2021 and seven UK-based acquisitions so far in 2022. This is the group’s first move into the Irish market and creates the opportunity to cross-sell products and consolidate platforms.

In a similar development, just last week UK-based Fairstone acquired PAX Financial, also marking the business’s first step into the Irish market. Other significant recent developments in the Irish wealth management space include Bank of Ireland’s acquisition of Davy and AIB’s acquisition of Goodbody.

Outside of the top 4/5 large players, this market is highly fragmented and we expected to see further consolidation as scale is key due to increasing compliance costs and competition in the market.

Source: London Stock Exchange

Deal Details: Procure Wizard Ireland has been acquired by the Access Group. Deal consideration has not been disclosed.

Procure Wizard Ireland, trading as Access Hospitality Ireland, is a reseller of the procurement solution Procure Wizard, which the Access Group acquired in 2018. The software streamlines the procurement process, reduces indirect spend and automates invoice processing. Procure Wizard Ireland was founded by David Noone in 2015. It is owned by David Noone, Tom Doherty and Michelle Muldowney. The business does not report turnover or EBITDA information.

The Access Group is a UK-based software solutions provider for the hospitality and leisure sector offering software to simplify processes, streamline operations and improve both profitability and the guest experience.  It is headquartered in Loughborough, United Kingdom. In FY21 the business had turnover of c. £388.8m, which converted to an EBITDA of c. £144.3m.

Advisers:
The Access Group:
Legal: ReganWall led by Kieran Regan and Neil Nolan.
Tax: PwC

Procure Wizard Ireland:
None mentioned

Renatus Comment: Procure Wizard Ireland is a reseller of procurement solution Procure Wizard, which was acquired by the Access Group in 2018. Access Group received follow-on investment from existing shareholders in June, which valued the company at £9.2bn. Having completed three acquisitions in the UK and one in Australia in 2022, this acquisition will see the Access Group double-down on its efforts in Ireland, taking Procure Wizard activities in-house, giving it greater control over the Irish operation.

Source: Access Group Press Release

Deal Details: Brewin Dolphin Holdings PLC has been acquired by the wealth management arm of Royal Bank of Canada for a deal consideration of c.$2.4bn. The deal was originally announced in March and has now receivced shareholder and competition authority approval.

Brewin Dolphin is one of the leading wealth managers in Ireland and the UK. It is headquartered in London and is led by CEO Robin Beer. In FY21 the business reported turnover of c. £405.9m which converted to EBITDA of c. £92.5m.

Royal Bank of Canada is a Canadian multinational financial services provider. David Thomas is the Chief Executive of its international wealth business.  Brewin Dolphin will now operate as RBC Brewin Dolphin with c. £58bn AUM.

Advisers: None mentioned

Renatus Comment: Having acquired the wealth management arm of Investec in 2019 for €44m, Brewin Dolphin was a top-four player in the Irish wealth management industry along with Davy, Goodbody, and Cantor Fitzgerald.

This deal represents a windfall for its 2,000 employees who owned  (a share of) 4.13% of the company’s shares.

It is a significant investment for RBC, which will join the race to capture market share across the UK and Ireland as the wealth management industry continues to consolidate.

Source: RBC Press Release 

Deal Details: Fisher & Fisher legal practice has acquired Colman R Hanna Solicitors. Deal details have not been disclosed.

Fisher & Fisher is a Newry-based legal practice that has six locations across the Kingdom. It specialises in the areas of crime, property, estates & wills, litigation, family and business & corporate. The business was founded in 1898 and is led by Ronan Mcguigan and Jacqueline Malone, both of whom have joint ownership of the business. It does not report turnover or EBITDA information.

Colman R Hanna Solicitors is a Newcastle-based solicitors. The business was founded by Aidan Hanna and currently employs 9 people. All 9 employees will be retained following the acquisition and will expand Fisher & Fishers current presence in Newcastle. The business does not report turnover or EBITDA information and was owned by Gerard O’Hagan, Thomas Mitchell, Anthony Kane, Timothy Hanna and Sean Boden.

Advisers: None mentioned

Renatus Comment: Consolidation within the legal and accountancy sectors has been a key theme in recent months. Much of this consolidation has been focused on the larger end of the market, with deals involving key players such as Eversheds Sutherland, Addleshaw Goddard and Clark Hill. However, the rationale for consolidation among smaller players is just as strong, with merged practices providing these firms with greater bandwidth to remain competitive in an increasingly competitive professional services landscape.

The surge in M&A in professional services has been previously discussed by Conor Mehigan of Renatus in a recent Business Plus article.

Source: Irish News

Deal Details: Galium Limited, t/a Complete Calibrations, has been acquired by Transcat Inc. in a deal worth c. $1.2m.

Complete Calibrations is an ISO 17025 accredited company specialising in calibrating and supplying temperature measuring equipment for the food industry and test weights to the pharmaceutical industry. The business was founded by Darren O’Sullivan in Cork in 2006. The business does not publish turnover or EBITDA information.

Transcat, Inc. is a leading provider of accredited calibration, reliability, maintenance optimisation, quality and compliance, validation, computerised maintenance management system (CMMS), and pipette services particularly in the life sciences industry. It was founded by William Berk in 1964 and is headquartered in New York. In FY22 the business had a turnover of c. €176.3m, which converted to an EBITDA of c. €21.2m.

Advisers: None mentioned

Renatus Comment: Transcat Inc has been an active acquirer in recent years announcing the acquisition of e2b Calibration on the same day as Complete Collaborations. The majority of Transcat’s acquisitions have been US-based, however, in September 2021 it acquired NEXA (formerly Cal Opex). Similar to Complete Collaborations, NEXA is headquartered in Cork and provides calibration and other technical services to pharmaceutical, industrial manufacturing, energy and chemical process industries. Although this is a relatively small acquisition for Transcat, it is likely that the rationale behind the deal is to expand Irish presence through an ISO 17025 accredited calibration lab, which will further stand to Transcat’s own ISO 17025 accreditation.

Source: Capital IQ

Bacardi to acquire Teeling

Deal Details: Bacardi is to acquire a controlling stake in Teeling.

Teeling is an Irish whiskey brand which has been in operation since 1782. Jack and Stephen Teeling established its own whiskey distillery in Dublin in 2015. Bacardi already owns a large stake in the business, with Jack and Stephen Teeling controlling c. 46% of shares between them. The business had FY20 turnover of €14.6m, which converted to an EBITDA of €8.8m.

Bacardi is one of the world’s largest spirit companies in the world, with brands including Bacardi, Grey Goose, Patron and Teeling. The business does not report turnover or EBITDA information.

Source: Business Post

Linnaeus Veterinary’s to acquire Blackhall Facilities Management

Deal Details: Linnaeus Veterinary has submitted a second application to the CCPC for approval of its acquisition of Blackhall Facilities Management, having withdrawn its original application in June.

Blackhall was founded by Karl Cosgrave and operates 15 veterinary clinics throughout Meath, Dublin, and Wicklow. The business employed 118 staff throughout FY20. The business is today led by Charles and Julianne Cosgrave, the children of founder Karl Cosgrave.

Linnaeus, the Mars subsidiary involved in this transaction, is a group of veterinary practices operating across the UK and Ireland. Linnaeus Veterinary has acquired five family-run veterinary practices throughout Dublin and Kildare. This deal will bring the total Irish veterinary clinics under Linnaeus’s control to 20, making it a market leader.

Source: CCPC

The proposed merger between Tullow Oil and Capricorn Energy has collapsed

Deal Details: A merger between Tullow Oil and Capricorn Energy that was proposed in June has now collapsed after shareholders turned on the original deal. Capricorn Energy has proposed a new merger with NewMed Energy.

Founded in Tullow in 1985, Tullow Oil plc is a multinational oil and gas exploration company, with its headquarters in London, United Kingdom. The company is exclusively listed on the London Stock Exchange following its withdrawal from Euronext Dublin earlier this month. In FY21 the business recorded revenue of £1.0bn, which converted to an EBITDA of c. £759.9m.

Founded in 1980, Capricorn Energy plc is a British oil and gas exploration and development company and is also listed on the London Stock Exchange. In FY21 the business had revenue of c. £43.2m.

Tullow Oil’s shares fell c. 5.5% following the announcement and Capricorn Energy’s shares increased c. 8.9%.

Source: Irish Independent 

Egon Zehnder opens new Dublin office

Deal Details: Egon Zehnder, the leadership advisory firm, has opened a new office in Dublin.

Egon Zehnder partners with a range of businesses to provide services such as executive search, leadership solutions, CEO search and succession and board advisory. The Dublin office will be led by Andrew Roscoe, supported by Karl Croke, Fintan McGovern and Aine Flanagan.

Source: Egon Zehnder Press Release

Flynns of Lackagh Limited is a family-owned Topline Hardware Store, Agricultural Merchants and Super Valu Supermarket. The business was established in 1842 in Lackagh, Co. Galway and is owned by Julien and Emma Flynn.

In its financial year to December 2021, Flynns of Lackagh Limited reported a turnover of c. €22.2m, an increase of 2.1% year-on-year. This converted to an EBITDA of c. €1.1m, an increase of 4.5% year-on-year. Administrative expenses decreased by 2.4% year-on-year despite a rise in revenues which helped EBITDA growth.

The business finished the year with a cash balance of c.€1.1m, a c. €0.2m increase on FY20. Significant post-EBITDA cash movements included a new loan of c. €966k and a working capital investment of €740k.

The business employed an average of 99 people over the year at an annual cost of c. €2.1m.

Creative Composites Limited is a composites manufacturer, with its operations consisting of compression moulding, resin transfer moulding, hand lay-up moulding and CNC trimming. The business is based in Lisburn, Co. Antrim and majority owned by Richard and Vina Maud Ennis.

In its financial year to December 2021, Creative Composites generated turnover of c. £14.5m, which converted to an EBITDA of c. £1.1m. This represented an 18.5% rise in turnover and a c. £922k rise in EBITDA year-on-year. The business’ improved EBITDA is largely due to its increased revenue figure in tandem with realisng operating leverage, with administrative expenses falling by 18% year-on-year.

The business finished the year with a cash balance of c. £4.5m, an increase of c. £1.1m year-on-year. Significant post-EBITDA cash movements included a c. £1.3m investment in working capital along with a loan repayment of c. £825k.

Creative Composites employed an average of 164 people over the year at an annual cost of c. £5.4m.