Renatus’ Weekly M&A Newsletter – 24/01/2021
January 24, 2021Renatus’ Weekly M&A Newsletter – 07/02/2021
February 7, 2021
Renatus Weekly M&A & Company Performance Newsletter 03/01/2021
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
HAPPY NEW YEAR
All of us in Renatus would like to wish everybody a Happy and healthy New Year.
It’s hard not to feel a little down with the recent spread of the virus, and consequent lockdown news. It’s clearly harder for some over others. However, if we were told last summer that we would have the most benign form of Brexit agreed, Biden would beat Trump and a vaccine is close, we would have taken it with both hands.
END-OF-YEAR QUESTIONNAIRE FINDINGS
In closing 2020, Renatus conducted a short survey amongst its valued network in conjunction with The Sunday Times. We asked questions looking back on how Covid impacted the last 12-months, and what to expect ahead for the next 12-months post-Covid. The survey was conducted before the recent level 5 announcements and received over 1,000 responses, between 13/12/2020 to 17/12/2020.
Our results are summarised here.
Core highlights from the survey:
- 74% of respondents were C-Level, Shareholders or Management.
- While 48% of respondents expect to work either “majority from home” of “all from home” in H1 2021, this sentiment flips in H2 2021, with 47% of respondents expect to spend the “majority of the time” or “all of the time” back in the office.
- Working from home looks set to remain in a post-Covid world. 68% of respondents expecting to work more from home post-Covid, with 38% of these expecting to work “significantly more” from home. This is compared to pre-Covid, suggesting the future is neither one nor other, but much more of a hybrid.
- 2021 is being viewed as a year of a return to growth, with 53% of respondents expecting to hire more staff in by December 2021 that they had in December 2019. Only 15% expect to have less staff.
- On balance, working from home has had a positive effect on productivity. 78% of respondents believe that their team is equally or more productive working from home vs 23% who believe that their team is less productive.
- Video conferencing looks to be a more long-term fixture in how people interact. There was an 8 percentage point rise in the respondents expecting to increase their use of video conferencing services in 2021 compared to our survey in April. In 2021, 98% of respondents expect to use video conferencing the same or more than they did pre-Covid.
- Covid travel concerns remain, with 77% of respondents expecting to travel less by air in 2021 vs pre-Covid, up 23 percentage points from the same question in Aprils’ survey.
- M&A opportunities are a key pillar of growth for respondents in 2021, with 28% expecting it to be their business’ biggest opportunity for growth.
- The Covid hangover on business sentiment is seen as the biggest potential limiting factor for growth with respondents. 39% of respondents see business sentiment as the biggest limiting factor, followed by market growth with 27%.
- Unsurprisingly, with 34% of the responses, the thing people miss most in lockdown is socialising.
M&A ACTIVITY
Livingbridge invests in Welltel
Deal Details: Livingbridge, a London-based private equity firm, has made an investment into Welltel. The terms of the deal were not disclosed.
Dublin-headquartered Welltel, founded in 2007 by CEO Ross Murray and Executive Chairman John Quinn, is a fast-growing independent enterprise communications provider in Ireland.
It provides c. 3,500 customers with expertise in unified communications, contact centres, secure connectivity, managed IT services, remote working, and phone systems.
Livingbridge is a mid-market private equity firm launched in 1995. Headquartered in London, the firm also has offices in Melbourne, Australia and Boston, US.
Advisers: Clearwater International (corporate finance) and Pinsent Masons LLP (legal) advised Livingbridge. Deloitte’s M&A Advisory team in Dublin (corporate finance), Arthur Cox & BHSM (legal) and PwC Dublin (tax) advised Welltel.
Renatus Comment: This is an exciting announcement for the Welltel team. Welltel has been quite an acquisitive busines over the past few years, with five acquisitions recorded in this newsletter (Intellicom in August 20, Invishtech in February 20, Eycro Communications in May 18, ATS in July 17). The investment by private equity firm Livingbridge may well be a catalyst for continued acquisitive growth.
Welltell is owned by its management team.
Source: Livingbridge Press Release
Nualtra is acquired by Ajinomoto Cambrooke
Deal Details: Cambrooke, a wholly owned subsidiary of Ajinomoto Health & Nutrition North America has acquired Nualtra Limited, a medical nutrition company, for an undisclosed sum.
Irish-based Nualtra develops and provides medical foods to public health systems for the treatment of patients with disease-related malnutrition. The company’s products are exclusively sold to the NHS and HSE and reimbursed after being prescribed by a doctor.
Founded in 2000, Cambrooke, a member of The Ajinomoto Group, a Massachusetts-based therapeutic nutrition company and global provider of medical nutrition products for patients with serious unmet medical needs.
Nualtra was founded in 2012 by dietitian Paul Gough and received backing from Enterprise Ireland, Leslie Buckley and Sean Corkery, among others.
Advisers: LK Shields acted for the shareholders of Nualtra on the legals, Capnua provided corporate finance advice and PwC provided finance and tax vendor due diligence services.
Micheal Neary and Kevin Doyle of Grant Thornton provided buyside corporate finance advice, Grant Thornton’s Peter Vale advised on the tax side, and Sheena Doggett of A&L Goodbody acted for the buyer on its legals.
Renatus Comment: It’s reported that Nualtra’s HQ, leadership and team will remain unchanged after the acquisition. Becoming part of a larger global group should provide Nualtra’s team greater customer reach and scope of expansion.
Source: Businesswire
Greencoat acquires two wind farms
Deal Details: Greencoat Renewables PLC is purchasing two wind farms from Norwegian state-owned company Statkraft for a combined price of €123m.
Cloghan, a 37.8 Mega Watt wind farm, is located in county Offaly, and Taghart, a 25.2 Mega Watt wind farm, is located in county Cavan.
The acquisition is made under a forward sale agreement, which means Greencoat will pay for the assets at a future date. The deal is due for completion once each wind farm is fully operational, expected in late 2022.
Both wind farms benefit from 15-year fixed price contracts, secured under the recent Renewable Energy Support Scheme 1 (RESS 1) auction.
Advisers: McCann FitzGerald advised Greencoat on the deal.
Renatus Comment: Yet another acquisition by Paul O’Donnell led Greencoat, a regular acquirer in this newsletter over the last couple of years. With Ireland’s ambition to hit 70% renewable energy usage by 2030, there is plenty of road left for funds like Greencoat to into Irish assets.
Source: Independent
Grafton to acquire Proline
Deal Details: Grafton Group, owner of Ireland’s largest builders’ merchants Chadwicks and Woodies DIY, has agreed to acquire Proline Architectural Hardware for an undisclosed sum. The completion of the deal is subject to competition authorities’ approval.
Dublin-based Proline distributes architectural ironmongery products for doors, specialises in the supply of a wide range of traditional and contemporary architectural ironmongery products. In 2019 Proline reported revenue of €10.8m.
Advisers: JPA Brenson Lawlor provided Proline’s shareholders with corporate finance and tax advice, and were assisted by Proline’s auditors Hayden Brown Chartered Accountants. Lavelle Solicitors provided the shareholders with legal advice.
Renatus Comment: Looking back at Grafton Group’s press releases, this is Grafton’s fourth acquisition in the last two years, including one in each of the UK, Netherlands and Belgium. It’s market-leading position in the building suppliers market in Ireland has new competition, with Screwfix (part of the Kingfisher group, owner of B&Q) opening up stores in Sandyford, Swords, Waterford Ennis and Kilkenny, with a further 10 stores to open in Ireland by the end of this month.
Source: Irish Times
Valeo Foods acquires UK snack company
Deal Details: Valeo Foods, an Irish consumer food group has acquired UK snack maker It’s All Good (“IAG”). The terms of the deal were not disclosed, however IAG’s value was recently estimated in trade press at c. £25m.
Capvest-backed Valeo controls leading food brands, including Odlums, Shamrock, Roma, Erin and Kelkin, among others. It operates in over 100 countries and sells over 600m units annually, with an annual sales exceeding €1bn.
UK-based It’s All Good, founded in 2012, is the maker of private-label tortilla chips and rice cakes for Aldi, Lidl and M&S, as well as its own Manomasa brand. It has been backed by PE firm NVM since 2014, following a £3.5m minority investment.
Advisers: None Mentioned
Renatus Comment: This is a great example of both growth through acquisition by Valeo, and also the potential value-add that a private equity partner can bring for It’s All Good. NVM invested £3.5m of growth capital in 2014 to enhance the manufacturing capability and product development of the business. This investment has helped scale the business and enhance shareholder value before this much bigger exit to Valeo.
Source: Irish Times
Safefood 360° is acquired by LGC
Deal Details: LGC, an international life science tools business, has acquired the food safety management software business Safefood 360° for an undisclosed sum.
Safefood 360°, Inc., founded in 2011 in Dublin and now headquartered in New York, provides the global food industry with a web-based software platform that helps food businesses obtain and maintain compliance with international food safety regulations and commercial retailer standards.
The business was founded by George Howlett and Philip Gillen, both of whom had significant shareholdings before the sale to LGC.
UK-based LGC provides a range of measurement products and services that underpin the safety, health, and security of the public, including reference materials and proficiency testing, genomics reagents, certification and instrumentation.
LGC has annual revenues of c. £600m and employs c. 3,800 people with an extensive geographic footprint covering North America, EMEA, and APAC.
Advisers: Maples Group advised Safefood and it’s shareholders on its sale to LGC
Renatus Comment: Similar to Nualtra above, this reads like a good exit for the business founders who have scaled the business before exiting to a larger international player, but will remain with the business and work from within the larger organisation.
Source: Safefood 360°
Trinity Consultants acquires AWN Consulting
Deal Details: Trinity Consultants, a Texas-based engineering consultancy business, has acquired Dublin-based AWN Consulting, an environmental, acoustics and risk management consulting firm. Deal details were not disclosed.
Employing over 40 people, AWN was founded in 2000 by Terry Donnelly, Dr. Fergal Callaghan, Chris Dillworth, and Dr. Edward Porter, with Teri Hayes, Damian Kelly, and Stephen Smyth joining later to make up AWN’s current senior management team, all of whom will remain in place following the acquisition.
Advisers: AWN received legal advice from a Regan Wall team of Adrian Wall, Adam Griffiths and Neil Nolan and Sarah Connolly.
Renatus Comment: Yet another professional services acquisition. In these spaces, acquisitions bring in specialist teams and client books that can add immediate value to the acquirer.
Source: Trinity Consulting press release
DEAL UPDATES
Applegreen sale terms have been agreed
BidCo cash offer terms to take Applegreen private have been agreed.
Under the deal, which is subject to shareholder and regulatory approval, Applegreen shareholders will receive €5.75 per share valuing the entire share capital at approximately €718.1m.
BidCo is a newly formed company that includes Applegreen founders Robert Etchingham and Joseph Barrett, and Blackstone, a multi-billion dollar private equity and investment group.
As at June 30 Applegreen operated 559 sites, including 69 motorway service area sites and employed around 11,145 people across its main territories.
The independent Applegreen board was advised by Goodbody.
Source: Independent
Kingspan pulls out of Firestone bid
Irish insulating giant Kingspan has exited the race for Bridgestone’s Firestones Building Products business.
It is reported that Kingspan and building materials maker Standard Industries have decided against submitting offers for the December 21st deadline.
The reason for Kingspan pulling out of the bidding process was not disclosed.
Source: Irish 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.
@RenatusCapital Tweets
10.7%
The year-on-year decrease in the Irish wholesale price index for November, according to @CSOIreland
92.3% & 92.7%
The year-on-year decrease in the Irish overseas arrivals and departures, respectively, for November 2020 amounting to 103,900 arrivals and 96,800 departures, according to @CSOIreland
24.3% & 33.3%
The year-on-year increase in the Irish Mortgage approvals volume and value, respectively, for November 2020 amounting to 5,198 mortgages approved to the value of €1,281m – highest monthly value since BPFI records began in 2011. @BPFINews
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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