Renatus Weekly M&A & Company Performance Private Equity Newsletter 03/10/2021

Deal Details: Altada has raised $11.5m in a funding round led by Rocktop Partners with other notable participants including Elkstone Partners and Enterprise Ireland.

Altada has developed a software platform that leverages artificial intelligence to increase operational efficiencies in a range of sectors which includes financial services. It helps to automate processes such as contract reading. The business was founded by Allan Beechinor and Niamh Parker in 2017 and is based in Cork. The business employs 70 people across Europe and the US.

The funding will reportedly be used to hire around 100 new employees globally, further expand into the US by opening an office in Austin and expand into the Asia Pacific region.

Advisers: Clearwater International (Altada’s long-term corporate finance adviser) led by John Curtin and Michael Quinlivan, advised on this funding round and will be advising on a larger funding round in Q2 2022. ReganWall, the legal advisers to Altada since its early days, acted for the company on the fundraising.

Renatus Comment: Since being founded in 2017, Altada has grown to become a global company in just three short years, with a portfolio of flagship  clients in the financial services sector.

The banking industry has been undergoing a technological upgrade for some time with many traditional, labour intensive processes being improved with solutions such as those that Altada offer. It is also true that these solutions are in demand globally, which is evidenced by Altada’s current geographic footprint and its plans to expand further afield.

The business looks well positioned to go from strength to strength.

Source: Irish Times

Deal Details: Irish-owned global packaging company Zeus has acquired Limerick Packaging for an undisclosed sum.

Limerick Packaging, founded in 2002 by Connie Ryan and Mike Boland, is focussed on providing corrugated packaging solutions to the health and food processing sectors. It was reported that Limerick Packaging has annual turnover of €17.4m and employs 45 staff.

Zeus Packaging is one of the largest packaging companies in the UK & Ireland. It was established in 1998 by Brian O’Sullivan and is today led by its CEO Keith Ockenden. It employs 670 in total across 26 countries worldwide. The business has sites in Ireland, UK, Northern Ireland, Germany, Spain, Poland, Canada, New Zealand, Australia and China.

Advisers: Limerick Packaging – The deal was led by George Kennedy, Partner and Ciara Downes, Trainee Solicitor at Holmes.

Assisting Zeus in the acquisition with funding, tax and legal advice, and financial due diligence were Sean O’Keeffe, Ulster Bank and OFX Solicitors in Cork.

Renatus Comment: This transaction is the eighth business to be integrated into the Zeus group over the past c. 2 years, with the most recent being the Austrian-based food packaging solutions business, Petruzalek, which it acquired in February 2021.

Zeus has grown at a rate of 7 to 10% per annum for the last 5 years and has an annualised turnover of €325m. Zeus is a great case study for the power of a well-executed M&A growth strategy.

Source: Zeus Packaging press release

Deal Details: Novostrat, who is an Irish-based manufacturer of polyethylene foam, has been acquired by Abriso-Jiffy, a leading European manufacturer of protective packaging and insulation. Transaction details were not disclosed.

The deal, which is subject to regulatory approval, is expected to close in October.

Novostrat was founded in 2001 and currently has two facilities, one in Ireland and one in Poland. Novostrat specialises in the production of foam for the packaging and building industries.

Abriso-Jiffy was founded in 1985 and is a leader in the European market in the manufacturing of various foam products. Abriso-Jiffy are is headquartered in Belgium with 15 production facilities throughout Europe. It employs a reported 1,500 people.

Advisers: None mentioned

Renatus Comment:  ​​​​​​Novostrat and Abriso-Jiffys range of products appear to have significant overlap and this acquisition will create significant synergies for the Abriso-Jiffy group, allowing them to better serve the wider European market while also enhancing the competitive strength of Novostrat.

It was reported that Novostrat recorded revenue of c. €30m in its most recent financial year while Abriso-Jiffy had revenue of c. €250m.

Source: Abriso-Jiffy press release

Deal Details: HSS Hire Group have agreed to sell All Seasons Hire to Cross Rental Services for a reported £55m (€64m).

HSS Hire Group is a leading supplier of tool and equipment hire in the UK and Ireland.

All Seasons Hire is a heating, ventilation, and air conditioning hire business. The reported reason for the sale was to accelerate the repayment of the HSS Hire’s debt. In its financial year to December 2019 (its most recently filed accounts), All Seasons Hire Limited reported revenue of c. £14.8m and EBITDA of c. £4.4m.

Cross Rental Services is an equipment rental company specialising in heating, cooling, refrigeration and catering equipment operating in Ireland and the UK. This acquisition should allow them to enhance their position as a leading supplier of heating and cooling equipment in the Irish and UK markets.

Advisers: Kirstie O’Flanagan, Marc Rogers, Eimear McCann, Aisléan Nicholson and Craig Harrison from Deloitte Financial Advisory and Tax teams supported Cross Rental Services on this transaction.

Renatus Comment: Cross Rental Services had previously been backed by Lonsdale Capital Partners who acquired a share in the business in 2018 and went on to complete two bolt-on acquisitions in 2019 and 2020. In August of 2021, the business was acquired by Elysian Capital LLP alongside company management. It appears the business hasn’t missed a beat with the acquisition following swiftly after its own transaction.

Source: MarketWatch

Deal Details: Service Matters Limited (SML) has been acquired by CWS International GmbH for an undisclosed amount.

SML, established in 1997, is a key player in the Irish hygiene, workwear, and the facilities management services sector.

Following this acquisition, CWS becomes one of the largest providers of workwear, washroom and floorcare rental services in Ireland.

The group currently employs 11,000 people in 15 countries. In 2020, the company generated a turnover of €1.2bn euros. CWS International GmbH and its subsidiaries are owned by Franz Haniel & Cie. GmbH.

Advisers:
CWS International:
Corporate Finance  – Greg Hogan & Conor Gleeson (Baker Tilly)
Tax  – Alma O Brien, Colin Dignam and Kate Prendiville (Baker Tilly)
Legal – Ainsley Heffernan, Stuart Connaty, Paul Gough, Daire Russell (Beauchamp Solicitors)

Service Matters Limited:
Corporate Finance – David Farrell & Anita Mulligan (Grant Thornton)
Tax – Una Ryan & Dympna Connor (Grant Thornton)
Legal –  Mark Roberts & Sharon Meaney (Leman Solicitors)

Renatus Comment:  In Service Matters Limited’s most recently filed financial year to December 2020, the business reported revenue of c. €6.7m which converted to EBITDA of c. €1.7m. Service Matters Ltd operates in a sector that would very likely have been a beneficiary of Covid-19 with hygiene-related products and services being in high demand.

Source: CWS press release

Deal Details: MyComplianceOffice (MCO), a compliance solutions provider for financial services, has acquired Governor Software. The transaction details were not disclosed.

MCO, headquartered in Dublin, provides compliance management software for financial services companies around the world that enables them to reduce their risk of misconduct. The MyComplianceOffice platform lets compliance professionals demonstrate that they are proactively managing the regulated transactions for the firm, the activities of employees, third-parties, and other external entities that the client engages with in their business activities.

Governor Software, founded in 2015 by CEO Richard Pike, is a leading technology company specialising in compliance governance and oversight solutions. Governor Software Ltd supports senior risk and compliance executives at financial institutions maintain governance and oversight through clear visualization of their regulatory obligations and risk appetite.

The financial performance of both companies is not reported.

Advisers: Wallace Corporate Counsel LLP acted for Governor Software on this transaction.

Renatus Comment: This appears to be a combination of very complementary offerings in the Irish market which is home to a significant number of major, global financial institutions.

Richard Pike, CEO of Governor Software, is currently Chairman of Citadel Securities (Ireland) Ltd, an Independent Non-Executive Director and Chair of the Board Risk Committee at Starling International, Independent Non-Executive Director at FBD Insurance plc, Independent Non-Executive Director at Citadel Securities (Europe) Ltd. The addition of Mr. Pike to MCO’s team should open up doors for the Irish business and support future growth.

Source: MCO Press Release

Deal Details: anuview, an Irish cyber security software provider, has been acquired by Nasdaq-listed VIAVI Solutions for undisclosed amount.

anuview was founded by Mike McGrath, Ross Palmer and Kevin Wilkie. The business works with some of the world’s leading brands to deliver greater security and visibility to efficiently deal with security threats. It has offices in Dublin, Sligo, London and San Francisco.

VIAVI, together with 350+ global channel partners, sells a broad portfolio to network, communications, and electronics technology leaders across the globe.

Headquartered in the US, VIAVI employs over 3600 people globally and reported annual revenue of $1.2bn (FY ’21).

Advisers:
anuview: David Brangam led the Simmons & Simmons team with Andrew Fullen, Patricia McCarvill, Geoffrey Curran, Ruth Crawley and Colin Reynolds.

VIAVI Solutions Ireland Ltd: John Matson (Corporate & M&A) led the Arthur Cox team and included Niamh Gunning (Corporate and M&A), Ailish Finnerty, Dearbhla Ní Fhloinn and Dearbhla O’Gorman (Tax), Ailbhe Moloney (Employment), Olivia Mullooly and Alison Peate (Technology and Innovation) and Michael Shovlin (Pensions).

Renatus Comment: Since being founded in 2016, anuview has experienced significant growth in its 5 years. While financial results are not reported by the company, the list of its customers is testament to its performance. Today, it counts leading brands such as McDonalds, Musgraves, 3, applegreen, Aurivo and Philips as customers. With the backing of the global brand VIAVI now behind it, we hope to see anuview continue its growth in international markets as well as the  domestic market.

Source: LinkedIn

Deal Details: Gowan Group has reached a deal to acquire FCA Ireland. The terms of the deal, which is subject to regulatory approval, were not disclosed.

Gowan Group, founded in 1969 by the late Con Smith, is a family-owned holding company controlling many successful trading companies and is mostly associated with the Irish motor trade.

The deal comes in the wake of the merger of car manufacturers PSA and FCA earlier this year, which created Stellantis, one of the world’s biggest car manufacturers.

Advisers: Richard Curran, Marco Hickey, Pat Ryan and Kristofer O’Shea of  LK Shields Solicitors LLP acted for the Gowan Group.
McCann FitzGerald provided legal support to Stellantis.

Renatus Comment: New car sales is a sector which tends to move with the fortunes of the wider economy and the past 18 months have certainly been a difficult time for the industry with Covid-19, chip shortages and shipping difficulties.

To get a better understanding of where the industry is today versus recent history, we looked at the past 25 years of new private car sales data provided by the CSO.

In the first 8 months of 2021 (January to August), 88,618 new private cars were licenced in Ireland. On a comparative basis, this ranks 18th in the past 25 years.

2020 was 22nd with 71,873 new private cars licensed.

The year 2000 was 1st with 194,072 new cars (c. 2.2x that of 2021). The year 2009 was 25th with 49,412. Other notable years are 2005, 2006 and 2007 which ranked 4th, 3rd and 2nd respectively.

The industry appears to be returning to growth today in line with the wider economy and let’s hope it continues.

Source: RTE

Deal Details: Flutter Entertainment plc has acquired Singular for undisclosed sum.

Singular, headquartered in Malta,  is an established brand in the iGaming industry providing the full spectrum of iGaming and omnichannel solutions.

Flutter Entertainment plc is an Irish bookmaking holding company created by the merger of Paddy Power and Betfair, and the later acquisition of The Stars Group.

Advisers: Crowe UK and Partis Capital.
Justin Edgar, Director at DWF, and Partner Edon Byrnes led the team who advised  on the sale.

Renatus Comment: Flutter has been active with M&A in recent times. Since Paddy Power’s merger with Betfair in 2015, the business has gone on to acquire Fan Duel in 2018 as well as adjarabet and Stars Group in 2019. The public markets has responded positively to this and Flutter’s wider activities. Its shares (LSE:FLTR) have increased by c. 70% between the start of 2018 to today. The Group reported revenue of c. £4.4bn in 2020.

Source: European Gaming

Deal Details: BrightPay have agreed to merge with Relate Sotfware to create an integrated payroll and accounting software services company for SMEs in Ireland and the UK.

The merger is being backed by private equity investor Hg. The value of the deal was not disclosed.

BrightPay, based in Co Meath, provides payroll and HR software solutions and is led by co-founder and CEO Paul Byrne. Mr. Byrne is a director of Thesaurus Software Ltd which created BrightPay, Bright Contracts and Thesaurus Payroll Manager.

Relate is a specialist in post-accounting, practice management and bookkeeping software. It is led by co-founder and CEO Ray Rogers.

Hg, a software and services investor with experience across Europe and North America, will become a majority investor in the combined entity.

Both Byrne and Rogers will remain as significant investors and become co-CEOs.

Ross Webster and Richie McMahon, co-founders of BrightPay and Relate respectively, will remain as investors.

Advisors: 
Relate and Brightpay:
Corporate Finance – Mazars team: John Bowe, Sean Damery, Daniel Gallery, Megan Duffy
Legals – BHSM – Joe McVeigh, Eimear Greally, Sarah O’Reilly

Hg:
Legals – Burness Paul & Arthur Cox

Renatus Comment: The merger of BrightPay and Relate will open up cross-selling opportunities for both businesses’ existing customers whilst also creating a compelling integrated offering for new customers. The benefits of scale as a combined entity, in addition to the backing of an international investor, should also help to unlock opportunities.

Brightpay Ltd reported revenue of c. €8.2m in FY Jun-20 which converted to EBITDA of c. €4.3m. Financial results were not available for Relate.

Source: Private Equity Wire

Deal Details: It has been reported this morning that Pandagreen has acquired Exomex which trades as McElvaney’s Waste and Recycling for a reported €12m.

Monaghan-based McElvaney Waste and Recycling services includes bin collections, recycling, septic tank cleaning and skip hire. The business was owned by Hugh and Emmet McElvaney.

Pandagreen operates in a similar services, offering residential and commercial bin collections, skip hire (through A1 skips) and commercial waste recycling. Pandagreen is part of The Beauparc Group, a business with its origins in Beauparc, Co. Meath. Panda has over 300,000 customers and over 30 years of experience within the utility industry in Ireland. In June of this year, Macquarie Asset Management, via Macquarie European Infrastructure Fund 6, agreed to acquire Beauparc Utilities (“Beauparc”) from founder Eamon Waters and Blackstone Tactical Opportunities Fund.

Advisers: None mentioned

Renatus Comment: Exomex (Ireland) Limited which trades as McElvaney’s Waste and Recycling reported revenues of €9.2m which converted to EBITDA of c. €1.9m in its most recently filed accounts to December 2019.

Pandagreen Limited’s parent Beauparc Utilities Limited reported revenue of c. €508m which converted to c. €66m of EBITDA in its financial year to December 2019.

Source: Business Post