B4B acquires Fenix Solutions, Waterland PE invests in Silver Stream Health Care Group, French company buys into Irish wind market, the final Mulholland bookies is sold onto Boyle Sports and Kernal Capital leads a funding round for Automated Intelligence.
Renatus Weekly M&A & Company Performance Private Equity Newsletter 04/08/2019
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.
Deal Details: Belfast-based telecoms firm B4B has acquired Belfast-headquartered Fenix Solutions Ltd for an undisclosed sum.
The deal with Fenix comes as part of B4B Group’s continued organic and targeted growth within the telecommunications market in Ireland and the UK. The company continues to double in size year-on-year and this recent acquisition is seen as the next step in terms of its development and scalability.
It is a retirement sale by Fenix Solutions owner Kieron McGuire.
Advisers: HNH advised Fenix Solutions. Other advisors were A&L Goodbody on legals for the seller with Radius CF and Tughans acting on the buyside.
Renatus Comment: This year has seen a lot more retirement-related transactions than the past few years and there are definitely more coming based on our understanding of the market.
Source: Irish News
Waterland PE invests in Silver Stream Health Care Group
Deal Details: Dutch private equity group Waterland has taken a majority stake in Helen and Joseph Kenny’s Silver Stream Health Care Group. Healthcare industry specialist Kevin Beary has been appointed as CEO of the Group.
Based in Co Meath, Silver Stream provides long-term and respite residential and nursing care for up to 357 residents via seven Hiqa-registered care homes in Dublin, Wicklow, Meath and Tipperary.
Financial details of the transaction were not disclosed but Waterland was supported by external debt financing provided by Ulster Bank.
The transaction is Waterland’s first platform deal in Ireland, the fifth platform deal by the UK and Ireland team and the eleventh transaction since opening the office in Manchester in 2017.
Advisers: Silver Stream was advised by PWC (Tax), Flynn O’Driscoll (Legal) and LK Shields (Legal).
Waterland Private Equity was advised by Leman Solicitors (Legal – Ireland), RSM (Corporate Finance), Mills & Reeve (Legal – UK), Candesic (Technical, Regulatory and Commercial Due Diligence), RSM (Financial and Tax Due Diligence), Deloitte (Debt Advisory and Tax Structuring), CBRE (Property) and Marsh (Insurance).
Renatus Comment: The nursing home space has hotted up the past year. Those of scale and size and now trading at hotel type multiples having traded at much lower in previous years.
Source: Waterland PE press release
Idox plc proposed acquisition of Tascomi Ltd
Deal Details: Idox plc, a leading supplier of specialist information management solutions and services, has announced the proposed acquisition of Tascomi Ltd for c. £7.15m and its intention to undertake a placing via an accelerated bookbuild to raise net proceeds of c. £7.0m at 28.5 pence per share to fund the transaction.
Tascomi is a Northern-Ireland based software business that offers web and cloud-based software solutions to local authorities and Government departments in UK and Ireland.
The acquisition will accelerate the Group’s strategy and will strongly enhance the Group’s technological capabilities and market leading positions. The Enlarged Group combines Tascomi’s platform and product with Idox’s deep domain knowledge and account management model.
Advisers: HNH acted on the sell side as Corporate Finance advisers having advised on a £1m funding round. John McGuckian and Brendan Donnelly of Tughans advised the vendor on legals. Pinsent Mason (Glasgow) acted for Idox. Colin Finnegan, who also advised the seller, provided industry specific expertise.
Renatus Comment: Richard Martin left the security of being a team leader in a telco to setting up Tascomi and this is a true entrepreneurial success story. This is yet another good case study for Whiterock Finance in Northern Ireland. They provided significant funding in the early stages of Tascomi’s growth.
Deal Details: Neoen has bought eight wind farms in the Republic of Ireland with a total capacity of 53.4 MW for c. €25.8m ($28.6m).
The deal cements Neoen’s presence in Ireland, where it has a development business and where the government has raised its renewable energy and interconnection targets under an ambitious climate plan.
The Irish wind assets, which represents an enterprise value in the range of €46m, have been acquired from the Irish Infrastructure Fund (co-managed by AMP Capital and Irish Life Investment Managers) and Energia Group, which held a minority stake.
From 2020, and without accounting for optimization or repowering potential, Neoen stated the wind farms would generate c. €5m of EBITDA per year.
Advisers: KPMG acted as lead financial advisor to Neoen Plc, a French listed independent power generator, as well as undertaking TDD and FDD. Led by Russell Smyth, alongside James Delahunt.
Renatus Comment: This transaction is noteworthy as it is one of the first Irish transactions predicated on replacing / repowering the existing older turbines with larger turbines in the short-medium term.
Arachas sells advisory arm
Deal Details: Arachas Corporate Brokers, an Irish insurance intermediary led by CEO Conor Brennan, has sold its financial planning unit to Bluechip Financial Consultant, a Dublin-based pensions and investment advisor, for an undisclosed sum.
Bluechip was founded by accountant David Grennell over 25 years ago.
Arachas sold the financial planning unit because it was believed to be uncompatible with its core broking business.
Advisers: Arachas were advised by AIB Corporate Finance
Renatus Comment: There is a wave of consolidation occuring in the financial services space being led by private equity-backed companies.
Source: Sunday Times
Final Mulholland bookies sold onto Boyle Sports
Deal Details: The final five of the family-owned Mulholland bookies have been sold onto Boyle Sports. Mulhollands sold five to Paddy Power and another to Boyle Sports in recent years.
The family-owned business will continue to operate pitches at a number of racecourses including Balybrit, Balllinrobe, Punchestown, Listowel and Clonmel.
Mulhollands, was established in 1935 by John Mulholland Snr. and is led by Alan and Eddie Mulholland.
Advisers: Mark Gibbs of DHKN advised Mulhollands.
Renatus Comment: There has been mass consolidation in both retail and online bookmaking in the past number of years and it is likely to continue as the economies of scale in both retail and online are necessary to survive. Boylesports. Boylesports announced earlier in the summer they had bought Wilf Gilbert’s 13 shops in the midlands in UK and are close to opening them also.
Source: Connacht Tribune
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
SoapBox Labs recruits leading Shazam executive as new CFO SoapBox Labs, a speech recognition development firm, has appointed the former chief financial officer of online music giant Shazam as its new CFO. Colm O’Carroll spent 18 months preparing Shazam for its sale to Apple in 2018. Mr O’Carroll has joined the voice recognition company founded by Dr Patricia Scanlon, which recently signed partnerships with Microsoft and a number of education tech businesses in the US.
Chaucer names Head of Underwriting for Dublin business Chaucer, the specialty international re/insurance group, has announced the appointment of Jonathan Sutcliffe to the newly created role of Head of Underwriting at Chaucer Insurance Company DAC in Ireland. Mr Sutcliffe will assume a leadership role in the overall direction and management of the business, which trades as Chaucer Dublin. His responsibilities will include underwriting appetite and strategy, risk selection and acceptance and product development.
RDI Hub appoints new CEO RDI Hub, which is located in Killorglin, Co Kerry, has appointed Liam Croninas CEO. The hub is focused on boosting design-led R&D, innovation, digitisation and financial services locally. It is is a not-for-profit partnership between Fexco, IT Tralee and Kerry County Council. Mr Cronin is the former associate director of commercialisation at Trinity College Dublin’s Adapt research centre. Prior to working at Adapt, Mr Cronin worked in a number of roles at Microsoft for 25 years.
Interxion Ireland appoints new managing director European data centre operator Interxion has announced the appointment of Seamus Dunne as Managing Director of Interxion Ireland. Before joining Interxion, Mr Dunne had various roles at Hewlett-Packard, most recently as Vice President and General Manager with Hewlett-Packard Enterprise.
Louise Phelan appointed Group Deputy Chief Executive at Phelan Energy Group. Louise Phelan, the former vice president of online payments company Paypal, has become group deputy chief executive at Phelan Energy Group. Ms Phelan left PayPal earlier this year after 30 years with the company, the last 13 of which she served as vice president. Ms. Phelan is also a board member at Ryanair.
Irish tax veteran joins football super-agent Jorge Mendes’s team Two Irish companies owned by football super-agent Jorge Mendes have appointed a veteran Irish tax expert as a director. Michael Mullins, a former president of the Irish Taxation Institute, was this month appointed to the boards of Gestifute International, the main Dublin cog of Mr Mendes’s group. He was also appointed as a director of Polaris Sports, another group company that was previously used as part of a tax management strategy for Gestifute. Mr Mullins is a former partner at the Cork and Dublin-based firm Moore Stephens.
Irish Life Investment Managers appoints new director to its board ILIM has appointed Rose McHugh as a non-executive director. Ms McHugh holds a number of directorships including Setanta Asset Management, Brook Foods, Xiu Lan Hotels and the Crawford Arts Gallery. Ms McHugh is a former partner at EY.
Generator appoints new CFO International hospitality company, Generator, has appointed former Datalex CFO, Donal Rooney, as it’s new Chief Financial Officer. Mr Rooney previously worked at Amaris Hospitality and at NAMA where he assumed the CFO remit at both organisations. He is a former Director at KPMG.
New COO appointed at the Construction Industry Federation The CIF has appointed Hubert Fitzpatrick as Chief Operations Officer. Mr Fitzpatrick joined the CIF 16 years ago and prior to his recent appointment as COO he worked as a Director of the organisation. In his earlier career, Mr Fitzpatrick worked at A&L Goodbody.
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.
CMS Distribution distributes a range of peripheral computer equipment and consumer electronics. They trade with in excess of 3,000 businesses and employee c. 350 people across 12 offices in Ireland, China, USA, UK, Sweden, Spain and Australia. In their most recent financial year, the business experienced a drop in revenue of 7.4% to c. £379.5m. However, they were able to grow EBITDA by 23.5% to c. £11.5m after slight gross margin improvement and a c. £700k decrease in administrative expenses. As is typical with margins in a reseller’s model, CMS DIstribution recognised a 3.0% EBITDA margin, up from 2.3% in FY17. Cash at the end of the year was c. £4.3m, up significantly from c. £1.3m a year previous as the business was able to convert much of its EBITDA to cash. CMS Distribution is predominantly owned by Frank Salmon.
Irish School of Motoring (ISM) have been providing driving lessons in Ireland since 1961 and today are a nationwide group offering lessons in vehicles ranging from cars to rigid trucks. They boast a 90% pass rate. In a great year for the business, revenue and EBITDA increased by 32.7% to c. €12.1m and 23.0% to c. €790k respectively. The business employed 351 persons over the year at a cost of c. €9.0m. ISM were not able to convert EBITDA to cash as they recognised a c. €781k decrease in cash at year end. c. €573k was spent on fixed assets during the year. This and significant working capital movements were the primary drains on cash. ISM had net assets of c. €6.2m at the end of FY18 and is wholly owned by Walsh family members John, Patrick and Karl.
MSS Building Services Limited provide a range of products to the construction industry from its base in Ballymount, Dublin. Originally Mupro, the business became MSS Building Services after a 2006 MBO. The business has traded successfully in the period since management became owners and this has continued in FY18 as the business recognised increases in both revenue and EBITDA. Revenue increased by 9.8% to c. €19.1m while EBITDA increased by 4.9% to c. €1.0m. However, the business was not able to convert this to cash as there was a net cash decrease of c. €443k over the year. Purchases of fixed assets totalling c. €1.1m was the most significant drain as the business chose to reinvest profits back into the business. MSS Building Services is owned equally by Darren Kiely and William McDonald.
Who: Enterprise software company Automated Intelligence has secured £1.6m (€1.7m) in funding.
What: The investment is being led by Kernel Capital, comprising a £750,000 (€822,000) investment from the Bank of Ireland Kernel Capital Growth Fund (NI) and backing from private investors. It follows Kernel Capital’s initial funding in 2017.
Why: The company will use the funding to focus on growing its business in new markets in Europe and growing its market presence. It will also invest in development, examining new capabilities requested by its customers. Source: Kernel Capital
Who: Metrifit, a developer of of athlete monitoring tools based in county Louth that was founded by sports psychologist Peter Larkin in 2010.
What: The company has secured funding from Robert Karlsson, the Swedish golfer, as part of an ongoing funding round. Metrifit has raised €1.2m in funding to-date.
Why: Metrifit’s plan is to push on into the US market.
Source: Sunday Business Post
THOUGHT FOR THE WEEK
An elder statesman said during week that he could not believe an Irish punt would buy over 1.15 uk punts today. Put like that, it reminds us of how far sterling has devalued.
When one thinks that a messy brexit could weaken that further it just reminds us to spare a thought for all businesses relying on exports to UK. The biggest problem might not be tariffs or logistics but the currency rate. Let’s hope reason prevails.
The volume handled by the seven main Irish ports in Q1 2019, a year on year increase of 3.0% @CSOIreland
Ireland’s unemployment rate as of July 2019, it’s an overall year on year improvement from the 2018 rate of 5.8%. @CSOIreland
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: