Renatus’ Weekly M&A Newsletter – 11/10/2020
October 11, 2020Renatus’ Weekly M&A Newsletter – 18/10/2020
October 18, 2020
Renatus Weekly M&A & Company Performance Private Equity Newsletter 04/10/2020
Dear Reader,
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.
Renatus investment company Boojum continue to evolve their proposition in line with the new trading environment. Having built out an industry leading digital platform which is now a key driver of sales, Boojum are now focused on building on the early success of their new meal kit channel. The meal kits contain all of the same restaurant quality ingredients that made the Boojum burrito the second most ordered menu item in the world on Deliveroo, now packaged up ready to create a new at home cooking experience. The meal kits have a consumer facing side at shop.boojummex.com, but they are now starting to see real traction on the corporate side.
Boojum are working with a range of innovative and forward thinking companies (large and small) to deliver meal kits right across the island of Ireland from Portrush to Kinsale and anywhere in between. The kits are part of many different types of projects including employee wellbeing/engagement, employee incentives, new intake engagement, corporate gifts, customer appreciation, staff parties, team building events and even family fun days. With Christmas fast approaching and large group bookings challenged by the new hospitality regulations, the meal kits can fill a gap by delivering a restaurant quality experience straight to people’s homes in place of the normal staff night out. Order sizes have ranged from 5-500. Boojum will take care of all of the logistics allowing companies to tackle the challenge of having teams or customers spread across the country.
To get a feel for the product please view the video below:
Boojum would love to work with you on your project. Please contact julie@boojummex.com if you would like more information.
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
M&A ACTIVITY
New York-based Private equity fund acquirers AA Ireland
Deal Details: Olivier Sarkozy-led private equity fund, Further Global Capital Management has acquired a controlling stake in AA Ireland, the roadside assistance and insurance intermediary company for an undisclosed amount.
The deal marks an exit for Cardinal Carlyle Ireland Fund and Caryle Global Financial Services Partners, who acquired the business from AA plc for €156.6m in 2016.
Established in 2017, Further Global Capital Management is a New York-based Private equity fund led by former French president Nicolas Sarkozy’s half-brother Olivier Sarkozy.
AA Ireland is one of Ireland’s leading consumer services businesses – specialising in Home, Motor and Travel services and insurance. It has more than 500k customers and provides emergency rescue and breakdown cover for people in their homes and on the road, as well as providing insurance for more than 200,000 customers.
Advisers: AA was advised by Key Capital (Corporate Finance) which was led by Jonathan Dalton along with A&L Goodbody (Legals).
The buy side was advised by KBW (Corporate Finance) along with Dechert & Arthur Cox (Legals).
Renatus Comment: This exit follows other successful exits for this fund including GSLS, Payzone and Lily O’Briens. In each case Cardinal Carlyle Ireland helped the companies achieve further potential and management teams enjoyed both the journey of growth and the destination of success with a nice equity return pot also welcome by all.
Source: Irish Times, AA
Mainport acquires stake in Alpha Marine
Deal Details: Irish Mainport Holdings has acquired a share of Alpa Marine for an undisclosed sum.
Cork-based shipping company, Irish Mainport, operates three tugs in the Shannon estuary, provides a dedicated supply vessel at the Kinsale Natural Gas Field, as well as ship agency and stevedoring operations in Cork and Limerick.
Internationally, Mainport operate seismic support ships in worldwide trading, and has significant interests in fast crew boats and anchor handler ship in Malaysia and Australia.
Mainport also announced its entry into the Offshore Wind Sector with its investment in a 50 metre Survey and Research Ship, the Mainport Geo.
Advisers: None mentioned.
Renatus Comment: The market value of the Irish Energy, Sustainability and Natural resources market is expected to growth to $4.1bn by 2020 with a total CAGR of 2.65%. With many of the leading Energy firm committing to investing almost €6bn in to Irish sea wind projects over the next decade there will certainly be demand for specialised prospecting services.
Source: Alpha Marine
Connect Total Communications is acquired by Radius Payment Solutions
Deal Details: Radius Payment Solutions has acquired Northern Irish telecoms business Connect Total Communications. The deal consideration was not disclosed.
Connect Total Communications, founded in 2007 by Matthew Brown, is a business telecoms provider headquartered in Belfast. Its products and services include landlines and mobiles, business broadband and IT apps, which it delivers as a unified communications solution for its business customers.
Radius Payment Solutions is a diversified provider of B2B services including telecoms, fuel cards, vehicle tracking and insurance company headquartered in Cheshire, UK.
Advisers: The acquisition was supported by Ernst and Young with financial due diligence and with legal support from Addleshaw Goddard.
John McGuckian and Brendan Donnelly led the team at Tughans acting for Connect Total Communications.
Renatus Comment: We know Matthew Brown well here in Renatus for a number of years in Renatus and he epitomises what is needed in an entrepreneur namely vision and energy.
Every 2 years he set himself and his team stretch targets and they exceeded them every time and deserve every bit of success they got.
Source: Ireland Connect Total Communications’ Press Release
Java Republic acquires The Island Beverage Company
Deal Details: Irish coffee roaster and distributor Java Republic has acquired Co Cork-based The Island Beverage Company.
The company, which was founded in 2004, is the exclusive distributor for Java Republic in Cork, Kerry and Limerick regions. No financial consideration was disclosed however the existing management team and all employees are set to join Java Republic.
Advisers: David Swinburne (financial advisory services) and Sinead McNamara (legal services) of FitzGerald Legal & Advisory acted for the shareholders of The Island Beverage Company.
Renatus Comment: Spanish coffee company Cafento acquired a majority stake in Java last year. Founded 21 years ago by David McKernan, Java is one of Ireland’s best-known coffee roasters having brought the world’s first carbon neutral roastery to Ireland to supply coffee to supply c. 1,200 offices, hotel groups, cafes and corporate catering services.
David was a guest speaker at The Real Deal 2019 held last year where he spoke in the ‘Deals of the Year’ discussion. Hear about how he sold Java Republic here:
David McKernan @ The Real Deal 2019
Source: The Irish Times
Energy giant EDF acquires Wexford Solar
Deal Details: French energy giant, EDF has acquired Wexford Solar in a deal to build eight solar farms around Ireland with capacity to generate up to 100 megawatts (ME) of electricity. The financial consideration of the deal has not been disclosed. However, industry experts estimate the cost of building solar farm of that calibre would be around c. €110m-€115m.
Wexford Solar Ltd were the first company in Ireland to recognise the potential renewable energy supply that could be gained by introducing Solar into Irelands renewable energy mix.
This is part of EDFs expansion plans to ramp up its presence in Ireland. CEO Matthieu Hue believes that acquiring Wexford Solar marks an important addition to the groups Irish business. Wexford solar already have received planning permission for four of the plants, which EDF intends begin construction on them in 2021.
Advisers: None mentioned.
Renatus Comment: Ireland has one of the lowest installed solar PV capacity in Europe. In renewable energy used for heating, solar contributed c. 5% while it only contributed 0.1% of renewable electricity generated. Ireland has ambitious renewable energy targets and solar will likely play a larger role in future. The State has incentivised the private sector through SEAI administered grants, by relaxing planning permission rules on the installation of panels of residential homes and the regulation requiring an element of renewable energy being installed on all new builds.
Source: Irish Times, Wexford Solar, SEAI
Irish PR agency boss completes MBO
Deal Details: Siobhán Molloy, MD of public relations group Weber Shandwick has bought the business out of the ownership from multinational communications group Interpublic.
No financial consideration has been disclosed however both independent groups say they will continue to operate as partners in the Weber Shandwick worldwide network.
Siobhán’s counterpart in Northern Ireland, Ross Williamsom has done the same north of the Border.
Advisers: None mentioned.
Renatus Comment: This follows the same theme of a deal reported a few weeks where Anne-Marie Curran and her team bought Drury Porter Novelli which now trades as Drury Communications.
Source: The Irish Times
Apex Scientific Ltd acquired by Arch Sciences Group
Deal Details: Kildare-based Apex Scientific Ltd has been acquired by Manchester-based Arch Sciences Group for an undisclosed sum.
Based in Maynooth, County Kildare, Apex Scientific provides high quality products, application services, after sales service, customer support and training to the pharmaceutical, biotechnology and healthcare industries, as well as academic laboratories in Ireland.
Arch Sciences Group is a portfolio company of Limerston Capital Partners I and this is a bolt-on acquisition for them that expands their product suite and geographical reach.
Advisers: Arch Sciences Group received Corporate Finance advice from a Grant Thornton team of Jim Mulqueen and Fiona McGuire.
Renatus Comment: Directors of Limerston Capital noted that this acquisition would grant access to the EU market. This may be one of many future acquisitions we see by UK-based companies into EU-based companies post-Brexit to secure freedom of trade in the EU.
Source: Arch Sciences Group
DEAL UPDATES
Madison Dearborn to acquire IPL Plastics
It is reported that IPL Plastics’ shareholders have voted to accept US investor Madison Dearborn’s Can$555m (€356m) offer for the company.
Led by chief executive Alan Walsh, IPL makes everything from wheelie bins to yoghurt cartons. The company has factories in the Republic, Canada, the US, the UK, Europe and China.
The deal would end speculation about the future of IPL, which had been earmarked as a possible takeover target in May as the value of its shares on the Toronto Stock Exchange declined.
Source: Irish Times
EXAMINERSHIPS/RECEIVERSHIPS
Keating Construction applies for examinership
Clare-based Keating Construction has applied to the High Court to enter voluntary examinership.
The business has offices in Dublin and Clare, employing c. 200 people nationally. It had specialised in complex marine construction projects in the UK&I. The business pointed to Covid-19 as a significant factor in it having to enter examinership.
Source: Sunday Independent
New Look seeking examinership
The parent company which controls the operations of 27 New Look retail stores in Ireland is reportedly seeking the protection of examinership following the impact of Covid.
The business is facing pressure from a number of landlords which are opposing the appeal. This case will be the first of many we expect between tenants and landlords as the long tail of Covid continues to impact traditional brick-and-mortar retail.
Source: Business Post
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 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.
Based in Cork, Cascade Designs Limited is a company that manufactures and supplies self-inflating air mattresses and other outdoor camping accessories. Some of its well-known brands include; Thermarest, MSR, Platypus, PackTowl, SealLine.
In its latest fiscal year, the company saw revenue increase by 5.1% to c. €37.8m while EBITDA also increased by 5.4% to c. €1.6m. Turnover by geographical market in FY19 was Europe (c.96%), Ireland (c.1.5%) and Rest of the World (c.3%). Gross margins increased c. 2% to c.17% during the period. Administrative expenses increased by c. 22% to c. €5.4m in FY19.
The company had a net cash decrease of c.€1.3m in FY19 leaving an ending cash balance of c.€2.8m. The most significant drain on cash was €1.5m classified as “cash advances and loans granted” and €436k spent on CapEx.
The company employed an average of 92 employees in FY19 at a total cost of c.€5.2m. The company is a subsidiary of Cascade Designs inc in the US. John David Burroughs is a majority shareholder of Cascade Designs.
Based in Mallow, Daf Truck Services Cork is the main dealership for the DAF range of commercial vehicles in the south-west of Ireland. They sell new and used trucks, parts and accessories and also operate a full workshop, including DOE testing, from its Mallow Road premises.
In its latest fiscal year, the company saw revenue increase by 3.7% to c. €29.7m while EBITDA increased by 42.2% to c.€2.5m. This was mainly due to the large depreciation expense recorded in FY19.
The company had a net cash increase of c. €271.5k in FY19 leaving an ending cash balance of c. €937k. The most significant cash movements were the loan repayments of c. €1.8m and the c. €939k spent on motor vehicles and hire fleet vehicles.
The company hired an extra 8 people in FY19 bringing the total headcount to 43 employees at a total cost of c.€2.0m. The business is owned by DAF Distributors Ireland Ltd (36%), Patrick Ferriter (30%), Executors of Estate of Conal O’Brien (18%) Tommy Smith (12%) and Stephen Ferriter (4%).
Glanmire Supermarkets Limited trading as Ryans SuperValu Glanmire operates a retail supermarket within the SuperValu chain at Crestfiled Centre, Glanmire, Co. Cork.
In its latest fiscal year, the company saw revenue decrease slightly by 2.3% to c. €27m while EBITDA also decreased by 2.8% to c. €1.4m. Gross margins remained steady at roughly c. 25%. Administrative expenses remained at c.€6.1m.
The company had a net cash increase of c.€320k in FY19 leaving an ending cash balance of c.€1.4m. The most significant movements in cash were the c.€394.4k in Loan repayments and the c.€287.5k spent on Fixed assets. At the end of the period there were c. €2.5m in loans on the balance sheet.
The company employed an average of 205 people in FY19 at a total cost of c. €3.6m. William G. Ryan and Diane Ryan together own 100% of the company.
RECENT FUNDRAISINGS
Who: Irish Online verification company ID-Pal, founded in 2016 by Colum Lyons, has raised funds.
What: €1m fundraise was led by Act Venture Capital, a number of private investors also participated.
Why: The funding will be used to invest in the company’s operations as it eyes international growth opportunities.
Source: Irish Times
Who: Irish legal services ‘disrupter’ business Johnson Hana, founded by Dan Fox in 2016, has secured funding.
What: The funding round consists of €3m in equity and a €500,000 debt facility from Ulster Bank. Other equity backers include John Ryan, a partner with PWC in Hong Kong, UK software entrepreneur Finlay Ross and Tom Hickey, the former CFO at Tullow Oil and Cartrawler.
Why: The money will be used to support growth in Ireland and expansion to the UK and US.
Source: Independent
Who: Sisu, an Irish doctor-led cosmetic treatment chain, has secured investment.
What: $5.5m (€4.7m) round was backed by Greycroft, San Franciso-based venture fund Bullpen Capital, Zynga and long-time investors Voxpro founders Dan and Linda Kiely are also onboard.
Ronan Daly Jermyn Corporate Partners Sean O’Reilly and Gillian Keating and Tax Partner Mark Barrett advised on the transaction supported by Aidan Burke and Kate Murphy.
BKK Advisory Partner Dermot O’Kelly led the financial due diligence with support from Colm O’Brien on tax due diligence.
Why: The new funding is believed to be used for international expansion.
Source: Irish Times
Who: Irish online payments company Stripe has recently participated in two big funding rounds.
What: Stripe led a $12m Series A round for the Philippines-headquartered online payment platform, PayMongo.
It is also one of 11 investors investors to back Stedi, a US data interchange company, which has just raised $50.1m (€43m).
Why: Stripe, founded in 2010 by the Irish Collison brothers, is becoming a known investor in the promising start-ups across the globe.
Source: Irish Times
Who: Dublin and London listed VC firm Draper Esprit has raised funding via share placing scheme. The firm has deployed £450 million of capital and realised £211 million of investments since it went public in 2016. It is a big backer of Irish high-growth tech companies such as CurrencyFair and Roomex.
What: £110m (€120m) was raised through the placing of shares. Goodbody, led by Don Harrington and Charlotte Craigie acted as Global Co-ordinator, Joint Bookrunner and Corporate Broker on a successful equity placing for Draper Esprit.
Why: This funding’s was carried out as it is looking to raise additional fund to increase its rate of investment to £120m a year. The firm has said that it will continue to back the Earlybird fund, in which it partners with a German VC of the same name.
Source: Irish Times
Who: Arvoia, Kerry-based technology company focused on behavioural data analysis and insights. The business analyses and predicts consumer behaviour across a number of industries.
What: The business is reported to be planning to raise c. $24m over the coming months.
Why: The business intends to grow its data platform and intends to expand staff numbers from 35 to 108 over the next 19 months. Arvoia is currently in the process of opening an office in Dubai.
Source: Sunday Independent
Who: Music and advertising ProTunes has reportedly raised funding. ProTunes claims to simplifies music discovery, licensing and rights management within its innovative one-stop platform.
What: The business has raised a reported €250,000.
Why: The fundraise, which was run by BDO, is a seed round which is being reported as being a precursor to a larger and formal Series A round next year.
Source: The Sunday Times
Who: Lough Ree Distillery has reportedly received investment. The Longford-based distillery was set up by the Clancy family and produces gin, whiskey and vodka.
What: American businessman Dirk O’Hara has reportedly invested €250,000 in the business. Mr. O’Hara has a number of ventures in the Texas and Oklahoma region in the US, primarily in the nursing home, elder care and funeral home industries.
Why: The use of the funds was not disclosed.
Source: Business Post
Who: Innovative Catheter Solutions has reportedly raised finance. The business is an indigenous medical device firm focused on the development of novel catheter equipment.
What: The quantum of finance raised has not been disclosed but that it came from former Novate executive Paul Gilson. The business is reportedly also backed by Helen Ryan, formerly of Creganna and now Enterprise Ireland, as well as Ian Quinn and Bernard Collins.
Why: The use of funds have not been disclosed.
Source: The 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 Real Deal 2020 – Save the Date – 15th October 2020 at 11am.
We are delighted to announce that Pat McCann, CEO of Dalata Hotel Group will be joining Matt Cooper for The Real Deal 2020 Webinar.
Register at Eventbrite to learn all about building a huge business from scratch in a recession, how to war-game through Covid, Brexit and more: https://go.renatus.ie/e/
@RenatusCapital Tweets
14.7%
The COVID-19 adjusted unemployment rate (if all claimants of the PUP were classified as unemployed) for September 2020 amounting to 126,200 persons, according to @CSOIreland
83.9% & 85%
The year-on-year decrease in the overseas arrivals and departures to Ireland, respectively, for August 2020, however month-on-month figures are indicating slow recovery with respective increases of 59.2% & 19.2%, according to @CSOIreland
9.1% & 6.8%
The year-on-year increase in the Irish retail sales volume and value indices, respectively, for August 2020 with the most notable volume changes in Electrical Goods (+26.5%) and in Bars (-42.9%), according to @CSOIreland
60.7
The KBC Bank Ireland’s consumer sentiment index for September 2020, a 1.8% gain on the August figure and well above the April low of 42.6, according to the survey of 1,000 adults by Core Research. @IrishTimesBiz
ABOUT RENATUS
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:
- Succession Planning
- Management Buyouts / Buy-Ins
- Funding for organic growth
- Acquisition Funding; and
- Share Sales
OUR INVESTMENTS
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Renatus’ Knowledge Centre
Our Knowledge Centre is filled with insights from some of Ireland’s top business leaders on Succession Planning, Management Buyouts / Buy-Ins, Growth Financing and much more.
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