Renatus Weekly M&A & Company Performance Private Equity Newsletter 05/02/2023

Deal Details: Dole PLC is selling its fresh vegetables division in the US to Fresh Express, a subsidiary of Chiquita Holdings. Deal consideration is reported to be c. $293m and is subject to regulatory approval.

Dole PLC is a global leader in fresh fruits and vegetables. The business was formed in 2021 through the merger of Dole Foods and Total Produce. In FY Dec 21, the business reported Pro Forma turnover of c. $9.3bn which converted to an adjusted EBITDA of c. $393.6m. In FY Dec 21, the Fresh Vegetables Division reported revenue of $1.28bn.

Chiquita Holdings Ltd is the parent of  an international  distributor of  bananas and pineapples, as well as vegetables and salads sold primarily in the United States under the Fresh Express brand name. In FY Dec 21 it reported turnover of c. $3.4bn which converted to EBITDA of c. $219m.

Advisers: None mentioned.

Renatus Comment: The stock market responded positively to this move with Dole’s share price up 7.4% from $10.70 at announcement to $11.49 by Friday 3rd February. The company will use the proceeds generated from the disposal of this division to strengthen its balance sheet. It will now direct its focus on its fresh fruit and diversified produce offerings which should yield strong returns.

Source: Dole PLC Press Release

Deal Details: Connexicon Medical has been acquired by Advanced Medical Solutions Group PLC (“AMS”) for a reported €25m consideration.

Connexicon Medical is a manufacturer of adhesives and sealants, based in Dublin. It was established in 2014 by Padraig Leamy. The business does not report turnover or EBITDA information.

Advanced Medical Solutions Group PLC is a global manufacturer and distributor of wound care, surgical and wound closure products. It was established in 1991 in Chesire, UK. In FY Dec 21 the company reported turnover of c. £108.6m which converted to c. £31.8m EBITDA.

Advisers:
Advanced Medical Solutions Group:
Legal: Philip Lee led by Jonathan Kelly and Inez Cullen.

​​​​​​Connexicon Medical:
None mentioned.

Renatus Comment: AMS has invested over €50m in acquisitions in the past 4 years, buying companies in Austria, France, the UK and Israel. Connexicon Medical should prove to be a highly complementary addition to AMS’ existing product offering.

Irish firms on the medical device/pharma value chain continue to be sought after assets for international acquirers. Post-pandemic, near-sourcing has become cooler, with certainty and risk ranking higher than price. We would expect to see more of these type of  deals in the coming months.

Source: Cap IQ

Deal Details: Sandvik has acquired a 95% stake in Premier Machine Tools (“PMT”). Deal consideration was not disclosed.

PMT is a Kildare-based supplier of CNC Machine Tools and carbide cutting tools to the manufacturing and metal cutting sector in Ireland. The business was owned by Ciaran Dillane and Catherine Murran. In FY Dec 22, the business had reported turnover of c. €10.6m.

Sandvik is a Swedish engineering group which specialises in providing equipment and digital solutions to improve productivity in manufacturing, mining and infrastructure. In FY Dec 22, the business reported turnover of €10.6bn which converted to an EBITDA of c. €2.4bn.

Advisers:
PMT: 
Legal: RDJ led by Diarmaid Gavin, Maria Walsh and Marie Jennings (Corporate and Commercial); Mark Barrett, Mark Ludlow and David Rodgers (Tax); Sinead Morgan (Employment) and Georgina Wallace (Real Estate).

Sandvik:
None mentioned

Renatus Comment: PMT was founded in 2000 and customers include sub-contract, medical, aerospace, toolmaking, and high-precision machining industries. The acquisition of PMT is a strategic move by Sandvik to expand its medical manufacturing capabilities. The broad spectrum of services and the full machining process from design to verification will enhance Sandvik’s capabilities globally.

Source: Sandvik Press Release

Deal Details: James O’Brien & Co has merged with Roberts Nathan.

Roberts Nathan is a Cork-based accounting firm established in 1997.

James O’Brien & Co is a Cork-based accounting business. It does not report turnover or EBITDA information.

Advisers: None mentioned.

Renatus Comment: Post-merger, James O’Brien & Co will trade under the Roberts Nathan name. It is reported that the group expects annual revenue of c. €6m as headcount will total c. 55 in Cork and Dublin. All senior staff will be retained in the merger as it will benefit from increased scale and resources. One would expect to see a lot more deal activity in the accountancy and legal industries in the years ahead, as professional services consolidation is inevitable.

Source: Irish Times

Deal Details: Frankie Health has been acquired by Unmind. Deal consideration was not disclosed.

Frankie Health is a Dublin-based mental health platform founded in 2020 by James McGann and Seb Poole. The business does not report turnover or EBITDA information.

Unmind is a UK-based platform focused on rethinking mental health. It was founded in 2016 by Nick Taylor. In FY21, the business reported turnover of c. £6.2m.

Advisers:
Frankie Health:
Legal: LK Shields (led by Jennifer McGuire and James Byrne) and Morgan Lewis (UK).
Deal Advisory: Key Capital led by Richard Tunney.

Unmind:
Legal: Cooley LLP.

Renatus Comment: This deal follows Frankie Health’s 2021 fundraise in which it received $1.25m to fuel expansion. Following this transaction, a new product named Unmind Talk will be launched to help employees access mental health and wellbeing support, enabled by Frankie Health’s technology. It uses machine learning to deliver personalised mental health support to remote teams.

Source: Irish Times

Deal Details: Cork City FC has been acquired by Dermot Usher.

Cork City FC is an Irish football club established in 1984. The club was relegated from the League of Ireland Premier Division in 2020 but secured promotion back to the first tier in 2022. This takeover deal follows the attempted sale to Preston North End owner Trevor Hemmings, who unfortunately passed away in 2021.

Advisers:
Dermot Usher:
Financial: Crowe led by Naoise Cosgrove, Eimear Grier and Darren Roche.
Legal: Pinsent Masons led by Gerry Beausang, Conall Ennis, Lisa Matthews and Trevor Watkins.

FORAS:
Legal: O’Mahony Farrelly O’Callaghan  led by  Dan Leahy.

Renatus Comment: Brian O’Sullivan, founder and owner of Zeus Packaging, was invited by Cork Chamber President Ronan Murray to speak at the annual Chamber dinner in City Hall on Friday night. He told his inspirational story of how he created one of Europe’s foremost packaging companies and left the room speechless. He is one of the many de
dicated followers of Cork City and spoke passionately about how proud he was to sponsor the club.

Source: Cork City FC Press Release

Stripe in talks over potential $2.5bn investment

Deal Details: Stripe, the multi-billion dollar payments firm led by Irish brother John and Patrick Collison, is reportedly in talks regarding a $2.5bn investment led by US venture capital firm Thrive Capital. The news comes on the back of reports last week that the company has brought in Goldman Sachs and JP Morgan Chase to advise on its options regarding a potential IPO in the next twelve months. The funding round would value Stripe at between $55bn – $60bn, a significant fall from the $95bn valuation it earned following its last fundraise, two years ago.

Source: Business Post

Air Nostrum and CityJet reactivate merger process

Deal Details: Originally announced back in 2018, talks have resumed merging Spanish regional airline Air Nostrum with Irish carrier CityJet to form Europe’s largest regional operator. The deal had previously been put on hold with the arrival of the Covid-19 pandemic. The European competition regulator had already approved the merger but due to the amount of time that elapsed, an updated application must now be submitted.

Source: Aviation Week

Brera Holdings PLC Launches Nasdaq IPO

Deal Details: Brera Holdings PLC is the holding company of Italian soccer club Brera FC, the ‘third club of Milan.’ It has completed its $7.5m Initial Public Offering on the Nasdaq. The company has said that it  intends to use proceeds raised to develop a portfolio of football clubs in emerging markets including South America, Africa and Eastern Europe.

Advisors: Philip Lee, led by Andreas McConnell and Anna Hickey.

Source: Philip Lee Press Release

Dunnes Stores nears deal to acquire Buymie

Deal Details: It has been reported that Dunnes Stores has neared a deal to acquire Buymie, an on-demand grocery delivery service. The firm was founded by Devan Hughes, Gabor Krasznai, and Art Sokhikyan. It had previously raised €18m from investors but subsequently got into financial difficulty and owes its creditors a sum in the region of €600k. Dunnes has declined to commit to keeping the entire 300+ people who work at the firm.

Source: Business Post

McLoughlin & Sons Hardware Holdings Limited is a 3rd generation family business that distributes garden, homeware and associated products to the retail trade. It is based in Finglas, Co. Dublin. It is owned by Kieran and Padraig McLoughlin.

In its financial year to Dec 2021 the business generated turnover of c. €20.5m, an increase of 14.7% year-on-year. This converted to c. €3.1m EBITDA, an increase of 37.7%. The increase in EBITDA was primarily driven by the business’ increased turnover figure year-on-year.

The business finished the year with a cash balance of c. €0.3m, up from a negative cash balance of c. (€0.6m) in FY21. The primary cash outflows related to working capital investment.

The business employed an average of 43 people during the period at a total cost of c. €2.2m.

E. Murphy Motors Limited is a Monaghan based car dealership. The business is majority owned by Edward Murphy.

In its financial year to March 2022, the business generated a turnover of c. €48.0m, an increase of 64.6% year-on-year. This converted to an EBITDA of c. €2.6m, an increase of 62.6% year-on-year.

Significant post-EBITDA cash movements include repayment of bank loans of c. €2.7m and proceeds of new bank loans of c. €3.0m. The business finished the year with a cash balance of c. €2.1m, a year-on-year increase of c. 61.6%.

The business employed an average of 56 people in FY21 at a total cost of c. €2.8m.