Renatus Weekly M&A & Company Performance Private Equity Newsletter 05/03/2023

Deal Details: Taoglas has been acquired by Graham Partners for  reported $200m.

Taoglas is a Wexford-based tech provider of antennas, advanced IoT components, and custom IoT design services. The business was founded by Dermot O’Shea and Ronan Quinlan. Post-deal, Dermot O’Shea will retain a stake in the business whilst Ronan Quinlan is leaving to focus on developing his new venture, Superfy, in the global smart recycling space. In FY21, the business reported turnover of c. €91.3m which converted to an EBITDA of c. €10.3m.

Graham Partners is a US-based middle-market private investment firm that invests in technology-driven companies.

Advisers:
Taoglas:
Legal: Maples led by Morgan Pierse, Colm Rafferty, Jordan O’Brien, Shane Divilly, Grace Connolly Gusmoes, Vanessa Lawlor, Lynn Cramer, Claire Morrissey.
Financial: Houlihan Lokey.

Graham Partners:
None mentioned.

Renatus Comment: The business has been a frequent feature on our newsletter as it has been an acquisitive player nationally and internationally. Recent deals include acquiring Australia-based Smartsensor Technologies, US-based ThinkWireless, and Dublin-based Firmwave.

Taoglas has gone on an impressive journey starting with one GPS antenna in 2004 to releasing hundreds of new antennas, connectors, cable assemblies, and audio and magnetics solutions. Its advancements in antennas have multiple use cases, enhancing an autonomous vehicle’s connectivity to improve its connection with road infrastructure and other road users and enabling the efficient monitoring of farms and factories. The business is targeting continued growth with Dermot O’Shea targeting $1bn in revenue by 2030 with the support of Graham Partners.

Source: Independent

Deal Details: Glanbia has agreed to sell its stake in the Glanbia Cheese joint venture to its partner Leprino Foods. Up-front cash consideration has been reported to be c. €160m with the possibility of an additional €25m consideration to be paid based on performance.

Glanbia is an Irish food, nutrition and ingredients business, publicly listed in both Dublin and London. Glanbia Cheese is a leader in mozzarella making in Europe, consisting of Glanbia Cheese UK and Glanbia Cheese EU. Glanbia Cheese has manufacturing facilities in Portlaoise, Magheralin and Llangefni in Wales. In FY Dec’22, Glanbia had revenues of €5.6bn, which converted to an EBITA of €347m.

Leprino Foods is a US-based mozzarella manufacturer, estd. in 1950. It originally partnered with Glanbia as part of the Glanbia Cheese joint venture in 2000. It does not report turnover or EBITDA information.

Advisers: None mentioned.

Renatus Comment: This move continues Glanbia’s strategy of focusing on its nutrition basede business, following the sale of its Irish dairy brands to Glanbia Co-op (Tirlán) last April. We have seen several Irish PLCs disposing of non-core divisions in recent week, most recently Dole plc selling its fresh vegetable division to Fresh Express. Interestingly, activist investor Clearway Capital had been calling for restructuring of Glanbia and disposal of this division for the past year. The market responded favourably to this news which was announced along with the company’s annual results, with the company’s share price rising 10.4% from €11.69 on Wednesday morning to a high of  €13.12 on Friday.

Source: Glanbia PLC Press Release

Deal Details: BWG Foods to acquire Tuffy Wholesale for an undisclosed amount. The deal is subject to CCPC approval.

BWG Foods is an Irish wholesale distributor of food and grocery goods to its affiliated stores and stores operated by independent retailers as well as food and beverages to food-service customers and the licensed trade. It was founded in 1963 and is headquartered in Dublin. In FY21, the business reported turnover of c. €1.4bn, which converted to an EBITDA of c. €61.1m.

Tuffy Wholesale is a Sligo-based wholesale business that is part of the Tuffy Group. In FY21, Tuffy Wholesale reported turnover of c. €43.5m which converted to an EBITDA of c. €1.3m.

Advisers: None mentioned.

Renatus Comment: The proposed acquisition of Tuffy Wholesale will see BWG expand its already extensive network in the Irish markets. BWG already operates the SPAR, EUROPSAR, MACE, Londis and XL brands nationwide. This acquisition will see it integrate the wholesale contracts of Tuffy to which include Stonehouse and Gala. The deal comes just weeks after BWG confirmed a €340m four-year contract extension with Maxol, continuing the existing 25 year relationship.

Source: CCPC

Deal Details: Baker Tilly has been acquired by Azets for an undisclosed amount.

The business focuses on accountancy services, and it has over 100 employees serving a portfolio of c. 2,000 clients. The Irish business, headed by Neil Hughes, will immediately rebrand as Azets Ireland. The business does not report turnover or EBITDA information.

Azets is a Norway-based international audit, accounting, outsourcing, compliance, and advisory group, specialising in supporting SME businesses. The business does not report turnover or EBITDA information.

Advisers:
Azets:
Legal: McCann Fitzgerald led by Gary McSharry and including Rachel O’Neill, Ciaran Sweeney, Joshua Kieran-Glennon, Alan Heuston, Caitriona Callanan, David Lydon, Ciara O’Herlihy, Darragh Murphy and Clare Gillett & Shoosmiths LLP (UK).

Baker Tilly:
Legal: Byrne Wallace led by Feargal Brennan, Gillian O Shaughnessy, Laura Sheehan, Colin Bolger, Catherine Cusack and Ciara Ruane.

Renatus Comment: We have seen a surge in professional services M&A in the last 18 months, with deal rationales ranging from the acquisition of strategic capabilities, as was the case for KPMG’s acquisition of construction consultancy firm, KMCS, and EY’s acquisition of IT consultancy firm, Client Solutions, to foreign players looking to expand geographically through Irish acquisitions. Azets acquisition of Bakery Tilly Ireland sees it entering the Irish market for the first time, while the deal provides Baker Tilly Ireland (now Azets Ireland) with access to the network of a growing international services company.

Source: Business Plus

Deal Details: Angoka has acquired R4DARTech. Deal consideration was not disclosed.

Angoka is a Belfast-based developer of Internet of Things (IoT) security technologies to prevent the hacking of autonomous and remotely controlled vehicles and aircraft. Its two primary shareholders are executive chairman Stephen Berry and London-based investment firm Nabla Ventures. It does not report turnover or EBITDA information.

R4DARTech is a Cambridge-based developer of geospatial awareness devices. It is owned by Clement Robertson and Stephen Clark. It does not report turnover or EBITDA information.

Advisers: None mentioned.

Renatus Comment: The rapid growth in remotely controlled devices such as drones will bring with it many associated societal problems, especially when in the hands of bad faith actors. We saw this again this week when, for the sixth time since the turn of the year, flights were disrupted at Dublin airport due to illegal drone activity. R4dar Tech’s geospatial device helps drones navigate and land safely without relying on communication networks or a GPS location, ensuring these devices can still operate safely if third parties attempt to interfere and disrupt communications. With Irish companies such as Manna Drone Delivery at the forefront of innovation in the space, drones will likely become a more common sight here in Ireland, making the suite of technologies that Angoka is developing for drone safety and security all the more relevant.

Source: Business Plus

Deal Details: Brightwater Group has acquired Raretec Recruitment.

Brightwater Group is a specialist recruitment business with offices in Dublin and Cork. CEO Barbara McGrath led a MBO in 2018. In FY Dec 21 the group reported turnover of c. €65.1m which converted to EBITDA of c. €4.0m.

Raretec Recruitment is a Dublin-based recruitment business that specilaises in actuarial roles. It was owned by Jacqui Van Teutem and Patrick Curran. It does not rpeort turnover or EBITDA information.

Advisers:
Brightwater Group:
Legal: RDJ led by Bryan McCarthy and including April Byrne and Sinead Morgan.
Tax: Grant Thornton led by Gerry Melia.

Raretec Recruitment:
Financial: MOB, led by Marc O’Broin and Sean Clancy.
Legal: Doyle & Company led by Caolan Doyle.

Renatus Comment: Since BIL, the MBO vehicle, opened its strategy of creating a leading Irish resourcing group through the acquisition of Brightwater in 2018, BIL has completed multiple acquisitions including PE Global, Vantage Resources, and Alternatives. Interestingly, this latest acquisition sees Brightwater adding specialist expertise in the actuarial recruitment space. Given a flurry of M&A activity in the Irish insurance space in recent times, particularly by foreign consolidators, the demand for talent is undoubtedly on the rise. Acquiring Raretec will give Brightwater greater bandwidth to cater for this demand for talent in the insurance space.

Source: RDJ Press Release

Deal Details: Irish Ventilation & Filtration has been acquired by Lindab.

Deal consideration was not disclosed. Ventilation & Filtration is a distributor of ventilation products to large multi-nationals and mechanical contractors. Its primary shareholders were Paul Mongey, Anthony Humphreys and Kieron Ryan. It does not report turnover or EBITDA information.

Lindab is a publicly-listed, Swedish ventilation company with operations in 20 countries. In FY21 it generated turnover of €950m which converted to an EBITDA of €141m.

Advisers:
Irish Ventilation & Filtration:
Legal: Crowley Millar Solicitors LLP led by Catherine Keane (Real Estate Partner), Bryan Sweeney (Corporate Partner), Neil Millar and Anthony O’Rourke and incorporating J R Sweeney.
Deal Advisory: Cognito Management Consultants, led by Pat O’Sullivan
​​​​​
Lindab:
Legal: Mangan O’Beirne led by Alan Wallace and Jack O’Beirne.

Renatus Comment: This deal further expands Lindab’s presence in Ireland following its acquisition of Thor Duct in 2020. Companies like Irish Ventilation & Filtration make for attractive targets for trade buyers due to the fact revenues are underpinned by maintenance contracts with large MNCs who tend to be sticky customers. Irish Ventilation & Filtration should prove to be a complementary add-on to Lindab’s suite of ventilation services.

Source: Lindab Press Release

Deal Details: SYS Group has acquired Donald P McKenna & Associates, bringing the group’s total AUM to c. €315m.

SYS Group is a financial planning and advisory business headquartered in Nenagh. The business had 2022 revenue of €2.9m, up €0.7m on the prior year. The business’ largest shareholder is CEO, Tony Delaney. The business has AUM of c. €300m.

Donald P McKenna & Associates is a financial planning & advisory firm based in Dublin. The business was founded by Don McKenna in 1999. The business does not report turnover or EBITDA information. It has c. €15m in AUM.

Advisers: None mentioned.

Renatus Comment: SYS Group, which was only founded in 2015, has undergone impressive growth in recent years, having been set up from home by Tony Delaney. 2022 was an important year for the business as it announced a strategic partnership with PGM Financial Services, which had c. €40m in AUM. Given the scale which SYS Group has managed to achieve organically, it seems likely that organic growth will be the primary driver of its path to €1bn, supplemented by a targeted acquisition strategy along the way.

Source: Independent

Deal Details: Fexco has acquired OMC Claims for an undisclosed sum.

Fexco is a financial technology and business services company based in Killorglin, Co. Kerry. Fexco was founded in 1981 by current Chairman, Brian McCarthy. The business had FY Jan 22 revenue of c. €102m, which converted to an EBITDA of c. €8.9m.

OMC Claims is a firm of loss assessors based in Killorglin. The business was founded in 1985 by Dan Owens, with Fexco’s Brian McCarthy joining in 2005. The business does not report turnover or EBITDA information.

Advisers: None mentioned.

Renatus Comment: Having originally been founded in 1985 as a local player in the region, then Des Owens & Company, OMC Claims received investment from Brian McCarthy in 2005 and has since grown to become Ireland’s leading firm of loss assessors. Coming under the Fexco umbrella will enhance OMC’s expansion goals both domestically and internationally.

Source: Sunday Times

ESB in talks with Orsted over off-shore wind investment

Deal Details: The ESB is in advanced negotiations with Danish green energy company, Orsted, to invest in 7 offshore windfarms. This deal follows the loss of ESB’s previous co-investment partner, Equinor, in 2021. The news comes as the department of environment was forced to restrict the location of offshore windfarms. Orsted is the world’s largest operator of offshore windfarms and made nearly $18bn in revenue last year.

Source: Independent

CRH to move its primary share listing to the US

Deal Details: CRH plans to move its primary shares listings to the US. It made this decision as the US is expected to be a key driver of future growth and already account for three quarters of the company’s earnings. The future of the group’s primary and secondary listings in London and Dublin will be announced when the company issues its trading update on April 26th. The company also announced that it plans to spend $3 billion buying back its own stock. CRH’s earnings rose by 13 percent last year despite significant cost inflation over the period.

Source: Irish Times

Trinity Biotech secures increased loan facility

Deal Details: Trinity Biotech, the Nasdaq-listed and Bray-based life sciences firm, has secured an increased loan facility to fund potential M&A. It will see the business increase its existing facility by $5m, while providing a $20m facility to fund potential acquisitions. The  deal is with Perceptive Advisors, an US investment manager.

Source: Sunday Business Post

Humar Limited trading as Marymount Care Centre, is a private nursing home in Lucan, Co. Dublin. It is owned by Fergus, Conor, Niall, Maureen, Eoin and Ciara McNulty.

In its financial year to March 2022 the business generated a turnover of c. €9.8m, an increase of 17.0% year-on-year. This converted to an EBITDA of c. €2.1m, an increase of 27.7% year-on-year. The increase in EBITDA was primarily driven by an improvement in gross margin, which increased by 1.59% year-on-year to 34.29%.

The business finished the year with a cash balance of c. €1.5m, a c. €0.7m increase on FY21. Significant post-EBITDA cash movements included the repayment of bank loans and interest.

The business employed an average of 182 people during the period at a total cost of c. €6.5m.

Portview Holdings Limited is a Belfast-based interior fit-out specialist. The business has worked on high-pro­file projects including Harrods, Harvey Nichols, Issey Miyake, Arsenal and London Stadium. It is majority owned by Simon Campbell and Sean Mcevoy.

In its financial year to November 2022, the business generated a turnover of c. £54.3m, an increase of c. £34m year-on-year. This converted to an EBITDA of c. £3.9m, an increase of c. £6.9m year-on-year. EBITDA improvements are due to increased gross margins and the business realising operating leverage.

Significant post-EBITDA cash movements include payments to acquire tangible assets of c. £0.2m and cash released from working capital of £0.6m. The business finished the year with a cash balance of c. £16.2m, a 37% year-on-year increase.

The business employed an average of 130 people in FY22 at a total cost of c. £8.8m.