Renatus’ Weekly M&A Newsletter – 13/06/2021
June 13, 2021Renatus’ Weekly M&A Newsletter – 27/06/2021
June 27, 2021
Renatus Weekly M&A & Company Performance Private Equity Newsletter 06/06/2021
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
M&A ACTIVITY
Macquarie acquires Beauparc
Deal Details: Macquarie Asset Management, via Macquarie European Infrastructure Fund 6, has agreed to acquire Beauparc Utilities (“Beauparc”) from founder Eamon Waters and Blackstone Tactical Opportunities Fund. The deal consideration has not been disclosed. Completion of the transaction is subject to receipt of customary regulatory approvals.
Panda owner Beauparc, founded by Eamon Waters in 1990, is one of the UK and Ireland’s leading utility corporations. Its businesses serve over 340,000 residential, commercial, electricity and gas customers across a portfolio of 40 waste facilities.
Macquarie Group Limited is an Australian multinational independent investment bank and financial services company.
Macquarie Asset Management (MAM) provides specialist investment solutions to clients across a range of capabilities.
Advisers: TowerView acted as M&A advisor to Macquarie
Renatus Comment: Most of us use Beauparc’s services every day. The business is a fully integrated waste and energy solutions provider with operations across Ireland, the UK and further afield.
In its most recently filed financial accounts to December 2019, Beauparc Utilities Limited reported revenue of €508.4m and EBITDA of c. €66m.
Beauparc is another example of a business which has leveraged strategic acquisitions to achieve strong growth. Notable examples include Irish Packaging Recycling from Smurfit Kappa in 2007, A1 Skip Hire in 2010, Ozo Waste in 2014, Greenstar in 2016, Bioverda in 2017, Scotswaste in 2018 and Yorkshire-based LSS Waste Management in 2020.
Source: Beauparc
Advent acquires stake in Planet
Deal Details: Advent International has acquired part of Eurazeo’s stake in Galway-based fintech Planet in a deal that reportedly values Planet at €1.8bn.
Planet, formerly known as Fintrax, is a provider of integrated digital payment services on a unique single platform that offers acquiring, processing, digital wallets, VAT refund and currency conversion services.
Advent is one of the largest global private equity investors.
Paris-headquartered Eurazeo is an investment company formed by the merger of Azeo and Eurafrance in 2001.
Advent and Eurazeo will co-control Planet following the transaction. They plan to accelerate Planet’s existing strategy, deliver new innovations to customers faster, and further develop Planet’s position as a global leader in integrated payments.
Advisers: None mentioned
Renatus Comment: Planet has experienced exceptional growth in recent times under the leadership of its CEO Patrick Waldron. From its beginnings in Galway in 1985 as a specialist facilitator of VAT refunds for tourists in Ireland, Planet has diversified its service offering and geographical footprint over time. Today it employes 1,500 staff in 64 markets.
The business’s growth was accelerated by the acquisition of Tax-Free Worldwide in 2013, as well as Planet Payments and GB Tax-Free in 2017, after which the entities consolidated under Planet.
With Advent’s recent investment, we expect Planet to continue to go from strength to strength and look forward to following its journey.
Source: Planet Payment
AMCS acquires Dataset Solutions
Deal Details: Limerick company AMCS has announced the acquisition of Dataset Solutions for an undisclosed amount.
AMCS is a global supplier of integrated software and vehicle technology for the waste, recycling and resource industries. It employs 600 people across 11 countries.
In 2018 AMCS received significant backing from the Irish Strategic Investment Fund (ISIF) and Insight Venture Partners which led to the opening of the business’s headquarters in Limerick and which has supported its tremendous recent growth.
UK-registered and Dublin-headquartered Dataset Solutions develops software that assists the routing operations of waste companies. The company had net assets of £89,000 in March 2020.
Advisers: Colm Rafferty and Keelin Gavagan of Maples advised AMCS.
Renatus Comment: AMCS is a world class operator in its vertical. Led by Jimmy Martin, the business powers most of the world’s top-10 recycling and waste companies globally.
Growth has been supported by strategic acquisitions which include Canada-based TRUX Route Management Systems Inc in 2020, US-based waste software specialist DesertMicro in 2018, and Brady Recycling Solutions, a global provider of trading, risk management and settlement solutions to the energy, commodities, and recycling sectors.
Through organic and acquisitive growth, AMCS has grown into a comprehensive, end-to-end provider of waste management solutions. This acquisition of Dataset Solutions looks to be another step in that direction.
Source: Bizplus.ie
ATS acquires CIM
Deal Details: Irish company Control and Information Management Limited (CIM) has been acquired by German-based Process Automation Systems, a subsidiary of Canadian parent ATS Automation Tooling Systems, a manufacturer of automated systems, listed on the Toronto Stock Exchange with a market cap of £1.6bn.
CIM was founded in 2003 by Darrin McCrudden and Eamonn Nally through a management buyout from Siemens Ireland. The company, which is based in Dublin, implements automation solutions in the highly regulated life sciences industry as well as the manufacturing sector and delivers new and upgrade systems for standalone and plant-wide configurations.
Advisers: For CIM shareholders:
Alan O’Driscoll, Laura Melody-Moran and Jonathan O’Beirne from Flynn O’Driscoll acted on the legals. Price Bailey (UK) provided corporate finance advice on the transaction. An RBK team lead by Joey Boland, John Lally and Fiona Murphy provided accounting and tax advice.
For PA Solutions:
Philip Daly and Lisa McEllin of LK Shields Solicitors provided legal advise. Mark Mulcahy (financial, advisory, deals) and Gerry Vahey (tax) at Mazars provided financial and tax due diligence support for the purchaser.
Renatus Comment: Prior to the transaction, CIM was wholly owned by its founding team of Darrin McCrudden and Eamonn Nally. CIM will now operate under ATS’ Process Automation Solutions (“PA”) business.
CIM is another example of a successful indigenous SME that has established a foothold as a world-class provider to multinationals in the Pharma and BioPharma industries. It is a reminder of how beneficial the positioning of multinationals here is for associated supplier industries and how it can promote entrepreneurism and success locally.
Source: ATS Automation; CIM
Smurfit Kappa acquires packaging company in Peru
Deal Details: Smurfit Kappa Group has acquired Cartones del Pacifico, a leading paper-based packaging company in Peru. Financial details of the deal were not disclosed.
Dublin-headquartered Smurfit Kappa Group plc is Europe’s leading corrugated packaging company and one of the leading paper-based packaging companies in the world. It was established as a box-maker in Rathmines, Dublin in 1934.
Cartones del Pacifico, based near Lima in Peru employs 368 people.
The acquisition expands Smurfit Kappa’s footprint in the Latin America, where it already has operations in 12 countries.
Advisers: None mentioned
Renatus Comment: Smurfit Kappa has been on a well-publicised journey to reduce its contribution to waste and emissions. It sees the future of packaging being paper-based due to its recyclable and degradable properties. Cartones del Pacifico is a leading paper-based packaging company in Peru and fits well in Smurfit’s vision.
It is remarkable that Smurfit Kappa is the largest pan-regional supplier in Latin America and reiterates just how much of a success story the business has been. Public markets have reacted positively to the business’ recent developments with the stock price (LON: SKG) returning 4.3% YTD and 108% over the past 5 years.
In its financial year to December, Smurfit Kappa Group plc reported revenue of €8.5bn, EBITDA of €1.5bn and free cash flow of €675m.
Source: Smurfit Kappa
Carechoice acquires Brookfield Care Centre
Deal Details: Leading nursing home operator Carechoice has acquired a 63-bedroom facility in Leamlara, Co Cork in a deal reported to be around €10m.
Brookfield is a purpose built, state of the art facility on a 3.75-acre site.
Carechoice now owns 14 nursing homes with more than 1,300 long-term residential care beds and a total workforce of about 1,600. Carechoice Holdings Limited reported revenues of €49.8m and EBITDA of c. €7.0m in its financial year to December 2019. The business is owned by James Tolan, Fergus Clancy and Gerry Moore.
Advisers: TowerView acted as financial adviser to Carechoice on the transaction while O’Flynn Exhams was legal counsel. BDM Boylan was Brookfield’s legal advisor.
Renatus Comment: The Irish nursing home sector has been one of the most active sectors for M&A in recent years. Trends in Ireland’s aging demographics and limited supply have created demand for the asset class driving acticity for both domentic and international buyers.
Recent examples of activity in the market include CareChoice’s acquisition of Elm Hall nursing home, French-group Orpea acquiring FirstCare and Brindley Healthcare, Aedifica acquiring Bridhaven, among many others.
Source: Irish Times
Smurfit consortium acquire Whakatāne paper mill in New Zealand
Deal Details: Packaging entrepreneurs Dermot Smurfit and Michael Smurfit have led the takeover of a New Zealand paper mill for an undisclosed price.
The Whakatāne Mill will be bought from Swiss packaging company SIG Combibloc. The financial details of the deal were not disclosed.
In March it is was announced that Whakatāne mill will close and its staff will be made redundant by end of June.
The consortium, led by packaging tycoon brothers Dermot and Michael Smurfit, together with other unnamed European consortium members, has extensive experience in owning and operating paper packaging businesses. They have also brought a number of New Zealand in investors alongside them.
Advisers: TowerView acted as financial adviser to Carechoice on the transaction while O’Flynn Exhams was legal counsel. BDM Boylan was Brookfield’s legal advisor.
Renatus Comment: The Irish nursing home sector has been one of the most active sectors for M&A in recent years. Trends in Ireland’s aging demographics and limited supply have created demand for the asset class driving acticity for both domentic and international buyers.
Recent examples of activity in the market include CareChoice’s acquisition of Elm Hall nursing home, French-group Orpea acquiring FirstCare and Brindley Healthcare, Aedifica acquiring Bridhaven, among many others.
Source: Irish Times
Deals in the Making & Other News
Breedon looking at acquisitions in Ireland
Deal Details: British public construction materials group Breedon is reported to be actively seek further Irish acquisitions.
Breedon entered the Irish market in 2018 through €500m takeover of housebuilding and aggregates business Lagan Group. It also owns NI paving and street lighting business Whitemountain.
Source: Irish Examiner
Communicorp’s acquisition by Bauer Media complete
Deal Details: Bauer Media’s takeover of Ireland’s biggest commercial radio group Communicorp has been finalised in a deal reported to be around €100m.
The deal includes Newstalk and Today FM, Dublin stations Spin 1038 and 98FM, Limerick’s Spin Southwest, digital sport station Off The Ball, audio exchange audioXi and aggregated listening platform GoLoud.
Source: Belfast Telegraph
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
Claran Consulting Engineers Limited, based in Cork, is a recruitment solutions provider predominatly focused on the Life Sciences sector.
For the fiscal period ending December 2019, the business experienced a c. 7% decline in revenue to €11.7m while EBITDA increased by c. 18% to c. €760k.
The cash balance increased by c. €184k during the period to end at c. €260k with the large movements coming from working capital investment, loan repayments partially offset by an advance from a subsidiary company.
The business employs a total of 98 staff at an annual cost of c. €4.5m per annum and is owned by AEA International Holdings limited.
Scally Bros Limited trades as Scally’s Supervalu in Clonakilty Cork.
During FY19, the business saw revenue and EBITDA decline by c. 4% and 14% to €20.1m and €0.9m, respectively.
Cash increased by c. €115k during the period to end at c. €160k. The drains on cash were c. €229k in debt repayments, a c. €200k investment into working capital and a dividend payment of c. €112k.
Scally employed a total of 158 employees during FY19 at an annual cost of c. €3.2m and is equally owned by Catriona and Eugene Scally
RECENT FUNDRAISINGS
Who: Shopbox who has a built a software solution for e-commerce businesses. Shopbox’s “Intelligent Shop Assistants” are designed to engage customers from the first click, help customers through key friction points in the shopping journey, resulting in increased engagement, customer conversion and order value.
What: The business has reportedly raised €765,000 in seed funding from private investors, including Gerry Rogers, a former senior executive at Nike and Ikea as well as Paul Kealy from Tony Kealys, which is a seller of prams and nursery furniture.
Why: The specific purpose of the fundraise was not disclosed.
Advisers: Stuart Fitzgerald and the team in Fitzgerald Power provided corporate finance advice as part of the fundraise.
Source: Sunday Independent
Who: Phorest who has developed a software business management solution targeted at spas, salons and related sectors. Its solutions allows for the central management of marketing, customer bookings, staff management and much more. The business has over 7,500 spas and salons as customers across the globe.
What: The business has reportedly raised €15m from incumbent backer Susquehanna Growth Equity. Susquehanna originally backed the business in 2018 when they were a major part of Phorest’s €20m fundraise.
Why: The specific use of the funds was not disclosed but they will likely be used to support Phorest’s continued growth.
Source: The Sunday Times
Who: VIGO Health, a new insurance intermediary. Founded in 2021 by Stephen Loughman and Ruth Bailey, Vigo offers a new way for people to access fast healthcare for their everyday needs through a combination of strong digital healthcare solutions and cash benefits. VIGO Health offers access to over 30 everyday health services under one plan for less than €10 a week on one digital platform.
What: VIGO Health has received investment from Irish Life Group, one of Ireland’s leading financial services organisations.
Why: Irish Life will underwrite the cash benefits of the VIGO cash plan.
Advisers: John Sheridan of Clearwater International Corporate Finance advised VIGO Health on the investment from Irish Life.
Source: Clearwater International, RTE
Who: Cork-based data security company GetVisibilty, founded in 2018 by Ronan Murphy and Mark Bronan, secured investment.
What: The €2.1m round was led by former Eir chief executive Herb Hribar, who is to become chairman of GetVisibility. Sure Valley Ventures, Enterprise Ireland, Smarttech247, Pires Investment and others also participated bringing the total investment to date to €3.1m.
Why: This investment will help accelerate growth of customers and technology.
Advisers: Alan Ryan of Wallace Corporate Counsel acted as legal adviser to lead investor.
Source: Irish Times
Who: Kingspan completes new credit facility.
What: €700m revolving credit facility is agreed with a syndicate of 10 banks.
Why: The financing would be used for general corporate purposes.
Source: Irish Times
Who: Shannon-based medical technology firm PBC BioMed is to lead a consortium for OsStic project which aims to revolutionise the treatment of complex osteoporotic bone fractures.
What: The project has raised €5.4m in total of which €3.4m is awarded from the Government’s Disruptive Technologies Innovation Fund (DTIF). The remaining €2m will be provided by industry partners.
Why: The funds will be used for product development.
Source: Irish Examiner
Who: Bobbie, an Irish co-founded baby formula start-up has raised funding.
What: $15m (€12.4m) Series A funding round was led by VMG, a San Francisco-based private equity firm that earlier this year closed a new $850m fund.
Why: The purpose of the funding was not disclosed.
Source: Irish 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
A story that broke yesterday too late for the Sunday papers
The FT have reported that:
“The G7 advanced economies have struck what they have termed a “historic agreement” on taxing multinationals in a bid to create unstoppable momentum for a global deal.”
Corporation tax accounted for €11.8bn (21% of net tax receipts collected by the Irish Revenue) for 2020 .
The top ten companies accounted for half of this.
The tax harmonisation may have a short term hit where profits are not channeled through ireland and long term where less multinationals may invest in growth or new establishments without having a tax advantage.
@RenatusCapital Tweets
17.9%
The year-on-year increase in the new car registrations in Ireland for the year to May 2021 amounting to 61,147 new cars sold. Comparing 2021’s numbers to pre-pandemic 2019, the number of new car sales was 22.9% lower, according to @SIMI_IE
8.4%
The year-on-year increase in the average weekly earnings in Ireland for Q1 2021, amounting to €867.52 per week. This represents average earnings of people in employment and includes those supported by the EWSS, according to @CSOIreland
21%
The year-on-year decrease in the Irish building and construction output for Q1 2021, according to @CSOIreland
331.2% & 310.4%
The year-on-year increase in the Irish overseas passenger arrivals and departures, respectively, for April 2021. Comparing 2021’s numbers to pre-pandemic 2019, the respective figures for April 2021 were 95.9% & 95.8% lower than in 2019, according to @CSOIreland
64.1
The AIB Ireland Manufacturing PMI for May 2021, the highest level since the records began in 1998, indicating a rapid improvement in manufacturing business conditions. @IrishTimes
47%
The year-on-year increase in the Irish credit and debit card spending for April 2021 amounting to an annual increase of €2bn, according to @IndoBusiness
98.3% & 107.5%
The year-on-year increase in the Irish mortgage approvals by volume and value, respectively, for April 2021 amounting to 4.362 mortgages valued at just over €1bn April was the first full month of the pandemic in 2020 which created a lower base value. @BPFINews
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ABOUT RENATUS
Renatus was established in 2014 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 typically in the range of €5m – €20m. Our typical solutions include:
- Succession planning
- Management buyouts
- Management buy-ins
- Growth financing – both organic and acquisition growth financing
- Full and partial share sale.
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