Renatus’ Weekly M&A Newsletter – 13/09/2020
September 14, 2020Renatus’ Weekly M&A Newsletter – 20/09/2020
September 20, 2020
Renatus Weekly M&A & Company Performance Private Equity Newsletter 06/09/2020
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.
M&A ACTIVITY
CRS receives investment from Renatus Capital Partners
Deal Details: We are delighted to announce that Renatus Capital Partners has made a significant minority investment in CRS Mobile Cold Storage to support CRS’s exciting growth plans.
CRS, founded in 1992, is led by brothers John and Patrick Tyrrell. The business is a market leader in the provision of modular temperature-controlled storage solutions to the food and pharmaceutical sectors. Headquartered in Co. Meath, it provides solutions to blue chip clients across Ireland, the UK and mainland Europe.
Former Suretank CEO John Fitzgerald is joining the board as non-executive Chairman and is investing into the business alongside Renatus.
This is Renatus’s fourth investment, and the first from its new €35m fund. This new fund is focused on providing supportive equity capital to ambitious Irish SMEs.
Click here to visit the website of our new partner CRS Refrigeration.
Deal Execution Team:
A Renatus team of Brendan Traynor, Philip Gardiner and Kyle Barry led on the execution of the deal.
Renatus was advised by Emmet Scully, Lisa McElin, Andrew Power, Ruairi Mulrean and Gillian Dully of LK Shields (legals), Mike Hayes, Sinead Kelly and Aoife Kennedy of KPMG (tax due diligence) and Rodney McCaughey of HNH (financial due diligence).
Eamonn Hayes and Tracy McNulty of Capnua (corporate finance), John Gilmore Gavin of BDO (tax), a team led by Shaun O’Shea and Deirdre Cahill of Beauchamps (legals) and KPMG (vendor due diligence) advised CRS.
Comment: CRS’s talented management team has positioned the business as a market leader in its space by being customer-focused, uncompromising on product quality and service, and creative in finding the right solutions to meet their customers’ needs. Renatus is delighted to partner with John and Patrick, and provide the financial and strategic support to help accelerate their UK and European growth ambitions.
Source: CRS Press Release
Uniphar agrees to acquire Hickey’s
Deal Details: Dublin and London-listed medical supplies company Uniphar is to acquire the Hickey’s pharmacy chain for an undisclosed sum. The deal is subject to an approval by the Competition and Consumer Protection Commission.
With 36 outlets, Hickey’s is one of the largest independent pharmacy chains in Ireland. It opened its first outlet in 1995 and now employs over 350 people.
Hickey’s is led by MD Patrick Hickey. In 2018, the group reported revenues of €49.5m and EBITDA of c. €5.2m.
Advisors: Eamonn Hayes, Jamie McConnell and Gareth Molloy of Capnua advised Uniphar on the corporate finance side and a William Fry team, led by Barbara Kenny, acted on the legals.
David O’Kelly, Paul Kealy, James Delahunt and Kevin Nyhan of KPMG advised Hickeys on the financial side and an Arthur Cox team, led by Connor Manning, provided legal advice.
Comment: Since Uniphar listed in a €139m floatation in July 2019, it has completed a number of acquisitions including EPS Group and M3 Medical in November 2019 and the UK and the US-based Durbin last month.
This acquisition, once approved by the regulatory bodies, will increase Uniphar’s retail pharmacies to 335.
Source: Irish Times
Gerard Daniel Worldwide has been acquired by Graycliff Partners
Deal Details: Graycliff Partners LP has completed the acquisition of Gerard Daniel Worldwide, a leading manufacturer and distributor of wire mesh and other wire products.The financial consideration of the deal was not disclosed.
Based in the US, Gerard Daniel has manufacturing facilities worldwide with its European division based in Limerick.
Graycliff Partners is an investment firm focused on making lower middle market investments, typically in manufacturing, business services and value-added distribution businesses.
Advisers: Holmes O’Malley Sexton acted for Gerard Daniel Worldwide on the Irish aspect of the sale to Graycliff Partners
Comment: Gerard Daniel Worldwide has its European base in Abbyfeale, Co. Limerick. The new private equity owners could create new opportunities for the business which its Irish operations will hopefully benefit from.
Source: Graycliff Partners Press Release
DEALS IN THE MAKING
Stobart Group in talks to sell Stobart Air
Falko, the aircraft lessor that owns Dublin-based Cityjet, is reportedly in advanced talks to acquire Stobart Air unit, which operates the Aer Lings Regional service.
Stobart Group reacquired full control of Stobart Air in April. The company said that it intended to work with Aer Lingus to identify a new financial partner to support the business for the future.
Source: Independent
Examinerships/Receiverships
Court appoints Examiner to the Cara Group of pharmacies
PwC’s Ken Tyrell has been appointed as Examiner to the Cara pharmacy group. The application for the appointment was brought by the company’s lender Elm Corporate Credit who is owed c. €14m.
The 13 pharmacy group is led by Dragon’s Den star Ramona Nicholas and her husband Canice Nicholas. In court it was heard that the company made a loss each year since 2016.
Source: The Irish Times
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.
Founded in 1978, and based in Co. Antrim, Moore Concrete provides quality precast solutions to the Civil Engineering, Agriculture, and Building industries.
In FY19, Moore Concrete saw revenue increase by 12.3% to c. £12.4m, while EBITDA decreased by 8.3% to c. £1.4m. This was mainly due to a significant increase in operating expenses as well as a c. 1% decrease in gross margins. Net cash increased by c.£78k to leave a negative balance of c.£313k. The most significant drain on cash was c. £1.5m invested into plant and machinery. The company paid interim dividends of £65k to its shareholders and there was a share redemption of £125k.
Moore Concrete hired an extra 13 people in FY19, bringing the total headcount to 132 employed at a total cost of c. £3.7m. The company is owned by Florence (50%) and Wilbert (50%) Moore.
Michal Lyng Motors operates three car dealerships in Carlow in Kilkenny. It sells new and used Hyundai and Ford cars.
In FY19, Michael Lyng Motors saw revenue decrease by 2.9% to c. €33.2m, while EBITDA increased by a solid c. 6% to c. €0.9m.
Net cash increased by c. €203k to leave an end of year balance of c. €1.84m. The most significant movement in cash was the c.€533k investment into working capital.
The company had 53 employees in FY19 at a total cost of c. €2.0m. Michael Lyng and Mary Lyng both own 50% of Michael Lyng Motors.
Kelletts (Oldcastle) Limited operates under the “Respa” trading name. Based in Oldcastle, Co Meath, Respa has been at the forefront of Irish bed manufacturing for over 70 years.
In FY19, Kelletts saw revenue decrease by 1% to c. €17.3m, while EBITDA increased by 1.9% to c. €1.6m.
Net cash increased by c. €1m to leave an end of year balance of c. €540k. The most significant drain on cash was the fixed asset purchases of c.€427k, mainly spent on Plant & Machinery and Fixtures & Fittings.
The company had 165 employees in FY19 at a total cost of c. €6.2m. Robert Kellett and Darren Kellett both own 50% of Kellets (Oldcastle) Limited
RECENT FUNDRAISINGS
Who: Mainstream Renewable Power, founded by Eddie O’Connor, has raised new debt funding.
What: A combined $620m (€520m) loan is provided by five banks: IDB Invest, KfW IPEX-Bank, DNB, CaixaBank and MUFG. A sixth bank, Santander, has provided a VAT facility.
Why: The debt package is to support the construction of the second phase of its giant “Andes Renovables” wind and solar power platform in Chile.
Source: Independent
Who: State-backed fund Microfinance Ireland has opened a new loan facility.
What: Its new €15m Covid-19 fund is available for small business who can apply for loans up to €25K for a three-year term with no repayments and no interest due for the first six months of the loan.
Why: The fund is to support small businesses through the current period of uncertainty and to protect jobs that have been impacted by the Covid-19 pandemic.
Source: RTE
Who: Simply Blue Energy, a developer of floating off-shore wind farms. The business was co-founded by Sam Roch-Perks and Hugh Kelly
What: The busines has raised funding from a number of high net worths including DD exec Harry Keenan, former CRH exec Jack Golden, farmers Shane Maxwell and Robert Wilson-Wright and stud owner James Hanly.
Why: The purpose of the funds being raised has not been specified however it is believed to be used for expansion.
Source: The Sunday Times
Who: Shamrock Renewable Products, a maker of wood briquettes for stoves. Headed by Alan Fox, founder of HDS Energy, a designer of industrial boiler systems.
What: €20m in new funding. €10m in debt facilities provided by ISIF and a €7.5m equity investment by Michael Breslin and Maurice Regan’s EMI-MR. The equity investment will see EMI-MR take a 50% stake in the business. Shamrock was advised by Focus Consulting and ISIF by Philip Lee Solicitors.
Why: The briquette plant is already completed and the new investment will help scale up its production.
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
It is a while since we checked the betting markets for proxy of probability of outcome of US election.
Joe Biden is still marginal favourite, with Paddy Power 52% probability (5/6) and Trump is 48% (even money).
@RenatusCapital Tweets
89.8% & 87.4%
The year-on-year reduction in the Irish overseas arrivals and departures, respectively, amounting to 227,3K arrivals and 275,4K departures for July 2020, according to @CSOIreland
52.3
The AIB purchasing managers’ index (PMI) survey of Irish manufacturers for August 2020. A reading below 50 indicates contraction. @IrishTimes
35.7% & 35.2%
The year-on-year reduction in the Irish building and construction volume and value, respectively, for Q2 2020, with the largest volume decrease in the residential sector (-47%), according to @CSOIreland
4.2%
The year-on-year decrease in the new car registrations in Ireland for August 2020 amounting to 4,875 new cars sold, according to @SIMI_IE
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
LEARN MORE…
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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