Renatus’ Weekly M&A Newsletter – 18/12/2022

December 20, 2022

Renatus’ Weekly M&A Newsletter – 15/01/2023

January 15, 2023

January 8, 2023

A review of CSO statistics summarising the Irish economy in 2022, John Laing Group acquires asset portfolio, Verve is acquired and more in our newsletter.

Renatus Weekly M&A & Company Performance Private Equity Newsletter 08/01/2023

Dear Reader,

Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.

THOUGHT OF THE WEEK

Happy new year all, we hope you all enjoyed a well-deserved break over the Christmas period.

The CSO has this week released some interesting statistics summarising the Irish economy by numbers in 2022. We have included some highlights below as we reflect on what was an eventful year globally.

As of the week ending 06 November 2022, an estimated 62,425 people from Ukraine had arrived in Ireland under the Temporary Protection Directive.
The most common surname for babies born in 2021 was Murphy.
Fraud crime had the highest percentage increase in the year to June 2022 of all crime categories.
Men were more likely than women to ask for a pay rise to counteract cost of living increases.
Women accounted for more than 60% of deaths due to dementia and 67% of deaths due to Alzheimer’s Disease in 2020.
The Accommodation & Food Services sector had the highest percentage of employees who were not fully vaccinated at 23%.
One of the main reasons we spent time outdoors was to improve our mental health and well-being.
Kildare, Dublin County, and Meath had the highest proportion of A rated homes for all Building Energy Ratings (BER) audits conducted between 2009-2022, while Leitrim had the lowest at 2%.
Inflation hit a 38-year high in 2022 mostly driven by rising energy costs and food prices.
More new dwellings were completed in the first three quarters of this year than in the whole of 2021.
In the 12 months to October 2022 the lowest median or mid-point price paid for a house was €148,000 in Longford, while the highest was €620,000 in Dún Laoghaire-Rathdown.
Key economic indicators all rose during the first nine months of 2022 when compared with the same period last year, such as Gross Domestic Product (+11.7%), personal spending (+7.2%), and Modified Domestic Demand (+10.1%).
While 1.1 million more passengers used Dublin Airport in October 2022 when compared with October 2021, this was 200,000 fewer than the same month in 2019 (pre-pandemic).
Fertiliser prices had increased by 177.8% in the 12 months to April 2022.
The total number of cattle of 7.4 million in the country exceeds the number of people by more than two million.

The CSO’s reports can be accessed at the attached links, split into Part 1 and Part 2.

M&A ACTIVITY

John Laing Group acquires asset portfolio from the Irish Infrastructure Fund

Deal Details: John Laing Group has acquired three assets from the Irish Infrastructure Fund (“IIF”). The three assets involved are the 8,000-person capacity Convention Centre Dublin, Towercom – Ireland’s largest independent telecommunications tower company and Valley Healthcare – Ireland’s largest primary care centre operator and developer. Deal consideration was not disclosed but it has been reported that the assets are valued at c.€1bn.

The Irish Infrastructure Fund was established in 2011 by Irish Life Investment Managers and managed by Australia’s AMP Capital, led by Philip Doyle. It received backing from the Irish State through the National Pensions Reserve Fund, which invested €250m, with a mandate to support the Irish economy through investment in essential community and national infrastructure and services.

John Laing Group is an international investor and manager of infrastructure assets, based in the UK. It is owned by KKR who took the company private in September 2021. In FY Dec 21 it reported turnover of c.£317m which converted to an EBITDA of c.£233m. This is the largest single investment in John Laing’s history and follows the company’s sale of its 35.6MW wind farm in Tipperary to Greencoat Renewables for €31.2m last year.

Advisers:
AMP Capital:
Deal Advisory: IBI led by Laurence O’Shaughnessy, Richard Tighe, Michael Moriarty, Pamela Clarke, Ben Murphy and Stephen Crossan.
Jeffries led by Dai Clement, Lorna Shearin, Qasim Mahmood, Joe Dorney, Sophie Walsh and Yolan Vander Trappen.
Legal: Dentons led by Eavan Saunders, David McGuinness, Michael McDonald and Tom Dalton. Matheson & McCann Fitzgerald.

John Laing Group:
Legal: Arthur Cox & Simpson Thacher & Bartlett.
Deal Advisory: Evercore & Rothschild

Renatus Comment: Following the disposal of these assets, IIF’s principal remaining asset is the fibre networks company, ENET, which it is seeking to sell in a separate process to maximise its value.

The National Pensions Reserve Fund’s mandate ended in 2014, upon which its assets became assets of the Ireland Strategic Investment Fund (“ISIF”). According to its H1 2022 Report, ISIF has to date committed over €6bn to Ireland across 175 investments as of October 2022, supporting Irish companies, projects and funds.

Source: John Laing Press Release

Verve Marketing acquired by The Opus Group

Deal Details: Verve has been acquired by the Opus Group. The deal consideration was not disclosed.

Verve is one of Ireland’s most prominent events and marketing agencies. Its service offering includes live and virtual event management, brand experience development, sponsorship activation and digital strategy development. The business is based in Dublin and has offices in London and Amsterdam. Verve is owned entirely by Ronan Traynor, who founded the business. Verve’s revenues grew by c. 80% to c. €21.0m in FY21, converting to an EBITDA of c. €1.3m. Given the recent growth of the business, the underlying profit is lying to be higher owing to significant non-recurring costs to support this growth.

Based in Oregan, USA, The Opus Group is a global agency network which consists of the Opus Agency, MAS, TENCUE, and now Verve. Opus’s clients include Google, Microsoft and Salesforce. The business does not report financial information.

Advisers:
Verve:
Corporate Finance: PwC led by Mark McEnroe and Laura Gilbride.
Legal: Dillon Eustace led by Philip Lea, David Lawless and Owen Brayden.
Due Diligence: BDO led by Rory O’Keeffe, Anthony O’Boyle and Vaughan Coetzee (FDD) and Angela Fleming and Philip Nolan (Tax DD).

Opus Group: None mentioned.

Renatus Comment: Founder Ronan Traynor has been on an outstanding journey with Verve over the past 30 years. Just two years after graduating from UCD, Traynor founded Verve, and the business has grown into one of Ireland’s premier marketing agencies since. The acquisition is just reward for Ronan Traynor’s journey, with him remaining to lead the firm on its next phase of growth. This acquisition will also be highly beneficial to the Opus Group. Firstly, by adding a strong European presence to the business currently located in the USA and the UK. Secondly, by increasing its depth and range of offerings for its long list of blue chip clients.

Source: The Opus Group Press Release

Marco Beverage Systems acquired by Middleby Corporation

Deal Details: Marco Beverage Systems has been acquired by Middleby Corporation.

Marco Beverage Systems is a Dublin-based company that produces beverage dispensing systems, primarily for coffee and water. The vendor are Drewry Pearson, Sean Moran and Paul Stack. In FY Sep 21 it reported turnover of c. €21.0m which converted to EBITDA of c. €1.2m per statutory filings. Given the growth in recent years there are likely to be significant non-recurring costs and the underlying EBITDA is likely to be in excess of this figure. Paul Stack will remain in his role as managing director following the transaction.

Middleby Corporation is based in Illinois, USA and specialises in the provision of commercial food service, food processing, and residential kitchens. In FY21 it reported sales of c. €2.75bn which converted to an EBITDA of c. €601.0m.

Advisers:
Marco Beverage Systems:
Corporate Finance: IBI led by David Lyons, James Roberts and Patrick Temperley.
Legal: ByrneWallace LLP led by Feargal Brennan, Jonathan Lynch and Ross Little.
Tax: ByrneWallace led by Colin Bolger, Anthony Smyth and Julie Herlihy.

Middleby Corporation: None mentioned.

Renatus Comment: Marco Beverage Systems has grown to become a successful Irish exporter over the past 30 years, since developing its first water boiler in 1980, with 75% of sales being overseas. The company expanded its offering and broke into the US and Asia in the late 2000s, before opening offices in the US and China in 2015. One of the key benefits of the Marco acquisition for Middleby is the existing sales and operations teams which exist in China, which will aid Middleby in extending its own brand whilst helping to further the growth of Marco.

Source: Marco Beverage Systems Press Release

Bevcraft Group merges with Heidrun Tapperi

Deal Details: Bevcraft Group has merged with Heidrun Tapperi. Deal details were not disclosed.

Bevcraft Group is a specialist process and packaging business primarily focused on craft & artisan beverage producers. The business was founded in Mullingar by Darren Fenton and Ciarán Gorman in 2016. Bevcraft Group does not report turnover or EBITDA information.

Heidrun Tapperi is a Norweigen-based provider of mobile contract canning and packaging solutions to the craft beverage industry. The business reported FY21 turnover of c. €1.8m which converted to an EBITDA of c. €0.2m.

Advisers:
Bevcraft Group:
Corporate Finance & Taxation: RBK Chartered Accountants led by Chris Ball, Jackie Masterson, Catherine Sweeney & John A. Doherty.
Legal (Dublin): Reddy Charlton LLP led by Niamh Gibney & James Tansey.
Legal (Norway): SANDS Advokatfirma DA led by Terje Gulbrandsen & Lars Tormodsgard.

Heidrun Tapperi AS:
Deal advisory: BDO Norge led by Gisle Andre Bjørnø.

Renatus Comment: This merger sees Bevcraft further increasing its production capacity, with current facilities across Sandefjord in Norway, Breda in The Netherlands, Mullingar, St Helens, Peterborough, Basingstoke, and Leeds/Bradford in the UK. The business acquired Them That Can in March 2021 and also invested €5.0m in the new manufacturing facility in Peterborough. Following the merger, the business is scaling to a point where more than a quarter of breweries in Europe are less than a three-hour drive from a Bevcraft base, according to the Group’s CFO, Ciarán Gorman.

Source: RTE

UTS Technologies acquired by Valley Way Solutions

Deal Details: UTS Technologies has been acquired by Valley Way Solutions. The deal was completed with backing from Dunport Capital Management, led by Ross Morrow, Aidan Lynch and Seán Healy. The deal comes as UTS agrees a long-term partnership with Flowbird.

UTS Technologies was established in 1992 in Dublin. It is Ireland’s leading provider of parking terminals. It was owned by Jonathan Spring and family. It does not report turnover or EBITDA information.

Flowbird S.A.S is a French manufacturer and supplier of parking management and public transport ticketing solutions, with operations in Ireland. In FY Dec 20 it reported turnover of €148.5m.

Advisers:
UTS Technologies:
Corporate Finance: CKS Finance led by Conor Sheahan and Peter Ryan.
Legal: Addleshaw Goddard led by Ray Byrne and Evan Shaughnessy.
FDD: Grant Thornton led by Anne Marie Costello.

Valley Way Solutions: None mentioned.

Renatus Comment: Companies in the urban mobility and parking management space have increasingly pursued technological improvements to adapt to the demands of modern parking users. Flowbird acquired two parking technology companies in 2022: YourParkingSpace, a UK-based firm that provides systems for managing parking reservations and Yellowbrick International, a Dutch provider of systems that helps users to find vacant spaces. UTS has reaffirmed its commitment to developing cutting-edge technology in this space and the deal with Flowbird should give it a strong platform to implement this strategy in Ireland.

Source: Dunport Press Release

Greencoat Renewables acquires 22.5% stake in German wind farm

Deal Details: Greencoat Renewables PLC has acquired 22.5% of the Butendiek offshore wind farm in Germany from Marguerite Pantheon SCSP.

Greencoat Renewables Plc. is an investor in euro-denominated renewable energy infrastructure assets with a portfolio of over 1,028MW of generation capacity. The company is headquartered in Dublin and is focused on continental Europe. It was founded by Richard Nourse in 2017. It is led by Paul O’Donnell and Bertrand Gautier. The business reported revenue of c. €139m in FY21.

Marguerite Pantheon SCSP is an investment vehicle managed by Marguerite, a pan-European infrastructure fund manager.

Advisers: None mentioned.

Renatus Comment: The acquisition will enhance Greencoat Renewables’ commitment to decarbonated electricity in Europe. The German farm currently benefits from fixed-price electricity prices until December 2023, after which a floor price for the electricity sold kicks in until December 2035. Greencoat Renewables has been an acquisitive player since its inception in 2017, with 7 acquisitions completed since the start of 2022, spanning across Ireland, France, Spain and Germany.

As of June 2022, the group had a portfolio of 28 wind farms, with the portfolio at that point generating enough clean electricity to eliminate 677,000 tonnes of CO2 emissions from thermal generation.

Source: Greencoat Renewables PLC Press Release

McBurney Transport has been acquired by DFD

Deal Details: McBurney Transport has been acquired by DFDS. The deal includes McBurney Refrigeration Ireland Ltd and Bondelivery NI Ltd. Reported deal consideration was c. £142.7m.

McBurney Transport is a Ballymena-based logistics company. It was established in 1965 by Norman McBurney OBE. In FY Dec 21 it reported turnover of c.£115.4m which converted to EBITDA of c.£18.5m

DFDS is a publicly-listed Danish ferry, transport and logistics company. In FY Sep 21 it reported turnover of c. €2.4bn which converted to an EBITDA of c.€328m. It was founded in 1866 by Carl Frederik Tietgen.

Advisers:
DFDS:
Legal: Arthur Cox led by Lynsey Mallon, Lois Arbuthnot, Ceardha Morgan, Patrick Loughridge and Chris Fullerton from the Belfast office and Maura McLaughlin, Patrick Horan, Daniel Price, Zara Carpenter, Ronan Scanlan and Ruth McCormack from the Dublin office.

McBurney Transport Group: None mentioned.

Renatus Comment: DFDS has been a serial acquirer in recent years, expanding its logistics and transport business all across Europe. It has taken an increased interest in Ireland in recent months, having acquired Lucey Transport in July 2022.

This deal further expands its cold logistics operation in the UK & Ireland. The logistics space, and cold storage, in particular, has seen increasing levels of M&A activity coming off the back of the pandemic. In recent months, other deals in the space have included the acquisitions of Dixon International Logistics and Virginia International Logistics.

Source: Belfast Telegraph

Gannon Chemicals Limited acquired by Christeyns NV

Deal Details: Gannon Chemicals Limited has been acquired by Christeyns NV. The deal consideration was not disclosed.

Gannon Chemicals is a manufacturer of cleaning chemicals and measurement systems based in Ballindine, Co. Mayo. Its main products include chemicals for laundry, dishwashing, sanitisers and disinfectants. It was established in 1972 by W.P. Gannon and was most recently owned by Paul Gannon. It does not report turnover or EBITDA information.

Christeyns NV is a Belgian producer of laundry, hygiene and cleaning solutions. It is a family-owned business established in 1946. In FY Dec 21, it reportedly had a turnover of c.€70.6m.

Advisers: None mentioned.

Renatus Comment: Both Gannon Chemicals and Christeyns highlight the sustainability of their cleaning products as key to their respective offerings. The addition of a manufacturing and warehousing base in the West of Ireland will increase Christeyns’ access to the local markets, matching Christeyns’ stated ambition of becoming the supplier of choice in each market that it operates. Christeyns’ scale and technical expertise should prove hugely beneficial to Gannon, while the heritage of Gannon Chemicals locally, which has been in operation since 1973, should aid Christeyns’ penetration of the market.

Source: Christeyns Press Release

HCS acquires Fixaphone

Deal Details: HCS has acquired Fixaphone. Deal consideration was not disclosed.

HCS is a Waterford-based company that provides integrated IT, telecoms and productivity services. It was established in 1998 and is owned by Neil Phelan and Daniel & Sean Hegarty. It does not officially report turnover or EBITDA information.

Fixaphone is also Waterford-based and specialises in PBX telephone sales and maintenance for small businesses in the South East of the country. It is led by Managing Director Mick Foley. It does not report turnover or EBITDA information.

Advisers: None mentioned

Renatus Comment: This acquisition will expand HCS’ telecoms business adding 750 customers and strengthening its overall suite of products on offer. The business is going from strength to strength and recently announced a €3.2m investment to double its headcount to 60 people. The company will continue to position itself to take advantage as cloud and other new communication technologies continue to replace traditional non-digital systems in today’s evolving work environment.

Source: The Independent

L&G NTR Clean Power (Europe) Fund acquires three solar projects in Spain

Deal Details: The L&G NTR Clean Power (Europe) Fund has acquired three solar projects in Spain from BayWa r.e.

NTR plc is an Irish renewable energy company founded in 1978. The business is headquartered in Dublin but operates throughout Europe. Its Clean Power (Europe) Fund was established in 2021 and is backed by UK asset manager Legal & General. This is the fund’s first acquisition.

BayWa r.e. is a leading global renewable energy developer, service provider, distributor and energy solutions provider based in Germany. Two of the solar projects in this deal are located in Castilla la Mancha and the third in Andalusia. Collectively they produce 115 MWp and will commence operation later this year.

Advisers:
NTR plc:
Technical: Vector Renewables

BayWa r.e.
Legal: Cruatecasas

Renatus Comment: Last year, NTR acquired the Irish Murley wind farm and the Arlena-Tessennano group of wind farms in Italy. It has expanded its presence in the wind and solar sectors right across Europe, having now entered its sixth European market. The European energy transition is estimated to represent a €1 trillion opportunity for investors and NTR continues to pursue this across the continent. NTR has been a significant player in the space for a number of years now, having previously launched its €250m UK & Ireland Wind Fund in 2016, along with a €350m Renewable Energy Income Fund in 2018, with its first investment in the wind energy space having come in 1999.

Source: NTR press release

Kavanagh Crane Hire acquires William O’Brien

Deal Details: Kavanagh Crane Hire has acquired William O’Brien for an undisclosed amount.

Kavanagh Crane Hire is a family-run crane supplier that operates from four depots in Ireland. The business is owned by Patrick Kavanagh Jnr, Paul Kavanagh, and Aidan Kavanagh. In FY21, the business reported turnover of c. €12.9m which converted to an EBITDA of c. €4.3m, with c. €1.9m in depreciation expenses.

William O’Brien is a Cork-based business that specialises in crane hire and contract lifts to bespoke turnkey heavy lift engineering solutions across a wide range of sectors. The business does not report turnover or EBITDA information.

Advisers: None mentioneed

Renatus Comment: In early 2022, the official CIF crane count showed that there were 120 cranes across Dublin City’s skyline, just three below a previous record set in 2019. While suggesting significant construction activity in the capital, it also served to highlight a lack of high-rise construction elsewhere in the country. At the time, Cork had 19 cranes visible, with this figure standing at 11 as of the end of December 2022.

It should be expected however that this activity will pick up in Cork over the coming months and years, due in part to the government’s Cork City Development Plan for 2022-2028, with a specific focus on the Tivoli and City Docks. Among these developments will be the development of a €150m 34-storey tower on the site of the old port of Cork, which will become Ireland’s tallest building.

Source: Vertikal

COMPANY PERFORMANCE

H. Murphy & Company (Enniscorthy) Ltd. is a cash & carry, wholesale grocery and forecourt business in Enniscorthy Co. Wexford. It was established in 1929 and is owned by Philip, Graham & David Murphy and Mairead Kehoe.

In its financial year to February 2022 the business generated turnover of c. €40.1m, an increase of 31.8% year-on-year (45% of this increase was due to higher fuel sales). This converted to c. €1.1m EBITDA, an increase of 26.2%. The increase in EBITDA was primarily driven by revenue growth.

The business finished the year with a cash balance of c. €5.4m, a c. €0.8m increase on FY21. The purchase of property, plant and equipment was the most significant post-EBITDA cash movement.

The business employed a total of 153 people during the period at a total cost of c. €4.3m.

H. Murphy & Company (Enniscorthy) Ltd figs

Johnstown Garden Centre Limited is a garden centre in Johnstown, Co. Kildare. The business is owned by John and Bernadette Clarke.

In its financial year to January 2022 the business generated turnover of c. €10.7m, an increase of 44.9% year-on-year. This converted to c. €2.5m EBITDA, an increase of 96.7%. The increase in EBITDA was driven by significant operating margin improvement.

The business finished the year with a cash balance of c. €4.2m, a c. €1.6m increase on FY21. The repayment of other creditors was the most significant post-EBITDA cash movement.

The business employed a total of 60 people during the period at a total cost of c. €2.1m.

RECENT FUNDRAISINGS

Who: A group of early-stage carbon-removal start-ups including Captura, which removes CO2 from the ocean; Cella, which is mineralising CO2 by injecting it into volcanic rock formations; and Kodama Systems, which is burying biomass thinned from forests to prevent it from decomposing.

What: The start-ups received pledges of €10.8m from Stripe and Shopify.

Why: To continue their efforts to remove carbon dioxide from the atmosphere.

Source: Irish Examiner

Who: Beyondbmi, a company that offers prescribed obesity medication, nutritional therapy and one-to-one coaching to help people lose weight.

What: The company raised funding of over €500k from investors which included Ergo chairman John Purdy, KPMG partner Eoghan Quigley, CKS Finance founder Conor Sheahan and Grant Thornton head of corporate finance Paddy Dillon.

Why: The company said that the funds will be used to launch the platform and demonstrate its efficacy.

Source: Irish Times

Who: O&S Doors, a leading designer and manufacturer of kitchen, bathroom and bedroom door frontals in Ireland and the UK. Headquartered in Co. Tyrone, the company is an affiliate of Sun European Partners LLP

What: The company has raised new Asset-Based Lending (ABL) facilities from PNC, a large US bank.

Advisors: Deloitte Debt & Capital Advisory led by Brian Fennelly and Ross O’Donovan advised O&S Doors. DLA provided legal advice to the company, while Mills & Reeve advised PNC

Why: To refinance existing facilities and support the continued growth of the business.

Source: Deloitte

Who: Tara Project, an EU project involving Irish Medtech company Capri that specialises in developing implantable medical devices for chronic peripheral nerve pain.

What: The project has received €4.5 million in funding under the European Union’s Horizon 2020 programme.

Why: The project aims to develop an implantable medical device that prevents migraines by discharging mild electronic signals to disrupt the pain signals between the spine and brain.

Source: Business Post

Who: BNRG, the Irish-based solar energy firm.

What: The business has received €8.5m in investment from AIB.

Why: The investment will be used to to help fund its solar development pipeline of 2.7 gigawatts (GW) across Ireland, the US, the UK, and Australia.

Source: Irish Times

Who: Peachylean, the women’s athleisure brand founded by Sharon Keegan.

What: The business has raised a total of €750k in investment across two funding rounds in late 2022. Firstly raising €500k in private investment followed by €250k from Enterprise Ireland.

Why: The funding will be used to accelerate the business’ expansion both in Ireland and abroad.

Source: Sunday Business Post

Who: Fanify, the Dundalk-based start-up that has developed a platform to automate promotional activities for musicians.

What: The business has raised €400k in a pre-seed funding round led by April Ventures.

Why: The funding is to be used to build out the company’s technology.

Source: Sunday Business Post

EXECUTIVE AND BOARD APPOINTMENTS

We in Renatus believe that more important than the deals are the people and we are pleased to provide you with details of key recent executive and board-level appointments.

Andrew Keating

Source:
(Google Images & LinkedIn)