Renatus’ Weekly M&A Newsletter – 01/08/2021
August 1, 2021Renatus’ Weekly M&A Newsletter – 15/08/2021
August 15, 2021
Renatus Weekly M&A & Company Performance Private Equity Newsletter 08/08/2021
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
M&A ACTIVITY
Uniphar acquires BestMSLs Group
Deal Details: Uniphar has acquired NY-headquartered BestMSLs Group for a reported $36m (€30.2m).
BestMSLs Group comprises BestMSLs, the Doctor’s Channel and MDea. It provides outsourced medical affairs services and a range of innovative digital solutions for its pharma partners. The Doctor’s Channel is a digital platform which delivers expert medical information condensed into short streaming videos. MDea provides medical education services.
Uniphar services the requirements of more than 200 multinational pharmaceutical and medical technology manufacturers across three divisions – Commercial & Clinical, Product Access and Supply Chain & Retail.
In its financial year to December 2020, Uniphar reported revenue of c. €1.8bn and EBITDA of c. €66.7m.
Advisers: Barry Murphy, Niall Gilchrist, Lauren O’Sullivan of Davy acted as Joint Broker, Nominated Adviser and Euronext Growth Adviser
Jonathan Hardy, Jamil Miah, Priyal Soni of RBC Capital Markets – Joint Broker
Matt Blawat, Ben Maddison, Francis North of Stifel Nicolaus Europe Limited – Joint Broker
Renatus Comment: This is the second acquisition by Uniphar in the past two weeks, having recently acquired CoRRect, a German-based distributor of medical devices.
Uniphar have been very acquisitive over the past couple years as it pursues geographic expansion across Europe and the US. BestMSLs is its third US acquisition since the start of 2020 and we should expect to see more over the coming years.
Public markets has responded positively to recent activity with Uniphar’s share price up almost 3x since the onset of Covid.
Source: Uniphar press release; Financial Times
KanDo Medical acquires Medilex
Deal Details: KanDo Medical Ltd has acquired Medilex Ltd for an undisclosed sum.
KanDo Medical, based in Dublin, is a healthcare solutions provider founded by David O’Keeffe in 2018. It brings medical technologies from around the world to the healthcare community in Ireland.
Medilex, founded in 2007 by Brian Bailey, is a medical device distributor based in Dublin. It partners with some of the worlds most innovative interventional cardiology and radiology suppliers.
Advisers:
KanDo
Dave Howick of FHM Accountants – Financials
Eamonn Shannon of Shannon & O’Connor Solicitors LLP – Legals
Medilex
Conal Sherry of Walsh O’Brien Harnett
Colin Sainsbury of Byrne Wallace Solicitors – Legals
Renatus Comment: Medilex Medical opens up new therapy areas in hospitals for KanDo Medical. This bolt-on acquisition should result in marginal additional cost and be value accretive.
This is KanDo’s second acquisition in the sector. In 2019 KanDo acquired Fleetwood Healthcare, a medical device distributor focused on Endoscopy, Urology and Women’s Health.
Given O’Keeffe’s growth record in much larger platforms in the medical device sector, it won’t be a surprise to see future additional acquisitions.
Source: KanDo press release
Cancom UK&I has been acquired by Telefonica
Deal Details: Telefonica Tech has acquired Cancom UK&I from Cancom Group in a deal worth €398m at a multiple of 13.5x EV/OIBDA (Operating Income before Depreciation and Amoritisation) (based on 2021E).
Belfast-based Cancom UK&I was formed in January 2021 after three acquisitions were completed in both the UK and Ireland by the CANCOM Group.
It delivers a range of Technology services across the public and private sectors, holding the highest accreditations from Technology and software leaders.
Telefónica Tech, headquartered in Madrid, Spain, offers a wide range of services and integrated Technological solutions in Cybersecurity, Cloud, IoT, Big Data and Blockchain.
Advisers: KPMG Ireland advised Cancom SE, providing vendor financial and tax due diligence services in relation to this transaction.
Renatus Comment: Telefonica Tech was formed in 2019 to manage the multinational’s range of cloud, security and other IT services. Telefonica are looking to diversify its revenue lines and position themselves as partners to businesses looking to transition to more digital infrastructure. It is an example of a large company moving with the times in order to continue growing.
According to Telefonica, Cancom UK&I recorded €155m of revenue in 2020 (expected to be c. €190m in 2021), of which Managed and Professional Services represent more than 50%. Telefonica Tech itself has grown its revenues by more than 25% in the first half of 2021.
Source: Telefonica press release
StoneX acquires Chasing Returns
Deal Details: It has been reported that Irish fintech Chasing Returns has been acquired by US-based and Nasdaq-listed StoneX for an undisclosed sum.
Chasing Returns, which was established by CEO Ann Hunt who is formerly of JP Morgan, is a software product which aims to inform day traders about their trading behaviour. It uses behavioural science to track day traders’ actions and provide feedback, with the aim of making them more disciplined traders and ultimately more successful.
StoneX is an institutional-grade financial services network that connects companies, organizations, traders and investors to the global markets ecosystem through a unique blend of digital platforms, end-to-end clearing and execution services.
Advisers: Conor Sheehan’s team in CKS Finance provided corporate finance advice to Chasing Returns shareholders while Sean Hiney of Wallace Corporate Council providing legal advice.
Renatus Comment: Day trading has experienced a marked increase in notoriety since the onset of Covid and it is great to see an Irish company participating in its growth.
Chasing Returns was reportedly backed by Enterprise Ireland, the National Digital Research Centre and Ivan Fox, the former Chairman of Merrion Capital, prior to this deal.
Notably, in December 2020, Chasing Returns announced a milestone partnership with Gain Capital to make Chasing Return’s product available to Gain’s trading platforms including Forex.com and City Index. Gain Capital is also owned by StoneX which may have been the spark in making this deal happen.
Source: The Irish Times
Veeva acquires Learnaboutgmp
Deal Details: US-based Veeva has announced its acquisition of Cork-based Learnaboutgmp, a provider of accredited GxP training for life sciences for an undisclosed sum.
Learnaboutgmp has more than 170 course titles and over 450 microlearning assets, in its eLearning library which helps organisations develop learning programs for their employees. Content is centred around GxP training which is is a collection of quality guidelines and regulations created to ensure that bio/pharmaceutical products are safe, meet their intended use, and adhere to quality processes during manufacturing, control, storage, and distribution. Prior to the transaction, the business was led by its CEO Graham O’Keeffe.
Veeva Systems (NYSE: VEEV) is a provider of cloud software for the life sciences industry. Veeva serves more than 1,000 customers, ranging from the world’s largest pharmaceutical companies to emerging biotechs.
Advisers: A ReganWall team comprised of Adrian Wall (partner) and Sean Daly (associate) represented the seller. Dave O’Brien of Quintas provided tax and structuring advice. Eversheds London acted for Veeva.
Renatus Comment: Founded in Cork in 2006, Learnaboutgmp today counts some of the largest life sciences companies globally as customers. The list includes Mylan, Johnson & Johnson, Baxter, Merck, and many others. It is another example of the downstream impact that the positioning of large multinationals here can have on local business and entrepreneurship.
Source: PE Newswire
MBO of Leading Edge Project Directors
Deal Details: Leading Edge Project Directors (“LEPD”) management, led by Chirs Barrett, has completed a management buyout of the business.
LEPD specialises in project and development management in the property and construction industry. The business was founded in 2003 by PJ Monaghan and Tommy Murray. Chris Barrett, who is a former Mayo footballer and All Star, joined the business in 2013 and will now become managing director. PJ Monaghan will step into the Chairman role post-deal.
LEPD customers include the HSE, Bain Capital, Centric Health, among others.
Advisers: None mentioned.
Renatus Comment: It is always great to see a business transition from founder to management. The entrepreneur is able to crystalise their value while leaving the business in the hands of senior management colleagues. For management, it is a chance to participate in the equity value that they have helped create.
In Renatus, we are eager to support ambitious management teams across all industries who are thinking of pursuing an MBO. Our door is always open if you, or someone you know, might be thinking of going down this route.
Source: Irish Times
Deals Updates & Other News
Smarttech247 to list in UK
Smarttech247, a Cork-based cyber security company is planning to list on London’s Alternative Investment Market via reverse takeover mechanism.
As part of the reverse takeover, Conduity Capital will acquire Smarttech by issuing shares worth €39.3m.
Reverse takeover enables firms to secure a stock market listing without having to engage in an initial public offering process.
Source: Independent
Amryt completes acquisition of Chiasma
It has been reported this morning that Dublin-based Amryt Pharma’s acquisition of Chiasma has completed for consideration reported to be $339m.
Amryt is a global commercial-stage biopharmaceutical company focused on acquiring, developing and commercializing innovative treatments. US-based Chiasma is a biopharmaceutical company focused on developing and commercializing oral therapies.
Source: Business Post
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
Galway Harbour Company runs and operates the Port of Galway.
Revenue and EBITDA were down by c. 21% and c. 13% to €3.7m and €1.3m, respectively, for the period ending FY Dec 20. This decline is linked to covid which had an impact on the volume of imports.
The cash balance increased by c. €535k during the year to end at c. €6.4m. The main uses of cash were fixed asset purchases (€484k) and debt repayments (€355k)
The company employs 15 people at an annual cost of c. €1.3m. Ownership of the Galway Harbour was transfered from the Minister for Transport, Tourism and Sport to Galway City Council at the beginning of 2021.
Leaseplan Information Services Limited, trading as Leaseplan, is global Car-as-a-Service company and also has a pan-European used car marketplace. The Irish operation is based in Leopardstown, Dublin.
Accounts for the Irish segment of the business for the period ending FY Dec 20 show that revenue and EBITDA increased by c. 12% and c. 20% to €62.6m and €6.7m, respectively.
The closing cash balance decreased by c. €1.1m during the year to end at c. €153k. The big drains on cash were an investment into working capital, capitalised software development costs and fixed asset purchases. These were partially offset by intercompany loans received.
The company is part of the Leaseplan Group which employs over 8,000 people and has offices in over 30 countries.
RECENT FUNDRAISINGS
Who: Weston Airport, on the border of Dublin and Kildare, secures investment.
What: The investment value, in exchange of a majority stake, was not disclosed. The investment group was led by Derick Walshe, a Limerick-based financier. The other investors include Stripe co-founder John Collison, John Brennan, Catherine Green and Gerald Dundon.
Why: The investment is to be used for modernising the bar, restaurant and conference facilities to create a best-in-class visitor experience, as well as improving the terminal, aircraft storage and hangar areas.
Source: Irish Times
Who: Irish consumer subscription service Noa – News Over Audio – secures investment.
What: €200,000 comes from Australian edtech Go1.
Why: The deal will see Noa’s narrated articles become available to Go1’s subscriber base of more than 3.5m learners who are undertaking career education and training courses.
Source: Irish Times
Who: Finbourne, an Irish-led data integration and management platform for investment firms, has raised funding.
What: €17.6m Series-A round was funded by a group of investors including Fidelity International.
Why: The purpose of funding was not disclosed.
Source: Independent
Who: Polywork, Irish-founded professional social network, has raised funding.
What: $13m (€11m) Series A funding round was led by Silicon Valley VC firm Andreessen Horowitz (a16z) with participation from the Collison brothers of Stripe, and others, including individuals from Instagram and Reddit. This latest funding round quickly follows a reported $3.5m raised by Polywork just 3 months ago.
Why: The funding is to be used to boost staff numbers and invest in its platform.
Source: Irish Times
Who: Marketing software company Zymplify has secured funding.
What: Invest NI has offered the company £182,000 as part of company’s investment of £1.5m.
Why: The funding will be used towards creating new jobs in the company.
Source: Belfast Telegraph
Who: Dublin-based Tracker Software Technologies has raised funding. The business has developed a software package that helps businesses manage employee business travel and remote working. Features include management of Taxation, Immigration, Duty of Care and Remote Working. It was founded by its CEO Liam Brennan.
What: It has been reported that $2m has been raised from existing backers. Backers reportedly include ECA International, a similar business.
Why: The funds will be used to fund growth as the business has stated it aims to hire 30 more employees.
Source: Business Post
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 OF THE WEEK
In the short to medium term, every government will be faced with the dilemma of balancing the books versus keeping fuel in the fire. The FT had a great description of same yesterday:
“There are two schools of thought” said one minister. “One is that you’re a 400lb man and you should lose some weight; the other is you’re a 400lb man and one more burger won’t hurt.”
Rishi Sunak is very much in the balance the books camp while Boris is in the spend today pay tomorrow camp.
The mood from Kildare St. seems to be to keep the fuel in the fire. It will be years before we know what the right approach should be.
@RenatusCapital Tweets
63.3
The AIB Ireland PMI for July 2021, a slight decrease from June reading of 64. A figure above 50 indicates growth in the sector. @IrishTimesBiz
90,342
The number of new cars registered in Ireland year-to-date July 2021 compared to 74,056 for the same period in 2020 (+22%) and 105,439 in 2019 (-14.3%), according to @SIMI_IE
15.9%
The year-on-year increase in the value of Irish services output for June 2021. The largest annual increases were in Accommodation and Food Service Activities (+57.1%), according to @CSOIreland
€8.3bn
The overall amount of Irish PUP payments made during the Covid-19 pandemic as of 1st week of August 2021. The number of people in receipt of the PUP is just under 163,400 this week – the lowest level since the pandemic began. @RTE
26%
The year-on-year decrease in the Northern Ireland car sales for July 2021 amounting to 3,248 new cars sold, according to @BelTel
8.9%
The year-on-year increase in the average cost of home in Northern Ireland for July 2021 with the average price for a house at £164,023, according to @BelTel
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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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