Renatus’ Weekly M&A Newsletter – 15/09/2019
September 15, 2019Renatus’ Weekly M&A Newsletter – 22/09/2019
September 22, 2019
Renatus Weekly M&A & Company Performance Private Equity Newsletter 08/09/2019
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.
The Real Deal 2019
More than 500 of Ireland’s SME owners, managers, entrepreneurs and advisors have already signed up to join us for The Real Deal 2019 in Goffs, Co. Kildare on October 10th. We expect the event to sell out soon so please book your place now to avoid disappointment.
We would be delighted if you would join us on the day.
To buy your ticket, please visit The Real Deal website here.
Speaker Announcement
This week we were delighted to announce that Helen Tynan will be joining the People and Culture panel at The Real Deal 2019.
Helen is Director of People Operations for Google in Ireland – a site with 4000+ employees and 200+ team members in People Operations (aka HR). She also acts as a Lead People Partner for Tech & Advisory Functions across EMEA. She has won multiple awards for her endeavours as a leader in this space including HR Leader 2018 in Ireland by the HR Leadership & Management Awards Group and was recognised as one of Ireland’s 25 Most Powerful Women in 2016.
Helen will join Alan Cox of Core to discuss the critical elements of People & Culture at The Real Deal 2019. Other speakers on the day include Bobby Healy, David McKernan and Nikki Evans with more to be announced. Each panel will be moderated by Matt Cooper.
For more information, please visit the website here and the 2018 highlights video can be viewed here.
We hope to see you on the day!
M&A ACTIVITY
Sabeo sells its Enterprise Technology Division to Evros Technology Group
Deal Details: Sabeo has recently sold its Enterprise Technology Division to Evros Technology Group.
Sabeo is one of the leading Enterprise Technology Service providers in Ireland with extensive skills in large enterprise infrastructure and professional services engagements. For over 19 years, Sabeo has been recognised as an IT centre of excellence by vendors and customers alike and has been a Deloitte Technology Fast 50 Awards winner for many years.
According to Brian Larkin, Evros Managing Director, “We see this as an ideal fit with our growth strategy and another positive step in support of our mission to bring customers on a Digital Transformation journey. We believe that Sabeo Technologies will bring additional skills in key areas such as Open Source, DevOps, Containers and Data Management. Sabeo Technologies has extensive expertise in all major Linux Distributions and are a Red Hat Premier Business Partner in Ireland.”
Advisers: Evros was advised by Fieldfisher (Feilim O’Caoimh) and Sabeo was advised by IBI Corporate Finance (Raymond Donegan and Ailbhe Doyle) and Flynn O’Driscoll (David Ryan)
Renatus Comment:
The indigenous IT services sector in Ireland has historically been quite fragmented with a large number of small-mid size companies operating in the sector. A number of larger companies are beginning to emerge now who are supplementing organic growth with growth by acquisition and this transaction is a good example of the ongoing industry consolidation. We believe the sector will see further consolidation.
Source: Sabeo Technologies
Valeo Foods acquires Kettle Foods
Deal Details: Valeo Foods, the owner of Irish consumer brands such as Jacob’s biscuits and Kelkin, has acquired the European business of Kettle Foods from the Campbell Soup Company for a reported £66m (€73.6m).
Post-acquisition, Valeo will take control of snack brands such as Kettle Chips, Go Pure vegetable crisps and Metcalfe’s Skinny Popcorn.
It’s reported that the Kettle acquisition could bring Valeo’s annual sales to nearly €1bn.
The deal is said to still require regulatory and employee approval.
Advisers: None mentioned
Renatus Comment: This will be Valeo’s 12th acquisition since it was established in 2010 following the merger of agri-group Origin Enterprises’ consumer foods arm and Batchelors. Batchelors was owned by CapVest Partners, a private equity firm founded and led by irishman Seamus Fitzpatrick. CapVest bought Origin’s 32% stake in Valeo for a reported €87m four years ago.
Source: Cambpell Soup Company Press Release
Israeli firm acquires majority stake in BMD
Deal Details: Meptagon, an Israeli engineering contractor, has acquired a majority stake in Irish engineering contractor BMD & Company, a Cork-based designer and builder of pharmaceutical, oil and gas and energy facilities that is led by managing director Mike Walsh.
Meptagon is said to have bought 75% of the shares in the company for an undisclosed sum.
Advisers: David Lucas of Mazars acted for the Meptagon while David Tynan of PwC acted for BMD. Marie Cunningham acted as legal adviser for Meptagon.
David Tynan of PwC was lead sell side adviser on the transaction and John Sheehan of JW O’Donovan provided legals
Renatus Comment: BMD’s latest accounts are for the period ending December FY18 and show that the company experienced significant growth during the period. Revenue increased by c. €14.5m to €49.1, and operating profit nearly doubled to €3.9m from €2.1m a year earlier. Prior to this transaction, BMD was owned by Frank and Noreen O’Keefe, Mike Walsh and Paul Keegan.
Source: Irish Times
Northern Irish IT Services provider acquires London-based BTA
Deal Details: CMI, a Belfast-based IT managed services provider, has acquired BTA Limited, a London-based IT specialist. CMI were supported by Panoramic Growth Equity, a growth equity company with offices in London and Glasgow.
CMI, led by managing director Ken Roulston, creates IT strategies, manages IT systems and supports IT departments of over 500 organisations across the UK’s private sector.
The acquisition of BTA further extends CMI’s foothold in the UK.
Advisers: Richard Moorehead of HNH and Sarah Burrows pf Edwards & Co Solicitors advised the CMI management team. Panoramic were advised by Addleshaw Goddard. Consilium Chartered Accountants provided Financial Due diligence.
Renatus Comment: CMI has made several acquisitions in recent years and the acquisition of BTA is an extension of this strategy. It’s most recent acquisition was Solsis in 2016. Prior to th partnership with Panoramic, CMI hasd 9 different shareolders, inluding Chairman Robert Brittaine and MD Ken Roulston.
Source: HNH
ALT is acquired by Merieux NutriSciences
Deal Details: Murieux NutriSciences, a Chicago-based food safety specialist, has acquired a majority stake in Advanced Laboratory Testing Limited (“ALT”).
ALT provides a full range of local laboratory testing services to the food industry in Ireland from its offices in Kildare and Wexford. The company has 92 employees and generated sales in excess of €7 million in 2018 with continued very strong double-digit growth year-on-year, according to the press release.
Advisers: Ronan Murray Lead Financial Advisory Partner for Deloitte in Munster and his team including Derek Murphy provided sell side advice to the vendors.
John Sheehan & John Fuller Corporate Commercial Partners at JW O’Donovan proved the legal advice
Source: Merieux NutriSciences Press Release
EXECUTIVE & 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 details of key recent executive and board level appointments
Shannon Group appoints Chief Operating Officer
Shannon Group has today announced the appointment of Ray O’Driscoll, Managing Director of Shannon Commercial properties, as Chief Operating Officer (COO) for the Group, and will take up the position with immediate effect. Mr O’Driscoll joined Shannon Group in 2014 as Managing Director of Shannon Commercial Properties to manage the Group’s diverse property portfolio. Mr O’Driscoll who will report to the Group CEO, will be responsible for overseeing and driving the ongoing business operations within the Group’s companies – Shannon Airport, Shannon Commercial Properties, Shannon Heritage, and the International Aviation Services Centre (IASC) the Group brand which supports the growth of the aviation cluster at Shannon.
DLA Piper boosts Irish expansion
International law firm has appointed four new partners and three legal directors to expand recently-opened Dublin office. Kate Curneen will join the F&P practice from Dillon Eustace, where she has been a partner since 2016. She specialises in real estate, leveraged, structured and asset finance. John Magee joins the IPT practice from William Fry, where he has been a partner since 2016, specialising in technology, data privacy, data breach and cybersecurity. Sean Murray specialises in tax and also joins the firm from Dillon Eustace, where he has been a partner since 2008. Sean advises on financial services tax matters. Graham Quinn joins to establish the real estate practice in Ireland from William Fry, where he has been a partner since 2016. He advises on all aspects of commercial property law. In addition, DLA Piper has hired three new legal directors: IPT lawyer Treena Dunlea-Peatross from Bird & Bird (London); corporate lawyer Caroline Kearns from Norton Rose Fulbright (London); and F&P lawyer Liam Mills from William Fry.
Circle K Makes New Appointments to Leadership Team
Circle K Ireland has announced new appointments to its leadership team. Jonathan Diver has taken up the position of senior director of fuel, from his current position as senior director of retail operations for dealer & franchise, where he played an integral role in the successful rebrand from Topaz to Circle K. Derek Nolan will move from his current role as senior retail director of operations, to senior director of retail operations for dealer and franchise. Mr Nolan also played an key role in the rebrand process over the last couple of years guiding the Circle K Network and Retail teams through the integration period. Paul Dixon will take up the position of senior director of retail operations, from his current role as head of retail execution and support.
Aecom has appointed Susan Evans as the new head of rail for Ireland and UK
Consulting company Aecom has appointed Susan Evans as the new head of rail for Ireland and UK and. She replaces John Longthorne who has led the rail, bridges and structures team for the past two years. He will now take on the role as major projects director and will focus on positioning, bidding and delivery across the UK&I market. Ms Evans will focus on growing Aecom’s rail business and will lead the company’s multidisciplinary rail, bridges and structures teams. With over 30 years’ experience, Ms Evans has been responsible for the delivery of several major projects and held a number of positions across technology research, business development and engineering. She joins Aecom from Alstom, where she was managing director (Urban and Services) and responsible for the extension of Nottingham tram network.
Ronan Group Real Estate appoints new CEO as company aims for further growth
Developer Johnny Ronan’s company, Ronan Group Real Estate (RGRE), has announced the appointment of Rory Williams as its new chief executive officer. A former partner in the corporate and commercial department of blue-chip law firm Arthur Cox, Mr Williams previously served for 12 years as general counsel to Johnny Ronan and Richard Barrett’s company, Treasury Holdings, playing an important role in its expansion into China. Latterly, Mr Williams was chief legal officer to Ervia, the parent company of Irish Water and Gas Networks Ireland, leading a team of 20 legal professionals.
New Managing Director of Accenture Security Business in Ireland
Jacky Fox has been appointed managing director of Accenture Security in Ireland. As part of the Accenture executive management team, Ms Fox joins Accenture with 20 years’ experience in technology and security, having advised leading Irish and international organisations on managing their cyber risk. In her most recent role at Deloitte she led the Irish Cyber Security and IT Forensic practice. Prior to that she worked with Dell as a senior security specialist providing end to end consulting to government and financial services clients. Ms Fox was recently appointed as vice-chair for Cyber Ireland a national cyber security cluster that provides a collective voice to represent the needs and challenges of the cyber security sector across the country.
Sodexo selects Margot Slattery as Global Diversity Chief and Julie Ennis as Country President of Ireland
International service and catering group Sodexo has appointed a new global chief diversity officer, with its country president for Ireland Margot Slattery taking up the role. Ms Slattery will take up the role from September 1st, with the current managing director of corporate services Julie Ennis replacing her as country president. Ms Slattery, who has won a number of awards for her work in promoting diversity and inclusion in Ireland and abroad, will remain based in Ireland. Her new role will see her take responsibility for the strategic direction, implementation and alignment of Sodexo’s integrated global diversity and inclusion initiatives. Ms Ennis will combine the role with her existing position.
Keating appoints new Chief Operating Officer
Keating, the county Clare-based marine, civil engineering and building company, has announced the appointment of Marcus Carne as its new Chief Operating Officer. Mr. Carne will have responsibility for overseeing the implementation of the business operations and projects across Ireland and the UK. Mr. Carne has been a leading figure commercially for some of Ireland’s, the UK’s and Australia’s largest building and engineering firms including Laing O’Rourke and John Sisk & Son.
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.
Based in Dublin, The Botany Weaving Mill Company Limited is a family-owned company involved in the textile industry since 1934. The company specialises in the design and manufacture of seat fabrics, curtain fabrics and carpets for over 160 of the world’s leading airlines including British Airways, Quantas and Virgin Atlantic. The company has its head office, a weaving factory and design studio all located in Dublin, while it also has a specialist finishing plant and state-of-the-art carpet weaving factory located adjacent to each other in Donegal. In its most recent financial year, The Botany Weaving Mill Company saw revenue increase by 15.0% to c. €42.4m while EBITDA increased by a staggering 298.7% to c. €4.1m, up from c. €1.0m the previous year. The large jump in EBITDA was due to well managed cost of sales with the gross profit margin increasing from 15.2% in FY17 to 20.6% in FY18. EBITDA converted into a net cash increase of c. €2.4m which included a c. €8.5m payment to acquire intangible assets as well as c. €2.5m on fixed assets which largely attributed to plant and machinery. On top of this, there was a c. €12.5m issue of equity share capital which brought the end of year cash on the balance sheet to c. €7.8m. The company also had a bank loan of c. €356k leaving net assets at the end of the year at c. €25.3m, up 140.3% from c. €10.5m the previous year. The company employed an average of 151 people in FY18 at a cost of c. €5.5m for the year. The Botany Weaving Mill Company Limited is owned by Jonathan (76.79%) and Marguerite (23.21%) Hackett.
Based in Belfast, Portview Holdings Limited which trades as Portview, is a luxury interior fit-out company predominantly centred on high-end commercial, leisure and retails destinations. The company has won a number of awards and most recently won the ‘Best Companies to Work for in NI’ award in the annual Best Companies survey. In its most recent financial year, the company experienced significant growth with revenue increasing by 21.4% to c. £52.3m with c. £48.1m relating to UK turnover and the remainder to the Rest of Europe. EBITDA jumped an impressive 84.6% to c. £10.4m which was due to the increase in the gross profit margin from 18.5% in FY17 to 28.4% in FY18 while administrative expenses were flat between the years. There was a net cash increase of c. £2.1m which left c. £9.0m of cash on the balance sheet. The company employed on average 86 employees throughout the year at a cost of c. £5.6m. Portview Holdings Limited is owned by Sean McEvoy (33.26%), Simon Campbell (33.26%), Paul Scullion (18.48%), Wilson Lamont (5%), John McMahon (5%) and Melvin Hopps (5%).
RECENT FUNDRAISINGS
Who: BLK Box, a Belfast-based designer and manufacturer of fitness equipment. The company was set up in 2012 and is led by managing director Gregg Bradley.
What: The company has received €1.4m in funding from Dankse Bank.
Why: The funds are being used to recruit 12 new staff, expand its premises and invest in a new laser-cutting machine and press brake following several contract wins.
Source: Belfast Telegraph
Who: VRAI, an Irish technology company that specialises in virtual and augmented reality. The business was founded by Niall Campion and Pat O’Connor.
What: The company has raised €575k through the Enterprise Ireland High Potential Start Up Programme.
Why: The funds are being used to develop the company’s Hazardous Environment Awareness Training (Heat) virtual reality training platform.
Source: Irish Times
Who: The Pharmaceutical Manufacturing Technology Centre and University of Limerick’s Bernal Institute. The research centre provides advanced technology solutions for the pharma sector.
What: The state-funded centre has raised €5m in funding from Enterprise Ireland and support from IDA Ireland.
Source: University of Limerick
Who: Tyndall National Institute, a European research centre in integrated Information Communications Technology hardware and systems.
What: They have secured over €8m in European funding as part of the Horizon 2020 programme.
Source: Examiner Business
Who: HealthXL, a health-orientated IT company, which aggregates health information and provides it to global stakeholders, including blue-chip pharma companies, via its own platform and briefings has raised funding.
What: The business has reportedly raised €2m from Davy BDO EIIS Fund.
Why: HealthXL will use the investment to expand its offices in Ireland and Portugal, and to open a subsidiary in the US according to its founder and CEO, Martin Kelly
Source: The Sunday Times
Who: Brightflag, a legal operations-focused AI firm which uses machine learning and natural language processing to manage invoices, ebills, and to generate reports, has raised funding.
What: The business has reportedly raised €10m from backers including Paul Byrne, Brian Canniffe, Stephen McIntyre and Conor Stanely’s investment vehicle Tribal.
Source: The Sunday Times
Who: Aphix Software, a Drogheda-based provider of eCommerce and mobile ordering products which offer real-time integration into ERP and back office systems. The business was founded by Mark Reilly and Graham O’Rourke.
What: The business has reportedly raised an undisclosed amount of funding from Patrick Joy, formely of Suretank.
Source: The Sunday Times
Brexit movement in the Week
Instead of ‘Thought for the Week’, we are bringing you a weekly tracker using odds from oddschecker and taking off bookmakers margin to come up with deemed percentage probability of outcomes.
The current markets read as follows:
It was definitely a positive Brexit week, progress was made. The current markets read as follows as of Saturday AM:
Some Sort of Brexit by Christmas – 31% chance (59% last week)
No deal Brexit – 21% chance (43% last week)
Odds of What the Next Step Will Be:
Article 51 Extended beyond October 31st – 50% (from 22%)
General Election – 31% (from 29% last week)
Exit Without an Agreement- i.e. no deal Brexit – 6.5% (from 27% last week)
UK leave with a revised agreement 7% (from 11%)
All other next steps are sub 5% deemed probability.
If you are not in agreement with any of above you can get the odds here and back your opinion: Oddschecker – Brexit
@RenatusCapital Tweets
8%
The year-on-year decline in new car sales in Northern Ireland, according to the Society of Motor Manufacturers and Traders. @BelTel
2.7%
The expected decline in Northern Ireland’s economy in the event of a hard Brexit, according to a report from the Fraser of Allander Institute.
50.6
The score recorded on the IHS Markit services PMI survey for August, down from 51.4 in July. Any score below 50 indicates a contraction. @BelTel
0.5%
The year-on-year decline in the number of people that visited Ireland for the month of July, according to@CSOIreland
48.6
The score recorded on AIB’s Purchasing Managers’ Index for the month of August, a reading below 50 indicates a contraction.
€896m
The budget surplus for the first seven months of the year, according to the exchequer returns.
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
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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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