Renatus Weekly M&A & Company Performance Private Equity Newsletter 08/10/2023
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
Q3’23 Renatus M&A Review
We are pleased to introduce our updated M&A review for Q3’23. It provides an overview of:
M&A deal volume
Q3’23 M&A Picks
International & PE acquirers
Irish M&A deal volumes have experienced an increase quarter-on-quarter however they are still marginally down year-to-date. 118 deals were completed in Q3’23, in comparison to 112 in Q2’23. Looking at the bigger picture, for the first nine months of the year, Irish M&A deal volumes have experienced a slowdown with 316 deals completed as of Q3’23, compared to 333 in the same period last year.
The Financial Times reported that globally the value of merger and acquisition deals announced in the first nine months of the year equated to c. $2tn. This was the lowest level since 2013, down 28% vs. the same period in 2022.
Mega M&A deals are languishing at a 10-year low. With interest rates rising and debt capital markets tightening, it appears the mega deals are slowing down faster than the traditional mid-market SME deals.
Deal Details: Goodbody has acquired Clearstream Solutions. Deal consideration was not disclosed.
Goodbody is a financial services firm with offices in Dublin, London, Cork and Galway. The business which was formed in 1877 has c. 360 employees.
Clearstream Solutions is a Dublin-based provider of sustainability and carbon management services led by Brian O’Kennedy. The business employs c. 15 people and has major clients such as Keelings, Vodafone and AIB. The business does not report revenue or EBITDA information.
Advisers: Clearstream Solutions: Legal: Kearney Solicitors led by Colm Kearney Maeve Lynch and Nicky Lynch Tax: Purcell McQuillan led by Jane O’Hanlon and Deirdre O’Connell
Goodbody: Legal: Eversheds Sutherland led by Lee Murphy, Avis-Marie Mulvihill, Bridget Howard and Conor Fynes Tax: Grant Thornton
Renatus Comment: AIB acquired Goodbody in September 2021. As part of strategic refocus, Goodbody is reducing employee numbers in the Investment Banking division and moving the AIB’s equity capital team to Goodbody. Both AIB and Goodbody should benefit from Clearstream Solutions offering. Investment focus has increasingly shifted to focus more towards ESG initiatives as companies are looking to be better equipped to navigate regulatory, environmental, and social challenges. As part of the PwC Private Equity Responsible Survey 2021, 56% of private equity partners said they have refused to enter general partner agreements or turned down investments on ESG grounds.
Euro Actions acquires Michener Allen Auctioneering
Deal Details: Euro Auctions has acquired Michener Allen Auctioneering. Deal consideration was not disclosed.
Euro Auctions is a Tyrone-based auction service provider for industrial, construction and agricultural equipment. The business was founded in 1998 by Derek Keys and his brothers and has grown substantially employing more than 200 people across 14 countries. The business conducts over 60 major auctions annually, generating a global turnover in excess of a reported €600m.
Michener Allen Auctioneering is a Canadian industrial equipment and automotive auction company. The business has been operating for over 50 years with offices in Edmonton, Calgary and Winnipeg. The family-owned business has c. 50 employees and conducts a reported c. 50 auctions per year.
Advisers: None Mentioned
Renatus Comment: Ritchie Bros pulled out of the proposed €950m acquisition for Euro Auctions last year as it did not believe there was “any realistic prospect” the deal would be approved by the Competition and Markets Authority. Post the failed takeover, Euro auctions has focused on international growth. The acquisition of Michener Allen will see Euro Auctions further expand its presence in North America, with the business currently operating under the Yoder & Frey brand in the US.
Source: Irish Times
O&S Doors acquired by Rubicon Partners
Deal Details: O&S Doors is a Tyrone-based designer and manufacturer of a variety of kitchen, bedroom and bathroom cabinet products. The business had previously been acquired by Sun European Partners in July 2016. In FY Dec 21, the business reported turnover of c. £45.3m which converted to an EBITDA of c. £5.6m.
Rubicon Partners is an investment company focused on industrial businesses.
Advisers: Rubicon Partners: Financial & Tax DD: PwC Commercial DD: CIL Insurance: AON Legal: Proskauer Rose and Philip Lee ESG DD: Waterman Group Technology DD: Xaeus Blue
O&S Doors: None Mentioned
Renatus Comment: In October last year, Cardinal acquired a majority stake in another Northern Irish kitchen door manufacturer, uForm. Both business are looking to capitalise on the UK market opportunity given the fragmented nature of the market.
Source: Irish News
EMS acquired by Particle Measuring Systems, Inc
Deal Details: Particle Measuring Systems, Inc. has acquired Environmental Monitoring Services Irl. Limited and EMS Particle Solutions Ltd, collectively EMS. Deal consideration was not disclosed.
EMS operates in the cleanroom industry, delivering complete cleanroom monitoring and control solutions and services. The Dublin-based business was founded in 1988 and has grown to a team of over 20 employees. The business does not report revenue or EBITDA information.
Particle Measuring Systems is a leading contamination monitoring services provider headquartered in Boulder, Colorado. The company has over 600 employees, c. 35 distributors and c. 60 patents in over 50 countries globally.
Advisers: Particle Measuring Systems: Legal: Addleshaw Goddard (Manchester) and a Dublin team led by Lorna Osborne and Lauren Heffernan
EMS: Legal: Flynn O’Driscoll led by Alan O’Driscoll, Laura Melody-Moran and Bláthnaid Hamilton Corporate Finance: Tony Mulderry Tax: PwC led by Colm O’Callaghan and Aoife Kirrane
Renatus Comment: Particle Measuring Systems has partnered with EMS for c. 30 years as an exclusive sales and service channel for customers in the UK and Ireland and this deal aligns with Particle Measuring Systems’ strategy to be direct in every major market. Ireland is likely to be a lucrative market as companies such as Novartis, AbbVie, Janssen, Pfizer, Sanofi, Lilly, AstraZeneca, MSD, Bristol Myers Squibb and Takeda have significant operations here.
The Testing, Inspection and Certification (TIC) sector has seen increased international consolidation in recent years. This includes Amtivo Group acquiring EQA Ireland in 2023, SGS acquiring Gas Analysis Service in 2022, and Phenna Group acquiring Maurice Johnson & Partners in 2022 to name a few.
Source: EMS Press Release
Eastway acquired by Apleona
Deal Details: Eastway has been acquired by Apleona. Deal consideration was not disclosed.
Eastway is Limerick-based technology specialist that advises customers on condition-based and predictive maintenance solutions for critical assets such as HVAC units. The business does not report turnover or EBITDA information and it is owned by the Berkery family.
Apleona is a Germany-based real estate and facility services provider. PAI Partners acquired the business in 2020 for a reported transaction value of c. €1.6bn. The business employs over 40,000 people and it has operations in more than 30 countries.
Advisers: Eastway: Deal Advisers: EY team led by John Higgins, Peter Twomey and Éanna Brennan
Apleona: None Mentioned
Renatus Comment: This is Apleona’s second acquisition in Ireland following the Private Equity takeover. Private Equity owners in this space are using M&A activity to increase the global presence of these facilities management companies as there are a growing number of companies seeking to outsource property services for activities across the globe.
Source: Apleona Press Release
Greencoat Renewables acquires additional 22.5% stake in Butendiek wind farm
Deal Details: This deal marks the second stake in the wind farm after Greencoat Renewables acquired an initial 22.5% of Butendiek in February from Marguerite Pantheon. The consideration for the 22.5% stake is estimated to be worth c. €168m.
Greencoat Renewables PLC is an investor in renewable energy infrastructure assets that are euro-denominated with the majority of assets under management residing in Ireland. The business has an Enterprise Value in excess of c. €2.0bn. The company, headquartered in Dublin, is managed by Schroders Greencoat LLP, led by Paul O’Donnell in Ireland. It is reported that the group generated revenue of c. €218.4m in the six months ended June 30th, 2023.
Butendiek offshore wind farm is located in Germany’s exclusive economic zone in the North Sea and consists of 80 3.6MV turbines that have been in operation since 2015.
Advisers: None Mentioned
Renatus Comment: Greencoat Renewables has completed several transactions in Ireland but it has also expanded its presence across Europe. It has entered energy markets across Spain, France, Finland, and Sweden. In August 2023, Greencoat Renewables completed its third acquisition in the Spanish market, as it continues to deliver on its European expansion strategy.
Source: Business Post
Dungarvan Brewing Company sold to Tom Dauber
Deal Details: Dungarvan Brewing Company has been acquired by Tom Dauber. Deal consideration was not disclosed.
Dungarvan Brewing Company is a Waterford-based microbrewery. It was established in 2010 and was owned by Claire Dalton, Tom Dalton, Jennifer Uí Dhuibhir and Cormac O’Dwyer. The business does not report turnover or EBITDA information.
Advisers: None Mentioned
Renatus Comment: There have been a lot more winners of scale in the Irish whiskey market in recent years than craft breweries. A recent report from Bord Bia, Drinks Ireland and Independent Craft Brewers of Ireland (ICBI), showed that Irish craft beer sales rose by 17.5% over the period 2017 – 2022. The total export value of craft beer almost doubled over the period. Although the segment accounts for only 3.4% of the beer market, it is growing steadily with c. 79 independent microbreweries in operation in the Republic of Ireland in 2022.
Source: Irish Times
DEAL UPDATES & OTHER NEWS
Synlogic announces closing of $21m underwritten Public Offering
Deal Details: Synlogic Inc. (Nasdaq: SYBX) is a clinical-stage biotechnology company advancing novel, oral, non-systemically absorbed biotherapeutics to transform the care of serious diseases in need of new treatment options. The business is expecting to receive total gross proceeds of approximately c. $21m in a fully underwritten new share offering. Dr. Aoife Brennan joined Synlogic as Chief Medical Officer in 2016 and was promoted to CEO in October 2018. Prior to joining Synlogic, Aoife served as Vice President and Head of the Rare Disease Innovation Unit at Biogen.
Advisers: Chardan Capital Markets
Source: Sunday Times
Corcoran Chemicals is a Dublin-based distributor of a wide range of chemicals, packaging products and XPS Insulation. The company operates from three facilities, two in Dublin and one in the UK. The business is 100% owned by Andrew Byrne.
In its financial year to December 2022, the business generated a turnover of c. €73.7m, an increase of 37.8% year-on-year. This converted to an EBITDA of c. €4.0m, an increase of 16.1% year-on-year. Sales growth outstripping EBITDA growth is primarily atttributabe to a marginal decline in EBITDA margins year-on-year, falling from c. 16.4% to c. 14.8%.
Significant post-EBITDA cash movements include working capital investment of c. €1.7m, the payment of dividends of c. €0.4m and tax payments of c. €0.6m. The business finished the year with a cash balance of c. €3.9m, an increase of 39.7% year-on-year.
The business employed an average of 43 people in FY22 at a total cost of c. €3.9m.
Who: Spark, a Dublin-based product led Data and AI acceleration partner for SME and Enterprise customers.
What: The business has received €1m in investment from the EIIS Innovation Fund.
Why: The investment will fund the company’s expansion in Ireland, the UK, and North America with the business preparing for its first acquisition.
Source:EIIS Innovation Fund Press Release
Who: Shorla Oncology, a Tipperary-based healthcare start-up that develops pharmaceutical therapies to help cancer patient.
What: The business has raised $35 million in Series B funding.
Why: The funds will be used to accelerate growth of its oncology platform
Advisers: Wallace Corporate Counsel LLP led by Alan Ryan and Graham J. Coyne.
Who: Tantek 4D, a Sligo-based digital engineering and management services start-up.
What: The business has received a total of €600k in funding from Enterprise Ireland and Adstock Property Holdings.
Why: The company intends to use these funds for expansion with plans to recruit 30 additional staff, with 20 new hires based in Sligo and ten in Dublin.
Who: Nanobox, a spin-out from University College Dublin that has patented technology that generates nanobubbles by passing a mixture of the source gas and water through a low voltage electric field.
What: The business has raised €900k in funding. This funding was led by The Yield Lab, with the remainder coming from DeepIE Ventures and Growing Capital.
Why: The funding will be used to complete field trials in agriculture and aquaculture, with the aim of going to market in 2024.
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.