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.
Deal Details: Irish food safety and traceability company Identigen has been acquired by Merck subsidy MSD Animal Health. The financial consideration of the deal was not disclosed, however, it is reported that early backer, MML Growth Capital Partners has more than doubled on its investment from the deal.
Founded in 1996, by Ciaran Meghen and Ronan Loftus as a Trinity college spin-out, its technology combines each species unique DNA and data analytics to accurately trace food back to its source.
MSD is a leading research-driven healthcare company employing more than 2,500 people in the ROI.
Advisers: Pegasus Capital advised Identigen on the sale, the Pegasus team was led by Donal O’Connell, Jack Cross and Rory O’Connell.
Martin Kelleher, Conall Geraghty and Angela Freeman of Mason, Hayes & Curran were the legal advisers.
Renatus Comment: The Food-Tech industry has become an increasingly active segment of the the M&A market recently. As people become more conscious about public health, there is a gap in the market to cater for this growing demand to know where our food comes from in the farm to fork chain. Arguably, this is true for traceability and other all other end materials, e.g. building materials, and the trend is expected to continue across many product verticals and industries.
Source: MSD
Deal Details: Cork-headquartered Granite Digital has acquired creative studio Connector for a reported c. €1m.
Dublin-based Connector offers digital communication and strategic services as well as digital products to several blue-chip clients including Huawei, HP and KBC.
Granite is one of Ireland’s leading digital agencies. It designs & develops custom web applications and provides digital marketing services to clients. It has been growing rapidly in recent years through acquisition, this being its ninth acquisition. It is expected that Connector will add c. €1m to the group’s turnover within the first year.
Shareholders of the company include Alf Smiddy, who is also chairman, Conor Buckley, Cormac O’Neill, Robert Carpenter, Sean Byrne, Ger O’Shea and Seamus White.
Advisors: None Mentioned.
Renatus Comment: Digital products and services are growing in demand as brands move away from traditional advertising due to retail and other sectors moving online. This acquisition will further allow Granite to leverage a broader spectrum of capabilities and take advantage of this shift in behaviour.
Source: Irish Independent
Deal Details: ISEQ-listed explorer United Oil and Gas is set to acquire the remaining 80% of the Walton Morant License from Tullow Oil. The financial consideration of the deal was not disclosed.
United already hold the other 20% stake and there was a nominal fee for taking full control, the company said in a statement.
A portion of the site has been voluntary relinquished, leaving an area of c.22.400km2 to be prospected.
The Jamaican government has extended the exploration period for the prospect to 18 months, giving United a lengthy period before a costly “drill-or-drop” decision is required.
Advisers: None mentioned
Renatus Comment: M&A activity in the oil & gas exploration industry has been relatively quiet in recent months. This sector has battled with the collapse in world oil prices amid the corona virus. Back in March oil was trading at US$23 per barrel- a price that falls well short of the c. $50-60 BEP to drill, distribute and market crude. Today crude is trading at c.$44, which reflect the shortage in oil inventories.
Source: The Irish Independent
Deal Details: MSD has agreed to buy Takeda’s state-of-the-art biologics plant in Dunboyne, Co. Meath for an undisclosed sum.
The plant was originally set up by rival company Shire before it was acquired by Takeda and it is reported that Shire had invested €375m in setting up the biologics manufacturing operation on the 120-acre site in Dunboyne.
It is reported that post Takeda’s acquisition of Shire, a strategic review of the company’s global biologics manufacturing network was initiated and it identified that the Dunboyne facility was no longer required.
The acquisition by Pharma giant MSD will secure all current jobs where around 200 workers are currently employed.
Advisers: Takeda was advised by PwC Corporate Finance led by Mark McEnroe, with legal advice from Arthur Cox led by Stephen Hegarty and Simon Hannigan.
McCann Fitzgerald, led by Conor O’Dwyer, acted for MSD.
Source: Irish Times
Shareholders in PrepayPower are set to share €16m following an internal restructuring of the business.
The pay-as-you-go utility company will complete a corporate restructuring to create a new holding company PrepayPower Group. The deal will be funded through a mixture of cash and shares in the new holding company which will acquire the existing holding company, PrepayPower Holdings.
In the company’s latest set of financial accounts, revenue was up almost 30% to c. €157.6m while the company reported a pre-tax profit of c. €9.4m.
Source: The Sunday Times
Irish owned medical technology company Nutriband has agreed terms to acquire Pocono Coated Products’ transdermal and health product manufacturing business. The deal is set to include the simultaneous acquisition by the North Carolina-based business of Active Intelligence kinesiology tape.
According to report, Pocono will become the manufacturing subsidiary of Nutriband while 4P Therapeutics, another subsidiary of Nutriband, will maintain clinical development opportunities.
Nutriband was founded by Dubliner Gareth Sheridan and was set up to use transdermal technology to improve treatments for patients, improve patient comfort and set safety standards for notoriously dangerous medications.
Source: Sunday Independent
Euronext-listed nursing home giant Orpea has been given regulatory approval to complete the purchase of a 50% stake in Brindley Healthcare through its acquisition company Arthopoda Limited.
Brindley operates 10 nursing homes in the State and is backed by Business Growth Fund (BGF) Ireland.
Source: CCPC
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 Co. Tyrone, M. Keys Limited is a leading pig farmer and Haulage transport company.
In FY19, M. Keys saw revenue increase by an impressive 18.2% to c. £29.1m while EBITDA decreased by 16.0% to c. £2.0m. This reduction was mainly due to the c.£700k increase in administrative expenses in FY19 coupled with a c.3% points drop in gross margin due to a significant increase in the cost of sales.
Net cash increased by c.£705k to leave and ending balance of c. £284k. The most significant cash outflow was an investment of c.£5.26m in fixed asset additions, predominantly freehold property. This was partially offset by the drawdown of c.£3.48m in new debt facilities.
The company hired an extra 7 people bringing the total headcount to 110 employees in FY19 at a total cost of c.£3.16m. Mr Malcom Keys and Mrs Darlene Keys together own 100% of M. Keys Limited.
Based in Dublin, the McHugh Group operates four Centra Supermarkets, two independent off-licenses and a restaurant.
In the latest fiscal year, the company saw revenue increase by 4.9% to c. €29.2m while EBITDA also increased by 5.1% to c. €1.5m despite an increase in operating costs. The company had a net cash increase of c. €270k after taking on new loans of c. €815k and fixed asset purchases of c. €2.5m.
The company employed an average of 199 employees during the year at a cost of c. €5.6m. The Group’s main shareholders are Gerard (52.3%), Diarmuid (15.4%) and Cathal (15.4%) McHugh as well as Brenda Doherty (15.4%).
Based in Cork, Quality Recycling Limited provides waste collection and processing for both domestic and commercial customers. It also operates a recycling plant in Co. Tipperary where it processes dry recyclables.
In FY19, Quality Recycling Ltd revenue increased marginally by 0.5% to c. €11.4m while EBITDA decreased by 32.8% to c. €1.5m. The reduction in EBITDA can be traced directly to a c. €900k increase in the pension contribution for Directors which was partially offset by a c. €180k reduction in Director emoluments.
Net cash increased by c. €1.0m leaving an ending balance of c. €2.1m. A dividend payment of c. €450k was the most significant drain on cash.
The company employed an average of 85 employees during the year at a cost of c. €4.2m. The company is owned by the O’Brien family.
Who: Agtech innovator MagGrow, founded by CEO Gary Wickham, has raised funds.
What: The company raised €6m in a series A funding round which was led by Astanor Ventures. WakeUp Capital, along with several other strategic international investors. This brings the total funds raised to €18m.
BDO’s Richard Duffy led the fundraise and provided corporate finance advice to MagGrow.
Why: The funds will be used to make additions to the Executive team and Board of Directors, accelerate research and development and increase the company’s manufacturing ability.
Source: MagGrow
Who: Rethink Ireland has announced a new round of its Innovate Together Fund. Headed by CEO Deirde Mortell, Rethink has aimed to provide funding for education, youth mental health and social enterprises in the past.
What: €5.5m fund managed by Rethink Ireland (formerly Social Innovation Fund Ireland). The Irish government has pledged €5m and Zurich Foundation have pledged €500k. Additional benefactors to the fund include, Medtronic, Twitter and Oakfield trust.
Why: The fund was set up in partnership with the government and is designed to help people and communities to respond to the challenges of Covid-19. This is an attempt to re-build and transition the economy in to a more sustainable one for the future.
Source: Irish Times
Who: Irish ticket sales platform, Tito, has raised funding.
What: The company raised €855k from the billionaire founder of Github, Tom Preston Werner, and others.
Why: The company had forecasted to reach a sales target of €1m a year and was hoping to double that to €2m next year until Covid-19 hit. The funds were expected to be used for growth but will now be used to help fund the company’s survival through the Covid-19 crisis.
Source: Sunday Business Post
Who: AIM-listed energy savings group eEnergy has secured funding.
What: eEnergy has secured a deal with access to a €15m funding facility. The funding facility is provided by Swiss Investment firm SUSI Partners via its Energy Efficiency Fund II.
Why: The facility provides the group’s Irish business with greater flexibility to deploy capital and extend the length of contracts offered to customers, improving the economics for the group – giving the group enhanced competitive advantage. eEnergy have highlighted that they are working with SUSI to develop a more long-term funding plan, with a future goal penetrate the UK market. Harry Sinclair, CEO of eEnergy says that the funding will enhance their growth outlook by increasing revenues and give them the extra capacity needed to take on more projects over the next few years.
Source: Irish Independent
Who: Neueda Technologies, a Belfast-based IT company, has announced further investment.
What: The company is investing £20m (€22.1m) into its operations. Invest Northern Ireland is supporting the investment with a £2.2m (€2.4m) contribution.
Why: COO Paddy O’Hagan outlined that Neueda expects increase its customer base to Europe, the US and eventually Asia with the extra resources from the investment. The company also plans to expand its headcount in Belfast to 450 people.
Source: Irish Times
Who: Canadian-based CI Investments has become a significant shareholder in Dalata.
What: CI Investments’ shareholding is worth c. €14m. Other significant investors include Ameriprise Financial, FMR, Blackrock and Allianz Global Investors.
Why: This comes as the investment firm took a 3% stake in the State’s largest hotel operator. Stock market rules stipulate that investors must disclose their shareholding once they own more than 3% of a public company.
Source: Irish Independent
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.
I hope Paschal Donohue and co were studying the initiative launched from Westminster last week over and above the reduction in vat from 20% to 5% for food outlets.
The government are sponsoring 50% off on food eaten in on Monday, Tuesday and Wednesday. Our experience in Boojum in Belfast is similar to that reported across the board in the weekend press where trade was up over 50% as a result of the initiative. It has been the reason we re-opened an otherwise Covid-marginal store in Belfast city centre so the economic paybacks of that alone would justify the initiative. It is creative thinking like this from our friends in Leinster House that could really turn the dial to get dormant sites open and drive activity and the associated employment and taxes that follow.
c. 33%
The year-on-year decrease in the number of Irish house building completions for Q2 2020, according to the Goodbody Analytics BER Housebuilding Tracker. @IrishTimes
57.3
The AIB IHS Markit purchasing managers’ index (PMI) for July 2020, up from 51 in June – the fastest growth in 2 years, a figure above 50 indicates growth. @IrishTimes
14.05%
The year-on-year decrease in the new car sales for July 2020 amounting to 21,213 registrations for the month, according to SIMI. @IrishTimes
17%
The year-on-year increase in the new car sales in Northern Ireland for July 2020 amounting to 4,398 new cars sold, making it the best July sales in 13 years. However, overall NI car sales in the first seven months of 2020 is 43% lower YoY, according to @BelTel_Business
16.7%
The COVID-19 adjusted unemployment rate in the Republic for July 2020 amounting to c. 386,935 persons unemployed, according to @CSOIreland
9%
The year-on-year decrease in the value of Ireland’s food exports for May 2020 amounting to nearly €100m fall from sales levels in May 2019, according to Bord Bia. @IndoBusiness
5.4% & 24.6%
The year-on-year increase in the Irish industrial production and turnover, respectively, for June 2020, according to @CSO
9.6%
The year-on-year decrease in the monthly services value index for June 2020 with the most notable changes in Information and Communication (+13.6%) and Accommodation and Food Service Activities (-69.6%), according to @CSO
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.
Receive this Newsletter Direct to your Inbox
To receive Renatus’ Weekly M&A Newsletter directly to your inbox, click the button below and subscribe to the newsletter.
