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.
If this pandemic has taught us anything it is that when our backs are to the wall, we are a resolute nation. There have been some great endeavours from Politicians, Civil Servants, Semi-states, Corporate Ireland and the wider community. We would find it impossible to identify any political or industry representative body who has shirked their responsibilities during these testing times.
Everybody knows that extending the current corporate and jobs life support measures are temporary and cannot be sustained medium term. While unaffordable as-is, they are not even saving all of those that deserve saving. To be clear, some supports already introduced will save some companies who left alone may have failed. However, removing the current supports and relying on the initiatives introduced thus far, with no new form of support during this twilight period between mass lockdown and unconstrained resumption will mean one thing for SMEs- mass failure and consequent economic carnage.
The worry is in these challenging times that engagement by politicians with business will be dominated by larger companies and the voice of the SMEs that represent 50 per cent of our workforce (and over 99 per cent of companies) will not be to the fore . Many SMEs are focused on one thing, survival, and do not have the PR departments or the lobbyists to have their situation understood and thus the law of unintended consequences could really kick in.
Business Post, ISME, Grid Finance, Restaurants Association Ireland and Retail Excellence have formed a great alliance chaired by John Moran to lobby the cause. They are supported by many other groups such as ‘Save our Restaurants Coalition’ where our portfolio company Boojum’s MD David Maxwell is very active. It is worth reading its mission here https://go.renatus.ie/e/
John Moran writes in today’s Business Post and makes a lot of sense. The highlights for me were:
“one business’s payables are another’s income. Don’t shuffle the pain along the chain. Resolve the liquidity crisis.”
“Using mainly additional government supported loan schemes, piling debt on weakened balance sheets is dangerous, it‘s kicking a broken can down the road. Our debt schemes could be less administratively complex. In France, which is ten times our size, nearly 300,000 firms had already accessed €43.2 billion of funding by April 23 – of those firms, 90 per cent were TPE (tres petites entreprises).”
Please take time to click on this link and support the plan to show our politicians that SMEs matter. Furthermore, make sure any politicians in your network are aware of the risk facing the economy if SMEs are just left to wither on the vine. The politicians are not mind readers, they need to be told about the facts and fragility of the current SME eco-system.
This isn’t about profit – it’s about survival. Please take a minute to click below and register your support.
Deal Details: Ellab has announced the acquisition of QualUs for an undisclosed sum.
Established in 2005, QualUs offers commissioning and validation contract services to the bio-pharmaceutical, medical device, hospital/dental and related life science, and healthcare industries. QualUs was owned by Gerard Collins.
The company specialises in thermal validation of all types of equipment, such as autoclaves, steam in place of bioreactors and process equipment/lines, depyrogenation tunnels, ovens, fridges, freezers, warehouses, incubators, and stability chambers.
Denmark-based Ellab A/S is a leading global provider of solutions and services for validating, measuring, recording, and monitoring critical parameters of thermal applications. Ellab A/S are private equity backed by EQT Partners.
Advisers: Holmes O’Malley Sexton Solicitors acted for Ellab A/S, led by Neil O’Gorman, Senior Associate on George Kennedy’s team.This is the second deal HOMS has advised on for Ellab / EQT within six months.
QualUs received legal advice from a team in Regan Wall, led by Adam Griffiths.
Renatus Comment: Ellab A/S was backed by EQT Partners, a UK private equity company, in September of 2019. Underpinning their partnership was Ellab’s desire to penetrate core EU markets after a successful launch of its services in Denmark and the US. Fast forward seven months, they have made three acquisitions, with QualUs being the latest.
This is a great case study in how an equity partner can accelerate strategic initiatives by bringing a focused business plan, access to capital and with speed of execution.
Source: Ellab
Deal Details: It has been reported this morning that insurance broker Arachas is to buy O’Driscoll O’Neill (“ODON”) for an undisclosed sum.
Arachas is one of Ireland’s largest insurance brokers, offering a wide range of cover to businesses across Ireland. The business has been backed by private equity for a number of years, making a number of strategic acquisitions and divestures along the way. This is the first acquisition since Arachas was acquired by US investors Madison Dearborn and HPS Investment Partners.
ODON was owned by Niall O’Driscoll and specialises in sporting and music insurance, a natural bolt-on for Arachas. ODON Designated Activity Company Ltd. had turnover of €7.8m and EBITDA of c. €330k at the end of 2018. Mr. O’Drsicoll is also reportedly the owner of Bray Wanderers.
Advisers: ODON received corporate finance advice from Capnua and legal from LK Shields. Arachas were advised on legals by Eversheds.
Renatus Comment: This acquisition is another in a wave of consolidation in the local brokerage sector with Arachas being a very active participant. This marks Arachas’ fifth acquisition in recent times along with a divesture of their financial planning unit last year. At the end of 2018, the business reported revenue of €24.1m and EBITDA of €7.9m.
Source: The Sunday Times
Deal Details: Flowers Made Easy is an online retailer of flowers and related services. The business operates in both the retail and wholesale space and holds one of the largest stock / ranges within the industry in its specialist refrigerated warehouse in Sandyford. Founded in 2006, it now reportedly has revenues in excess of €1m and was owned by Grant family members Eamonn, Mary and Michael prior to the sale.
The business has been acquired by Lisa O’Loughlin and Graham Conroy. The duo have ambitious plans for the coming years and intend to expand the business’ suite of services and products offered.
The terms of the transaction were not disclosed.
Advisers: None mentioned.
Renatus Comment: It is encouraging to see that transactions such as this are still happening in SME Ireland despite the economic uncertainty that is currently clouding business outlook. This business’ established e-commerce channel makes slightly more immune to challenges that other business models are facing.
Source: Flowers Made Easy Press Release
Convenience foods producer Greencore is rumoured to be in talks to acquire British company Adelie in a rescue takeover. Both Greencore and UK-headquartered Bakkavor have been linked to food-to-go business Adelie.
A spokesperson for Greencore stated mid-week that the company is “not commenting on media speculation”.
Adelie, which has been owned by asset manager Intermediate Capital Group (ICG) since 2016, produces branded and private-label sandwiches, salads, wraps, and snacks. Its customers include retailers, coffee shops and contract caterers. The company had revenue of circa £250m (€287m) at September 2018.
Source: Independent
Car Trawler is facing challenging financial times after the collapse of travel globally. The business is an online aggregator of car hire deals and offers deals through airlines and online travel partners which have been some of the most impacted sectors during this pandemic.
It has been reported that lenders to the business are set to face a significant write down of their loans in the face of this, potentially up to 50% of an estimated €140m of outstanding debt. Lenders to the business include Bank of Ireland, Llyods Bank and RBC who backed BC Partners’ and Insight Venture Partners’ acquisition of the business in 2014. Restructuring negotiations are believed to be ongoing between the debt and equity holders.
Source: The Sunday Times
Sanne has announced that it has completed its acquisition of Dublin-based Inbhear Fund Service Limited and Inbhear Management Services Limited (together “Inbhear”). The deal is reported to be valued at just over €14m. Inbhear is a fund administration and services company while Sanne is one of the largest administration companies in the world.
A Philip Lee team of Eoghan Doyle and Hugo Grattirola represented Inbhear on this transaction.
Source: Sanne Press Release
The High Court has appointed a provisional liquidator to the takeaway app Bamboo, that allows users to order and pick up meals from restaurants and cafes all over Ireland.
The Bamboo app, which launched in 2018, was designed to allow people to get meals from over 100 restaurants, in Galway, Dublin and Cork, located near their place of work.
The court heard the company behind the app, Mahalo Ltd, had been seeking fresh investment to develop its business, which generated revenue by charging a small commission on orders placed. Its financial situation significantly dipped after 95% of the restaurants which it had worked with closed due to the Covid-19 pandemic.
Source: The Irish Times
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.
Tullow Oil appoints new CEO
Rahul Dhir, who currently leads smaller Africa-focused oil and gas producer Delonex, has been announced as the new CEO of Tullow Oil. He brings significant experience to the role, with a mix of production (Cairn India) and exploration (Delonex) in Chad, Kenya and Ethiopia. He takes the helm at Tullow at a time when it is cutting its headcount by a third and trying to raise $1bn from selling at least part of its East African assets. Tullow has been under the interim leadership of executive chairman Dorothy Thompson since previous chief executive Paul McDade resigned in December after the group failed to hit production targets at flagship fields in Ghana.
Neon appoints new Deputy Managing Director
Gavin Downes has been appointed as deputy MD of Neon, the creative marketing and events agency. He joined from Clive where he was head of strategy for the EMEA region. Mr Downes has over 18 years’ experience across both B2B and B2C in UK, Ireland, Western Europe and Australia, working with global brands including Heineken, Vodafone, Three, O2, Nokia, Just Eat, Accenture, Facebook, Indeed, and Pinterest. As well as working with leading global brands, he has also lectured to Marketing Masters Students in the Smurfit Business School, contributed to marketing and business publications, and is a founding member of the Experiential Marketing Ireland network.
Empathy appoints new Managing Director
Empathy has announced the appointment of Stephen Rust as Managing Director of its new shopper research unit ‘Empathy Connects’. Mr Rust was previously joint MD of V360°, and over the course of his 20 year career has held senior leadership roles in Insight, Shopper and Strategic planning in companies such as eir, Kerry Foods, Diageo and Nielsen. In addition to his appointment, Empathy have also formed a strategic partnership with Mr Rust’s previous agency, V360° and will continue to offer both joint and stand-alone services to respective clients where relevant.
NUIG appoints new Adjunct Professor of Management
The National University of Ireland in Galway has appointed Mark Gantly as Adjunct Professor of Management at its JE Cairnes School of Business & Economics. Professor Gantly was until recently R&D Director at Hewlett Packard Enterprise in Galway having previously served as its Managing Director.
Linesight appoints new Global Head of Recruitment
Paul Victory has been appointed as Linesight’s new Global Head of Recruitment. Mr Victory joined Linesight last year to lead the firm’s recruitment function in the Americas region. Prior to this he worked as Recruitment Manager at Willis Munroe. His earlier career comprised periods at Kentz and Atlanco in senior recruitment roles.
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 Kilkenny, M. McGuire Haulage Limited is a leading haulage and excavation business in Ireland providing services such as bulk excavation, demolition, site clearance and transportation. In FY19, the company saw a significant rise in revenue of 44.4% to c. €35.5m while EBITDA also jumped an impressive 89.4% to c. €9.2m. The jump in EBITDA was largely due to well managed cost of sales resulting in a 6.2% increase to gross margins. The company employed an average of 175 employees in FY19 at a cost of c. €9.4m. There was a c. €1.1m cash increase during the year after working capital movements removed c. €1.5m of cash with the company also paying a €450k tax bill. The company also spent c. €3.3m on Capex, received c. €670k from the sale of fixed assets, and paid c. €3.4m on the capital element of finance lease contracts. Cash on the balance sheet stood at c. €1.6m against a debt balance of c. €5.0m. Net assets increased by 54.6% to c. €16.5m. The company is 100% owned by Martin McGuire.
Fitzpatrick Garages operates seven car dealerships in Kildare, Carlow and Offaly, representing four car brands including Mercedes, Honda, Hyundai and Opel as well as a wider used car range.
In its financial year to March 2019, turnover was €70.9m up 4.9% Y-o-Y while EBITDA was €1.8m, up 32.7% Y-o-Y. Cash increased by €1.5m, as can be seen in the adjacent table.
Directors credited their performance to enhanced used car sales, driven by better pricing strategies by management and sales staff.
Based in Co. Monaghan, Maguire International Limited is a flexible logistics company offering solutions from temperature-controlled distribution to bulk tankers and curtain sided trailers across Ireland, the UK and Europe with a focus on the Pharma, Food and Energy industries.
In FY19, the company saw revenue increase by 12.8% to c. €13.0m while EBITDA also increased by 27.7% to c. €1.5m. Revenue for the year was split into two different geographical buckets with c. €9.4m coming from Ireland and c. €3.7m coming from the UK and Europe. Cash increase by c. €175k after c. €1.7m was spent on fixed asset purchases as can be seen in the below table.
The company had a positive year despite the highly competitive trading conditions coupled with continued pressure on margins and the directors are hopeful they will continue to grow the business within the next year despite the increasing pressures.
Based in Co. Monaghan, Maguire International Limited is a flexible logistics company offering solutions from temperature-controlled distribution to bulk tankers and curtain sided trailers across Ireland, the UK and Europe with a focus on the Pharma, Food and Energy industries.
In FY19, the company saw revenue increase by 12.8% to c. €13.0m while EBITDA also increased by 27.7% to c. €1.5m. Revenue for the year was split into two different geographical buckets with c. €9.4m coming from Ireland and c. €3.7m coming from the UK and Europe. Cash increase by c. €175k after c. €1.7m was spent on fixed asset purchases as can be seen in the below table.
The company had a positive year despite the highly competitive trading conditions coupled with continued pressure on margins and the directors are hopeful they will continue to grow the business within the next year despite the increasing pressures.
Who: Digital-only bank N26, which claims 100,000 customers in the ROI, has raised funding.
What: The company has raised more than over $100m (€91.6m). The fundraise was an extension of its Series D founding round to more than $570m. Backers include Insight Venture Partners, GIC, Tencent, Allianz X, Peter Thiel’s Valar Ventures, Li Ka-Shing, Horizons Ventures, Earlybird Venture Capital, Greyhound Capital and Battery Ventures.
Why: The mobile bank stated it intends to use the additional financing to help accelerate its product development and to grow its presence across its 24 European markets and the US.
Source: Irish Times
Who: Home diagnostics company LetsGetChecked, which has almost 250 employees and operates in Dublin and New York, has secured funding.
What: The company has raised $71m (€65.4m). The latest round, which was oversubscribed, was led by Illumina Ventures and HLM Venture Partners. The funding round also attracted new investors including Deerfield, CommonFund Capital and Angeles Investments, while existing investors Transformation Capital, Optum Ventures and Qiming Venture Partners USA also participated.
Why: The company has a two-part test for coronavirus, with a blood test it states will give immediate results about an active infection, and a lab test that will confirm the results within 24 hours.
The latest round of funding will help support that, increasing manufacturing, supply and testing for Covid-19, as well as scaling-up its laboratory capacity.
Source: Irish Times
Who: Irish food start-up FIID intends to raise finance. FIID produce plant based ready to heat meals, selling through local supermarkets and online marketplaces such as Amazon.
What: The company intends to raise c. €500,000 later this year.
Why: FIID is hoping to capitalise on its early growth and expand its offering.
Source: Sunday Independent
Who: Online grocery delivery service Buymie has raised funds.
What: €2.2m comes from Sure Valley Ventures, ACT Venture Capital and, from Buymie’s chairman, Eamonn Quinn. Long-term investor in the firm Haatch Ventures also participated, as did BVP Investments and Enterprise Ireland. LK Shields team, led by Emmet Scully and assisted by Lester Sosa-Villatoro advised Sure Valley Ventures on its investment.
Why: The new funding will support Buymie in its target to increase revenues by 500% by the end of the year on last year’s figure.
Source: Irish Times
Who: Video Sherpa is an online video production platform that enables user to create and manage content easily. Initially focused on a range of sectors, including real estate, they have recently focused in on healthcare.
What:The business raised a reported €500,000 earlier this month.
Why: Video Sherpa is well placed to assist with new social distancing realities in healthcare. It recently signed a one year agreement with University Hospital Galway and their video platform will be used by clinicians to engage with patients.
Source: Business Post
Who: Cyber Risk International is a cybersecurity business which markets a SaaS platfom that helps companies automate the processes around managing cyber risk.
What: Cyber Risk has reportedly raised €1m from Enterprise Ireland and SOSV, a VC owned by notable investor Sean O’Sullivan.
Why: The company has plans to expand into the US market.
Source: Business Post
Who: Gaming solutions company GAN has listed on the NASDAQ, moving from the AIM in London. GAN provides enterprise level B2B internet gambling software in the US. Notable investors include Smurfit family members Dermot Jnr, Michael Snr, Michael Jnr and Dermot Desmond.
What: The business listed on the NASDAQ, moving its shares from the AIM in London.
Why: With substantial operations in the US, directors believe that the ease of trading for US investors, enhanced liquidity and more significant reporting coverage by US analysts will all be beneficial for the business.
Source: The Sunday Times
c. 17% & c. 21%
The respective declines in beef prices & dairy commodity prices to Irish farmers since Europe went into lockdown. According to UCD Professor of Agriculture and Food Economics, Michael Wallace. @farmersjournal
€312bn
The sum of so-called “phantom” capital passing through Ireland to finance operations elsewhere, accounting for more than a third of foreign direct investment (FDI) in the ROI in 2018. According to the @CSOIreland. @IrishTimesBiz
8%
The projected rate at which the Irish economy will shrink this year as a result of the coronavirus pandemic. According to “Spring Forecasts” from the @EU_Commission .
€7.5bn
The Irish government deficit at the end of April 2020. This is €4.28bn worse than the same date in 2019, According to @IRLDeptFinance
5.5%
The expected rate of contraction for the Eurozone’s economy for 2020 due to the coronavirus pandemic, with the previous survey predicting 1.1% GDP growth this year. According to a survey of professional forecasters published by the European Central Bank @ecb. @IndoBusiness
4.6% & 7.2%
The overall y-o-y decline in residential sales both nationally and in Dublin for Q1 of this year – its lowest level in three years. Sales in Dublin were down to 3,482 compared to 3,751 a year earlier. According to @MyHomeProperty . @IrishTimesBiz
97%
The decline in new car sales in the UK last month, with c. 4,000 new cars registered in April 2020 compared with 161,000 in April 2019, this follows the Irish figures released last week that saw car sales fall 96% y-o-y. According to preliminary figures released by @SMMT.
28.2%
The current Irish unemployment rate as of April 2020, accounting for a record high 694,683 workers. It is a 15.5% rise from figures published in March. These figures include those who are receiving the €350 a week pandemic unemployment payment. According to @CSOIreland.
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