InsightsNewsletterRenatus’ Weekly M&A Newsletter – 11/04/2021

Renatus’ Weekly M&A Newsletter – 11/04/2021

renatus logo

Dear Reader,

Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.

Renatus Welcomes Conor Mehigan

We in Renatus are delighted to welcome Cork-native Conor Mehigan to the Renatus team as an Associate Director and announce his appointment in our appointments section below.

Prior to joining Renatus, Conor spent five years in IBI Corporate Finance specialising in M&A, debt and private equity fundraising for private and public companies across a range of sectors. Before IBI Corporate Finance, Conor spent four years in Deloitte’s Corporate Finance Division, specialising in Transaction Services. We are chuffed to have come so far in Renatus to be able to bring in someone of Conor’s calibre to share in our journey.

M&A Activity

Sentenial to be acquired by EML

sentenial

Deal Details:  Irish-based payment solution provider Sentenial Group, including Nuapay, is being acquired by EML Payments. The deal is reported to be worth up to €110m, €70m of which will be paid upfront with an additional potential €40m of consideration linked to revenue targets for the next three years. The deal is subject to regulatory approval.

Sentenial is a specialist in bank Account-2-Account payments, including Direct Debit, Credit Transfer payments/ACH, Instant Payments and Open Banking. It is regulated in the UK and France, and processes c. €45bn per annum.

Nuapay, a wholly-owned subsidiary of Sentenial, is a regulated Payment Institution and provides next generation Fintech services that help businesses optimise their use of payments to boost growth and reduce costs.

Australian EML Payments (ASX: EML) provides an innovative payment solutions platform, helping businesses all over the world create better customer experiences.

Advisers: None mentioned.

Renatus Comment: This is a fantastic result for Sentenial’s founder and CEO Sean Fitzgerald who started the business in 2003. Fitzgerald and his team built a technology platform that is used by many of the major European banks. Sentenial’s revenue model is built around a SaaS offering coupled with fixed recurring charges and in FY18, the business generated c. €7.6m in revenue.

For EML, this acquisition will give them a highly scalable platform capable of rapid deployments in new markets. EML can export the technology into regions where it is already strong, including Australia and North America. This is EML’s third acquisition in Ireland having acquired Perfectcard DAC in 2018 and Prepaid Financial Services in 2019.

Prior to the transaction, filings show that there were 19 different shareholders in the company with the largest holders of ordinary shares being Sean and Cathal Fitzgerald. Enterprise Ireland were also backers of the company.

Source: Sentenial; Irish Times

CurrencyFair to merge with Australian company after investment from Standard Chartered

currencyfair

Deal Details: Irish Fintech firm CurrencyFair and Melbourne-based Assembly Payments announced their merger, triggered by a strategic investment from Standard Chartered. Financial details of the deal, which is subject to regulatory approval, were not disclosed.

CurrencyFair, founded in 2010 by Brett Meyers, provides a global cross-border exchange platform that helps users to save on large exchange fees. It serves c. 150k customers across Europe, Australia, New Zealand and Canada.

Assembly Payments’ platform automates complex payment workflows. It entered info a joint venture with SC Ventures in 2020 to set up a digital payment platform.

SC Ventures is the Standard Chartered Bank’s Innovation, Ventures and FinTech Investment Division.

Advisers: Patrick Quinlan, Deirdre MacCarthy and Will Darmody of Maples Group acted for CurrencyFair on this transaction.

Renatus Comment: CurrencyFair was founded in 2010 by Brett Myers and has grown to become a leading player in the peer-to-peer payments market.

Along the way it has completed a number of funding rounds to support its growth, raising nearly €25m from backers including, but not limited to, Frontline Ventures, Octopus Ventures and Proxy Ventures. It also used strategic acquisitions, acquiring Convoy Payments in 2018, as part of a €20m investment plan to tackle the Asian market.

The merged companies will focus on an integrated service offering that overcomes many of the technical, compliance or geographical complexities associated with more traditional financial service offerings.

Source: IBS Intelligence 

Briggs to acquire Laois Hire Services

Briggs Equipment Ireland

Deal Details: Briggs Equipment Ireland has entered into an unconditional agreement with HSS to acquire Laois Hire Services for €11.2m.

Laois Hire services is an Irish tool hire specialist with branches nationwide. It is currently part of UK-based equipment hire group HSS.

Briggs Equipment Ireland is the Irish arm of the Texas-based materials handling solutions company Briggs Equipment.

As part of the deal, HSS has entered a commercial agreement with Briggs for the cross hire of equipment.

Advisers: A Byrne Wallace team led by Partner Gerry Beausang and Senior Associate Jonathan Lynch advised HSS on the legals.

Dillon Eustace supported Briggs Equipment Ireland. The legal team was led by Philip Lea, Partner within the Corporate M&A team, and supported by Associate Joseph Lynch and Head of the Taxation team David Lawless. Senior Associate Brendan Cunnane led on the property aspects of the deal with support from Julia Drennan.

Renatus Comment: HSS acquired Laois Hire in 2005 from its founders Michael and Maureen Killeen for a reported consideration between €5m and €10m. At the time, the business was generating turnover of c. €6m. Filed accounts for Laois Hire show that the company has consistently grown revenue over the last five years, with revenue growing from €6.3m in FY14 to €16m in FY19. HSS is listed on the London Stock Exchange and backed by UK Private Equity Firm Exponent.

For Briggs, this acquisition will strengthen its position in the Irish market by bringing additional scale and helping to diversify its product and service offering in the market.

Source: HSS Press Release

Creane & Creane is acquired by PIB

creane&creane

Deal DetailsWexford-based insurance broker Creane & Creane Ltd has been acquired by PIB Group Ltd for an undisclosed amount.

Creane & Creane is a family-run insurance broker founded by late William Creane in 1945. It provides commercial and personal lines cover to retail and business customers.

London-based PIB is a dynamic independent insurance intermediary group that provides specialist commercial insurance solutions across the UK market and beyond since 2015.

Advisers: Brian O’Brien and Aimee Corcoran from Ger O’Mahoney’s PwC Advisory Team and supported by Robert Gubbins and Gearoid O’ Sullivan from the PwC Tax Team advised the shareholders of Creane & Creane.

Gar Smyth and Sean Hiney of Wallace Corporate Counsel and John Murphy of John A. Sinnott Solicitors provided legal advice to the vendors.

DLA Piper provided advice to the PIB Group. Matt Cole (Corporate Partner), Steve Duggan (Corporate Senior Associate) and Dara McDonald (Corporate Associate) led a multi-disciplinary DLA Piper team.

Renatus Comment: This deal is a continuation in the consolidation trend playing out in the Irish insurance brokerage sector. This space continues to get more concentrated as operators execute on acquisitive growth strategies. PIB is one of the players feeding into this having acquired Optis Insurance in 2019.

Creane & Creane was owned by Anthony & Olive Doyle (c. 87.5%) and Michael Mahon (12.5%). The business generated €3.4m revenue in FY19 and a reported EBITDA of c. €288k before any normalisation adjustments.

Source: PIB Press Release

Schroder sells Carrick Therapeutics Stake

carrick

Deal Details: Schroder UK Public Private Trust has sold its stake in Irish biopharmaceutical company Carrick Therapeutics to life science venture capital firm Roseta Capital.

Carrick Therapeutics was founded in 2016 by Elaine Sullivan and is focused on developing treatments to defeat many of the most aggressive and resistant forms of cancer. The company is headquartered in  NovaUCD and expanded into the US market in 2019.

Schroder UK Public Private Trust’s stake in Carrick was sold to Roseta along with its shares in six other companies for a reported £52m, a discount of c. 22% from the reported valuation in September 2020. At the time, Schroder’s stake in the company was valued at £18.2m.

Advisers: None mentioned.

Renatus Comment: Schroders UK Public Private Trust was formerly known as Woodford Patient Capital Trust and led by Neil Woodford. Schroder took over the fund and rebranded it in December 2019, following the well-documented implosion of the fund.

Proceeds from this transaction will be used to pay down a “meaningful” portion of the £107m debt burden it inherited from Woodford.

Woodford Patient Capital was an early backer of Carrick Therapeutics and participated in its reported $95m fundraise in 2016. Carrick Therapeutics Co-founder Elaine Sullivan was named emerging entrepreneur of the year at the EY awards in 2018.

Source: Irish Times

Deal Updates & Other News

Folens closing in on Hibernia deal

Deal Details: Folens, one of Ireland’s largest education book publishers, is reported to be closing in on a deal to buy out Hibernia College, an online provider of primary and post-primary school teacher training.

Hibernia, founded by Sean Rowland in 2000, is Ireland’s first and only accredited online third-level institution and has up to 4,000 students pursuing primary and post-primary education degrees.

Hibernia reported revenues of €12.3m and profits of c. €2m in FY19.

Source: Sunday Times

Malin completes sale of investee company

Deal Details: Life sciences investment company Malin Corp has announced the completion of its sale of investee company Kymab to Sanofi for an upfront payment of $1.1bn and up to $350m upon achievement of certain milestones.

Source: Irish Times

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.

GRAND HOTEL

Originally called “The Royal Hotel”, The Grand Hotel Malahide Ltd was built in 1835 by Mr. James Fagan of Feltrim who was a member of the British Parliament. In 1974 Matt Ryan became the next owner of the Hotel. During the present ownership of the Ryan family the Hotel has expanded from having 12 staff to nearly 200 while also building a large conference centre, 150 bedrooms, the Coast restaurant, new Reception area and Ryan’s Bar.

FY Dec ’19 was a positive financial year for the business as revenue increased by 1.3% YoY at €12.7m while EBITDA also increased by 5.2% YoY to stand at c. €3.2m. EBITDA converted to a net cash increase of c. €410k with the repayment of loans totalling c. €1.5m being the most significant drain on cash.

The hotel employed an average of 175 people over the year at a cost of c. €5.0m.

GRAND HOTEL FIGS
NEWELL STORES

Newell Group Ltd operates two supermarkets in Northern Ireland based in Dungannon and Coalisland, both of which trade under the brand Newell Stores. The supermarkets offer off licence, bakery, butchers, delicatessan and other services.

In its financial year to January 2020, the group reported revenue of c. £23.7m, which was marginally below FY19’s revenue while the business recorded EBITDA of c. £1.6m. EBITDA converted to a net cash increase of c. £598k after a new loans totalling c. £1.4m were drawn down while c. £1.6m of loans were repaid.

Newell Group is owned by Conway family members including Colin, Rosie, Joe, Petra and Annie. The Group employed an average of 338 people over the year at a cost of c. £3.7m.

NEWELL STORES FIGS

Fundraisings

Who: Tines, a cybersecurity automation start-up founded in 2018 by Eoin Hinchy and Thomas Kinsella, has raised financing.

What: The company raised $26m (€21.9m) giving it a valuation of $300m. The round was led by Addition. Also participating in the funding round was Accel, who previously co-led a $11m round for Tines in 2019, Blossom Capital, CrowdStrike and Silicon Valley CISO, a group of chief information security officers that operates as an angel investor syndicate.

Why: Tines intends to double headcount from 18 people to support product growth in the coming months. It is opening a hub in Boston and intends to recruit across engineering, customer success and sales.

Source: Irish Times

Who: Vetex, a Galway-based medical device firm that created a solution to reduce blood clots. The company is led by Mark Bruzzi.

What: It is reported that Helen Ryan, former Cregenna boss, and Paul Gilson, who sold Novate Medical to BTG in 2018, participated in a funding round.

Why: There was no stated use for the funds raised.

Source: Sunday Times

Who: Chatspace, an AI-powered insights and answers platform that helps to keep projects on track and prevent failures. The business is led by CEO and co-founder John Clancy.

What: It is reported that Mercury Engineering’s Eamonn O’Kane has backed the company.

Why: There was no stated use for the funds raised.

Source: Sunday Times

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.

Conor Mehigan

cm

Source:
(Google Images & LinkedIn)

renatus logo
cm bio

Andrew Graham

andrew graham

Source:
(Google Images & LinkedIn)

dunport
andrew bio

Colm O’Reilly

colm o reilly

Source:
(Google Images & LinkedIn)

news brands
colm bio

Brendan Lawlor

brendan lawlor

Source:
(Google & Farmers Journal)

ifac
brendan lawlor bio

Clyde Hutchinson

clyde

Source:
(Google Images & LinkedIn)

team abc
clyde bio

John Riordan

john riordan

Source:
(Google Images & LinkedIn)

grow remote
john bio

Thought for the Week

Whenever we look at a new opportunity, we ask ourselves two fundamental questions:

  • Is the current level of earnings sustainable; and
  • Is there a growth opportunity in the business?

When we look at Ireland Inc, it is very hard to see where the growth is going to come from and the sustainability of our current competitive positioning has been dealt a huge blow in the past week with US Administration throwing its weight behind a global minimum tax rate initiative.

Janet Yellen, the new US Treasury secretary and former chair of the US Federal Reserve, said during the week:

“We are working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom. Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and spurs innovation, growth, and prosperity.”

Ireland has long been a beneficiary from its low corporate tax rates. An article in Sky estimates that we have attracted more than 700 US companies as a result of our corporate tax regime.

We see this direction of travel as being a medium to long-term threat to Ireland Inc and something we should all be conscious of and really focus on innovating our way to a brighter future and trying to foster as much enterprise as we can from micro business to unicorn and assume what we have now will last forever. Thankfully we are entrepreneurial and resilient nation and we have within us to pivot to deal with any such shock in years to come from the US multinational effect.

@RenatusCapital Tweets

54.6

The AIB Services PMI for March 2021, a 13.4 point increase month-on-month. A reading over 50 indicates growth, according to @AIBBiz

5.2%

The year-on-year decrease in the value of monthly services index in Ireland for February 2021, with the most notable changes in Accommodation and Food Service Activities (-73.2%) and Information and Communication (+10.8%), according to @CSOIreland

42.8% & 53.4%

The year-on-year increase in the Irish manufacturing industries production and turnover, respectively, for February 2021, according to @CSOIreland

0.00%

The annual change in the Irish consumer price index for March 2021, with the most notable changes in Clothing & Footwear (-6.5%) and Restaurants & Hotels (+3.1%), according to @CSOIreland

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

Our Family of Investments

Current Portfolio:

Flew the Nest:


Sign up to the
Renatus Newsletter