Renatus Weekly M&A & Company Performance Private Equity Newsletter 11/12/2022

International Aerospace Coatings (IAC) Group has been acquired by Tiger Infrastructure Partners.

International Aerospace Coatings (IAC) Group specialises in aircraft painting. It was established in 2014 when Vance Street Capital merged Shannon-based Eirtech Aviation with California-based Leading Edge Aviation Services and Associated Painters. It is led by CEO Martin O’ConnelI.

Tiger Infrastructure Partners is a New York-based private equity fund that focuses on investment in infrastructrure assets. It was founded in 2010 by Emil Henry, Jr. This is its 7th investment from its Tiger Infrastructure Partners Fund III.

Advisers:
Vance Street Capital:
Legal: Arthur Cox led by Cian McCourt (Corporate and M&A) and Sergio Dos Santos (Corporate and M&A) and included Phil Cody and Eoin Hamill (Finance), Ailish Finnerty and Carl Grenville (Tax).

IAC:
None mentioned.

Tiger Infrastructure Partners:
None mentioned.

Renatus Comment: Ireland’s strong relationship with the aircraft-leasing industry is well publicised but there are also several other aviation-related industries with significant operations here. The Shannon branch of IAC (Eirtech Aviation) employs more than 250 people. The plane painting industry stands to benefit from the expected tailwinds in air travel over the coming years with predicted industry growth of c. 8% per annum. This deal between industry leader IAC and a major US private equity backer, positions Ireland strongly to hold a significant place in the sector going forward.

Source: The Independent

Deal Details: PwC has acquired Twomey Moran for an undisclosed sum.

Twomey Moran is a tax advisory business based in Dublin. It was established in 2010 following the split of Kennelly & Twomey into two separate companies. It was principally owned by David Moran and Kieran Twomey and employs c. 20 staff. It does not report turnover or EBITDA information.

PwC is a leading accounting, assurance and professional services firm with operations in over 150 countries. In FY 20, PwC Ireland reported revenue of c. €566m.

Advisers:
Twomey Moran:
Corporate Finance: Pegasus Capital led by Mark Metcalfe.

PwC:
None mentioned

Renatus Comment: We have reported a growing trend of consolidation plays within the professional services space in recent months, but it is by no means a recent phenomenon. Kieran Twomey of Twomey Moran worked at both PwC’s predecessors, Coopers & Lybrand, and PriceWaterhouse before they merged in 1998. Twomey left the firm the prior year to set up Kennelly & Twomey.

Source: Business Plus

Deal Details: Keywords Studios has acquired Helpshift. The acquisition is based on a conditional agreement and Keywords Studios will reportedly pay up to a  maximum of $75m.

Keywords Studios is an international technical and creative services provider to the global video games industry. It was founded in 1998 by Giorgio Guastalla and Teresa Luppino and is headquartered in Dublin. The company went public in 2013 and is currently led by Brendan Bodson. The business had FY21 revenues of c. £432.7m, which converted to an EBITDA of c. £72.8m.

Helpshift is a mobile-first customer service platform that manages and supports customer support issues in real-time for mobile apps and games. Helpshift was founded by Baishampayan Ghose and Abinash Tripathy in 2011, it is led by CEO, Eric Vermillion. It is headquartered in San Francisco and backed by True Ventures, Microsoft, Salesforce, and Nexus Venture Partners. The business is reported to be expecting revenues of c. $20m in FY22.

Advisers: None mentioned.

Renatus Comment: Since its IPO in June 2013, the Group has successfully made more than 50 acquisitions which have significantly extended its geographic reach, capacity and expertise. Its share price is up over 1800% in that time from £146.50 to £2,790. It is the only global, full-service provider in the market.

This bolt-on acquisition strategy seems to be supporting significant growth in the company with the business’ turnover growing from less than €135m in FY17 to over €430m as of December FY21. Combining conversational AI, automation, translation and agent support services, Helpshift fits with the player support service line offered by Keywords Studios.

Source: Irish Times

Deal Details: Sparks Lab Supplies has been acquired by Scientific Laboratory Supplies for an undisclosed amount.

Sparks Lab Supplies is a laboratory consumables, reagents, and equipment supplier based in Dublin. The business did not report turnover or EBITDA information.

Scientific Laboratory Supplies is a UK-based business that supplies equipment, chemicals, and consumables for laboratory use in the UK. In FY21, the business reported turnover of c. £80.0m which converted to an EBITDA of c. £5.6m.

Advisers:
Scientific Laboratory Supplies:
Legal: Philip Lee led by Anna Hickey, Andreas McConnell and Manuel Florendo (all Corporate) and John Somers (Property).
Financial Advisers: RSM.

Sparks Lab Supplies:
Corporate Finance: Bay Advisory led by Brian McDonald and Rory Butler.
Legal: BHSM led by Joe McVeigh and Sinead Mannion.

Renatus Comment: Scientific Laboratory Supplies has been very active in deal making during 2022, acquiring both Gem Scientific and Aurora Scientific earlier in the year. The acquisition will promote Scientific Laboratory Supplies’ entry into the Irish market as they will gain access to warehousing, logistics, and customer support whilst also working to mitigate the impact of Brexit for Irish customers. Sparks will continue to trade as Sparks Lab Supplies, retaining all employees whilst customers will get access to several new brands available through Scientific Laboratory Supplies portfolio of products.

Source: Scientific Laboratory Press Release 

Deal Details: Quantum 3 has been acquired by Burke Porter Group. Deal consideration has not been disclosed.

Quantum 3 (Q3) develops production, assembly, workspace and storage solutions for international medical and life sciences clients. The business was founded in 2000 by Pat Hayes and Paul McGrath and is headquartered in Clare. The business does not publish turnover or EBITDA information.

Burke Porter Group (BPG) is a global supplier of automated diagnostic, testing and production solutions serving the life science and speciality industrial end markets. It focuses on automating high-precision processes, leveraging its capabilities in microfluidics, optical design, additive manufacturing, motion control and software to develop solutions tailored to its customers’ needs. The business was founded in 1953 and is headquartered in Michigan. It does not publish turnover or EBITDA information.

Advisers:
Burke Porter Group:
Deal advisory: Benchmark International.

Quantum 3:
None mentioned.

Renatus Comment: This is the second acquisition Burke Porter Group has made since receiving backing from AEA Investors, a US-based private equity company, in July 2022. This acquisition expands BPG’s footprint to Ireland.

Ireland’s life sciences sector has a global reputation for operational and innovational excellence. According to Enterprise Ireland, the Life Science sector, across medical devices, pharma and bio in Ireland exports more than €45 billion annually and directly employs over 50,000 people.

Source: Burke Porter Press Release

Deal Details: Spearline has acquired Callstats from US-based 8×8. Deal details have not been disclosed.

Spearline is a communication testing technology company that monitors enterprise customers’ phone lines to diagnose, escalate and resolve issues. The business was founded in 2003 by Kevin Buckley and Matthew Lawlor and is headquartered in Cork. The business does not publish turnover or EBITDA information.

Callstats is a WebRTC call quality tool that improves productivity and enhances customer experiences, reducing agent downtime and boosting operational efficiency. It was ultimately owned by 8×8, a publicly listed provider of voice-over IP products. The business was founded in 2014 and is headquartered in California. The business does not publish turnover or EBITDA.

Advisers: None mentioned.

Renatus Comment: The acquisition of Callstats follows Spearlines’ 2021 acquisition of Israeli company, TestRTC. The acquisition was worth over €10m and triggered plans for US expansion. The business has scaled massively over the past year with plans announced at the beginning of the year to increase its global workforce by 106, to a total of 250. This acquisition positions it well to fulfil its ambitions of becoming the world’s number one provider of communication technology.

Source: Spearline Press Release

Deal Details: Midland Tyre Services has acquired Meyler’s truck and bus tyre division for an undisclosed amount.

Midland Tyre Services is a supplier of truck, agri, and off-the-road (OTR) tyres based in Laois with operations in Dublin and Limerick too. The business is owned by Noel Kingston and Christopher Parle. In FY21 the business reported turnover of c. €35.7m, which converted to EBITDA of c. €2.8m.

Meyler’s Tyres is a family-run supplier of tyres based in Wexford. The business was founded in 1993 by Paddy Meyler and is currently owned by his son Patsy Meyler. The business did not report turnover or EBITDA information.

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Advisers: None mentioned.

Renatus Comment: Noel Kingston’s company Vaslyn acquired Midland Tyre Services in 2019. The acquisition followed Valsyn’s initial investment in the company in 2017, which saw it restructured with a debt deal agreed with Close Brothers. Due to the non-discretionary nature of the commercial tyre industry, it is well protected from macroeconomic instability. The acquisition will strengthen Midland’s market position as the business can further expand its nationwide reach.

Source: Tyre Trade

Deal Details: ECC Group has acquired McDonald Surveys.

ECC Group is an engineering services firm based in Louth. It is owned by Colm Holmes and John Mc Goey. The business does report turnover or EBITDA information.

McDonald Surveys is a Louth-based provider of engineering surveying services to the construction sector. It was previously owned by Andrew and Sallyann McDonald. The business does not report turnover or EBITDA information.

Advisers: None mentioned.

Renatus Comment: The deal makes a lot of sense for two engineering services firms both based in the Dundalk area. It will allow McDonald Surveys to offer a wider range of engineering services to its existing tier-one clients while ECC Group will now expand its offering of surveying services in Europe, the United States and Australia (topographic, hydrographic and drone surveys as well as laser scanning and boundary mapping). The combined entity will employ over 70 people, making it one the country’s largest engineering firms.

Source: Dundalk Democrat

Deal Details: Riskhandler Solutions has been acquired by Applied Systems. Deal consideration has not been disclosed.

Riskhandler Solutions is an insurance software solution that enables an efficient digital distribution experience at each stage of the insurance life cycle. The SaaS platform enables rapid insurance product innovation and powerful underwriting controls for full-cycle rate, quote, and bind. The business is headquartered in Dublin. It was founded by Brendan Keenan and Martin Kennedy in 2012. It does not publish turnover or EBITDA information.

Applied Systems is a global cloud-based software company that provides agency and brokerage management systems across the US, Canada, the Republic of Ireland and the UK. Private equity firm Hellman & Friedman has been Applied’s majority shareholder since 2014, alongside minority shareholders Stone Point Capital, JMI Equity, and CapitalG. The business is headquartered in University Park, Illinois and was founded in 1980 by Robert Eustace. The business does not publish turnover or EBITDA information.

Advisers: None mentioned.

Renatus Comment: This is the second private equity-backed InsurTech deal in the past month with Deposify, backed by Sunriver Ventures, being acquired by Rhino at the end of last month. Private equity firms have shown interest in InsurTech as the insurance industry is well poised to take advantage of disruptive and innovative technology. InsurTech helps large insurance companies explore new options outside of traditional human efforts. These businesses are now beginning to consolidate in an effort to drive continued product innovation and expand distribution channels.

Source: Applied Solutions Press Release

Deal Details: Allied POS has been acquired by HL Display. Deal consideration was not disclosed.

Allied POS is a provider of Point-of-Sale solutions in Ireland, established in 2004. It was owned by John and Tracey Byrne. The business reportedly generates c. €2m of revenue annually.

HL Display is a global provider of in-store merchandising and communication solutions, based in Sweden. The company has net sales of c. 1,700 MSEK. It was acquired by the Ratos Group in 2010.

Advisers: None mentioned.

Renatus Comment: HL Display is the largest player in European merchandising and POS solutions. It has been active in pursuing consolidation of the European market in recent years, having acquired Italian company Display Italia and Dutch company Cool Presentation in 2021. HL has an exisiting Irish presence through its partner Shop Equipment Limited who sells to major retail groups like Musgraves and BWG. Allied POS will further expand the Group’s product offering in Ireland.

Source: HL Display Press Release

Deal Details: Encavis Asset Management AG has acquired a 27.6-MW wind farm project in Ireland for an undisclosed amount.

The wind farm is located off the west coast of Ireland and consists of a total of eight turbines. Five turbines are ready for construction and commissioning is currently planned for the end of 2023.

Encavis Asset Management AG is based in Hamburg and offers institutional fund solutions for investments in the growth market of Renewable Energies.

Advisers: None mentioned.

Renatus Comment: Once operational, the wind farm will be capable of producing electricity for c. 24,400 homes per year. This investment will aid Ireland’s policy aim to generate 70% of the country’s electricity from renewable sources by 2030.

Source: Renewables Now

Advisers:
Arachas:
FDD: Mazars led by Mark Mulcahy and Anthony Shiel.
Tax: Mazars led by Gerry Vahey & Nicole Hanlon.

D&D Insurances:
None mentioned.

Renatus Comment: Last week we covered Arachas’ acqusition of O’Malley-Griffin Insurances. This deal with D&D brings to eleven, the total number of acqusitions the company has made since it was acquired by Ardonagh in 2020. By acquiring a marine insurance specialist Arachas continues to strengthen its offering in each niche of the industry as it pursues its aggressive consolidation strategy.

Source: Arachas Press Release

Deal Details: Blulift has been acquireed by Briggs Equipment. Deal consideration was not disclosed.

Blulift is one of Ireland’s leading providers of powered access equipment and also offers training and maintenance services. It is based in Limerick and was owned by John Cusack. It does not report turnover or EBITDA information.

Briggs Equipment Ireland is a supplier of material handling equipment and machinery. It has sites in Lisburn and Dublin and is part of the wider Briggs Group. In FY20 the Irish entity reported turnover of c. €8.5m, which converted to EBITDA of c. €2.1m.

Advisers:
Briggs :
Legal: Pinsent Masons led by Oisín McLoughlin and inluding Sarah Hope and Maeve O’Brien.

Blulift:
None mentioned.

Renatus Comment: Briggs continue to be an active acquirer in the Irish market, having acquired Galway Plant and Tool Hire in September this year as well as Laois Hire and Balloo Hire in 2021. The company continues to strengthen its position in the Irish market by expanding its product offering across the plant hire space. It is a great result for Blulift owner John Cusack, having built his business for over two decades

Source: Briggs Equipment Press Release

Conack Construction Ltd. is a construction company based in Limerick. It is owned by Tom O’Connor and Kieran Cusack. Last week the owners were named best established entrepreneurs at the 25th annual EY Entrepreneur of the Year awards.

In its financial year to December 2021 the business generated a turnover of c. €121.9m, an increase of 66.8% year-on-year. This converted to c.€7.2m EBITDA, an increase of 141.6%. The increase in EBITDA was driven by a 2.86% improvement in gross margin and 2% improvement in operating margin.

The business finished the year with a cash balance of c.€25.5m, a c.€14.2m increase on FY20. Significant post-EBITDA cash movements included cash released from working capital and payments to acquire tangible investments.

The business employed a total of 144 people during the period at a total cost of c. €13.2m during the year.