Renatus’ Weekly M&A Newsletter – 05/02/2023
February 5, 2023Renatus’ Weekly M&A Newsletter – 19/02/2023
February 20, 2023
Renatus Weekly M&A & Company Performance Private Equity Newsletter 12/02/2023
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
THOUGHT FOR THE WEEK
While the bedrock of our economy is indigenous business and entrepreneurship, the cream that keeps us in surplus is FDI.
We were often said to be the country rolling out the red carpet when others were rolling out red tape. Some question if we are as competitive in many ways and it was encouraging to see AstraZeneca recently announced it chose Ireland for a new manufacturing facility investment of $360m due to a business-friendly tax regime alongside Ireland’s commitment to rapidly delivering green energy over the next few years. Pascal Soriot, Chief Executive Officer said, “You need an environment that gives you good returns and incentive to invest.”
Ireland undoubtedly maintains a global reputation in the life sciences sector. The sector employs over 50,000 people and the largest biotech and pharma companies are based here. A few of the large multinationals’ investments that occurred in Ireland during 2022 include Pfizer’s €1bn investment in its new Clondalkin factory, Boston Scientific’s €100m expansion of its Galway operations, and Merck’s €440m expansion in Cork.
We hope to see more businesses enter an established ecosystem for pharmaceutical and biopharma activity, combining technology, talent, and research.
Zeus Packaging acquires Polpack
Zeus Packaging acquires Polpack
Deal Details: Zeus Packaging has acquired Polpack. Deal consideration was not disclosed.
Zeus Packaging is a global packaging company owned by Brian O’Sullivan. It is based in Dublin and was established in 1998. In FY Dec 21 it reported revenue of c. €287.5m which converted to EBITDA of c. €21.9m.
Polpack is a Polish distributor of packaging materials and machinery. It employs over 40 people and reportedly has revenues in excess of €8.5m. It was owned by Wojciech Zdzieborski.
Advisers: None Mentioned.
Renatus Comment: During his appearance on the Renatus podcast in March last year, Brian O’Sullivan discussed his firms’ growth strategy, navigating crises and winning EY Entrepreneur of the Year. You can listen to it here. Zeus Packaging is a truly remarkable Irish success story and listening to Brian you cannot help but be massively impressed with his knowledge and ambition. Zeus has continued its acquisition-led growth strategy over the past 12 months, with deals to acquire Canadian firm Agri-Flex as well as two UK-based companies, Swanline Group and BoxMart. This deal to acquire Polpack will expand Zeus’ presence in Poland, where it has operated since 2010. In total it now operates in 16 countries throughout Europe.
Source: Irish Times
Dawn Meats to acquire Kildare Chilling
Deal Details: Dawn Meats is to acquire Kildare Chilling. The deal is subject to CCPC approval.
Dawn Meats is a Waterford-based meat supplier with ten Irish facilities and twelve in the UK. Dawn Meats was founded by John & Peter Queally and Dan Browne. The business is reported to have over €2bn in annual revenue and employs 7,200 staff in eight countries.
Kildare Chilling is a Kildare-based beef and lamb supplier. The business markets its products under the Kildara and Heritage Town brands. It is owned by Ali Cenk Gulce. The business does not report turnover of EBITDA information.
Advisers: None Mentioned.
Renatus Comment: In 2020, Dawn Meats acquired Tyrone-based Dunbia to help cement its UK supply chain. Consolidation in the meat industry is evident with many older plants requiring more modern technology. It is reported that Dawn Meat’s acquisition of Kildare Chilling will see it gain another 5pc of the beef processing and a further 20-25pc of the sheep meat processing market in Ireland.
Source: Farming Independent
AventaMed acquired by KARL STORZ
Deal Details: AventaMed has been acquired by KARL STORZ for an undisclosed amount.
AventaMed is a Cork-based developer of novel ENT medical devices which allows grommets to be placed in a non-theatre setting
Headquartered in Tuttlingen, Germany, KARL STORZ is a global manufacturer and distributor of endoscopes, medical instruments, and devices. In FY20, the business reported turnover of c. €1.8bn which converted to an EBIT of c. €275.1m
Advisers:
AventaMed DAC:
Advisers: RDJ led by Diarmaid Gavin, Maria Walsh and Louise Buckley (Corporate and Commercial); and John Cuddigan, Mark Ludlow and David Rodgers (Tax).
KARL STORZ:
None Mentioned.
Renatus Comment: After gaining investment support through Enterprise Ireland and several angel investors based predominantly in Ireland, AventaMeddeveloped the Solo+ TTD, a single-use medical device that addresses the pain points of the current treatment of the ENT surgical tympanostomy procedure. The business will likely benefit from the international scale of KARL STORZ as it targets simplifying surgical procedures and reducing costs for healthcare providers.
Source: RDJ Press Release
OC Distributors acquired by Gedeon Richter
Deal Details: OC Distributors has been acquired by Gedeon Richter for a reported £32.5m.
OC Distributors is a Dublin-based wholesaler with distribution rights to a number of women’s healthcare products. Prior to the deal, it was owned by Consilient Health, a pharmaceutical business based in Dublin. OC Distributors does not report turnover or EBITDA information.
Gedeon Richter is a Hungarian manufacturer and retailer of pharmaceutical products. In FY Dec 21 it reported turnover of c. €1.8bn which converted to EBITDA of c. €490m. It is publically listed on the Budapest Stock Exchange and has operations in over 40 countries.
Advisers:
Gedeon Richter:
Legal: Debevoise & Plimpton LLP
OC Distributors:
None mentioned.
Renatus Comment: As we saw last week with Advanced Medical Solutions Group’s acquisition of Connexicon Medical, international PLCs acquiring Irish providers of healthcare and pharma products has become a common trend. These firms typically target firms with specific patents or in this case, distribution rights, to add to their broader suite of products. Although OC Distributors’ exact product offering is not clear, its previous parent Consilient Health offers drugs for contraception, menopause and urology.
Source: Business Post
Writech Fire Group to acquire Orbital Welding Solutions
Deal Details: Mullingar-based provider of fire protection systems Writech Fire Group is reported to be acquiring Orbital Welding Solutions. The deal is subject to CCPC approval.
Writech Fire Group was founded in 1981 by Mary and Thomas Wright before sons Ted and Alan took over in 2008. The business designs, manufactures, installs, and services fire systems across a range of sectors including data centres, life sciences, logistics, retail, office and food, and beverage. In its FY21, the business reported turnover of c. €22.3m which converted to an EBITDA of c. €6.3m
Orbital Welding Solutions is a Dublin-based business providing heating and plumbing installation-related services. It is owned by Shaun O’Connor and Patrick O’Connor and does not report turnover or EBITDA information.
Advisers: None Mentioned.
Renatus Comment: This is Writech Fire Group’s third acquisition as it acquired UK-based Compco Fire Systems back in March 2022 and Swedish Ce Sprinkler in May 2022. The business is undergoing significant expansion as it secured a new centre in 2022 to help drive its international growth. The business has been backed by Waterland since it made an investment in August 2021.
Source: CCPC
Banbridge Chronicle acquired by National World PLC
Deal Details: Banbridge Chronicle has been acquired by National World PLC for an undisclosed amount.
Banbridge Chronicle is a Newry-based newspaper that was first published in 1870. It was owned by the Hodgett family before being saved from closure by Bann Media Limited in 2022. The business does not report turnover or EBITDA information.
National World PLC is a UK-based operator of national news brands. In FY21, the business reported a turnover of c. £86m, which converted to an EBITDA of c. £10.3m.
Advisers: None Mentioned.
Renatus Comment: Banbridge Chronicle is entering new ownership for the second time in just over a year. National World PLC seems to be focusing on the Northern Irish market as it recently acquired The Newry Reporter in January 2023. Both The Newry Reporter and Banbridge Chronicle were previously owned by the Hodgett family. The ongoing consolidation in the regional press industry is working to save smaller papers from closure whilst broadening editorial offerings.
Source: Irish News
Harold Engineering acquires Campbell Machinery
Deal Details: Harold Engineering has acquired Campbell Machinery. Deal consideration was not disclosed.
Campbell Machinery is a provider of blast cleaning equipment in Ireland. Established in 1981, the business was owned by Ian and Peter Campbell. The business does not report turnover or EBITDA information.
Harold Engineering is a Dublin-based engineering company. It was originally founded in 1963 and focuses on Air Compressors, Garage Equipment, Gas Heating, Dust/Fume Extraction and Vacuum Pumps. The business does not report turnover or EBITDA information.
Advisers:
Campbell Machinery:
Corporate Finance: PKF led by David Lucas and Conor O’Rourke.
Legal: Philip Lee, led by Eoghan Doyle, Patrick Egan and Barry Mahon.
Harold Engineering:
Legal: AMOSS Solicitors led by Eoin MacKessy. Financial and Tax DD: Grant Thornton led by Patrick Dillon and Tom Roche.
Renatus Comment: In August 2021, Harold Engineering was acquired by Switch Ltd. with Danny Ormond assuming the role of CEO. The strategic focus of the deal was to develop products and services, as well as seek ‘bolt-on’ opportunities to introduce new complementary products. The acquisition of Campbell Machinery will see the business expand its offering in the blast cleaning and finishing solutions space, targeting new customers nationwide.
Source: PKF
Overhaul acquires Sensiguard
Deal Details: Overhaul has acquired Sensiguard for an undisclosed amount.
Overhaul is an Irish-founded supply-chain software business. The business was founded by David Broe and Barry Conlon in 2016 and has raised over $60m from backers. The business does not report turnover or EBITDA information.
Sensiguard was formerly named Freightwatch and was previously led by David Broe and Barry Conlon. The business was rebranded as part of an acquisition by Sensitech. The business focuses on cargo theft monitoring services and it does not report turnover or EBITDA information.
Advisers: None Mentioned.
Renatus Comment: Overhaul is headquartered in Austin but the European HQ is based in Louth. The acquisition will see Overhaul’s employee numbers increase from 200 to 650 as the business will expand its footprint with offices in Brazil, Mexico, and Czechia. The new roster of international clients will further supply chain capabilities, an area that has been exposed to significant difficulties on the back of Brexit and Covid. The acquisition will also enable Overhaul to target cargo security issues that global shippers and logistics providers are grappling with daily.
Source: Business Post
Buymie to be acquired by Dunnes Stores
Deal Details: Buymie is set to be acquired by Dunnes Stores for an undisclosed amount.
Buymie is an Irish grocery delivery service that allows customers to order from local stores using their mobile devices. The business was founded by Devan Hughes, Gabor Krasznai, and Art Sokhikyan. It does not report turnover or EBITDA information.
Dunnes Stores is an Irish retail chain that primarily sells food, clothes, and household items. It was founded by Ben Dunne in 1944. The business does not report turnover or EBITDA information.
Advisers: None Mentioned.
Renatus Comment: Buymie has experienced some headwinds from the cost of living crisis alongside the opening up of the economy. The business had previously raised €18m from investors and ran into some difficulties when looking for additional funding. The deal is expected to open up new growth opportunities for the business as it plans to enter Britain with the backing of Dunnes Stores. Devan Hughes, Co-Founder of Buymie is expected to continue to run the business after the Dunnes Stores takeover.
Source: Business Post
COMPANY PERFORMANCE
Tadg Riordan Motors Limited is a Meath-based Toyota dealership. The business was established in 1983 and is owned by Tadg Riordan and Timothy Riordan.
In its financial year to Feb 2022, the business generated a turnover of c. €45.2m, an increase of 55.2% year-on-year. This converted to an EBITDA of c. €1.8m, an increase of 45.6% year-on-year.
The business finished the year with a cash balance of €1.9m. This is a decrease of €66k on the previous year, driven primarily by working capital investment totalling €990k. Other significant cash outflows included €539k in debt repayments.
The business employed an average of 66 people in FY22 at a total cost of c. €2.9m.
MMD Communications (Holdings) Limited is the largest franchise of O2 (Telefónica UK Limited) stores within Northern Ireland & Scotland. It operates 16 stores and is owned by Maurice Devlin.
In its financial year to January 2022 the business generated a turnover of c. £22.6m, an increase of 14.2% year-on-year. This converted to c. £4.4m EBITDA, an increase of 21.3%. The increase in EBITDA was driven by revenue growth and a realisation of operating leverage.
The business finished the year with a cash balance of c. £3.7m, a c. £0.5m decrease on FY21. Significant post-EBITDA cash movements included working capital investment, tax payments and loan repayments.
The business employed an average of 170 people during the period at a total cost of c. £1.9m.
RECENT FUNDRAISINGS
Who: Spectrum.Life, a provider of in-person and digital mental health and wellbeing services.
What: The company has raised funding of €5m in a round led by Act Venture Capital.
Why: The funding will be used to improve the company’s technology platform and grow its team.
Source: Business Plus
Who: ENGAGE XR Holdings plc, a virtual reality technology company focused on becoming a leading global provider of virtual communications solutions.
What: The company has carried out a share placing to raise gross proceeds of approximately £8.8 million
Why: The funds will be used to bolster the firms balance sheet, allowing it to capitalise on future growth opportunities.
Advisors: Wallace Corporate Counsel LLP led by Alan Ryan, Michael Bambrick and Graham Coyne.
Bookrunners: Davy, finnCap and Shard.
Source: London Stock Exchange Press Release
Who: Ovagen, a Mayo-based producer of germ-free eggs.
What: The business has received €1.1m in funding from Halo Business Angel Network syndicates Irrus Investments and WxNW.
Why: The funding will be used to further carry out R&D evaluation trials on vaccine batches.
Source: Business Plus
Who: Teletherapy, a Cork-based speech therapy app.
What: The business has raised €700,000 in a seed funding round.
Why: The raise will be used to support UK expansion.
Source: The Currency
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.
@RenatusCapital Tweets
41%
The portion of Ireland’s electricity being provided by wind energy in January. According to @IrishExaminer.
€4bn
The figure of corporation tax receipts transferred to the state’s National Reserve Fund (NRF) from the country’s surging corporation tax receipts. According to @IrishExaminer.
15%
New electric cars licensed for the first time in January 2023, compared with 11% in January 2022. According to @CSO.
4.4%
The monthly unemployment rate for January 2023. According to @CSO.
16.3%
Grocery price inflation in the 12 weeks to 23rd January – the highest level seen since the consultants started tracking grocery inflation. According to @Kantar.
18.8%
The year-on-year increase in personal loans drawn down in 2022. According to @RTE.
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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.
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