Renatus’ Weekly M&A Newsletter – 05/03/2023
March 5, 2023Renatus’ Weekly M&A Newsletter – 19/03/2023
March 19, 2023
Renatus Weekly M&A & Company Performance Private Equity Newsletter 12/03/2023
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
THOUGHT FOR THE WEEK
The table below as of this week shows the spread on the Irish 10-Year government bond yield versus UK and Germany.
The markets view our covenant almost the same as Germany and significantly better than the UK. At one stage in the past fortnight some Irish bonds traded less than German.
This is hugely positive and suggests we are a lot less vulnerable than at the time of the global financial crisis when our covenant was trading at a junk covenant compared to UK and Germany.
Coming out of the Covid-19 pandemic, Ireland’s GDP grew by 13.6% in 2021, versus 2.6% and 7.5% in Germany and UK, respectively.
With the macroeconomic and geo-political threats it is no time to be complacent but it is comforting to know we are seen to be more robust now than over a decade ago.
M&A Activity
Titan Solutions acquired by BioTouch
Deal Details: Shannon-based Titan Solutions has been acquired by BioTouch for an undisclosed amount.
Titan Solutions provides supply chain solutions across a broad range of industries. Titan Solutions’ HQ is based in Shannon, but the business has operations globally across The Netherlands, USA, and South Africa. The business was founded in 2011 and is led by Paul Collins. The business does not report turnover or EBITDA information.
BioTouch is a US-based medical supplies and logistics services company. The business was founded in 2018 and is backed by Atlantic Street Capital. The business does not report turnover or EBITDA information.
Advisers:
BioTouch:
Legal: Simmons & Simmons led by David Brangham and supported by Jennifer Watters, Christine Quigley, Geoffrey Curran, Martin Phelan, Ruth Crawley, Derek Lawlor, Jeffrey Horahan and Ciarán Cronin (Dublin). Eitan Tabak and Matthew Klegon (US).
Titan Solutions:
None Mentioned
Renatus Comment: Ireland’s life sciences and digital health sector is robust with over 84,000 employees in over 700 companies as well as 9 of the world’s top 10 MedTech companies. The acquisition of Titan Solutions will enhance BioTouch’s ability to serve European clients and will support new temperature controlled product development and material growth within the clinical trials and pharma industries.
Source: Irish Times
Amarenco acquires 90% stake in Infram Energy
Deal Details: Amarenco has acquired a reported 90% stake in Infram Energy for an undisclosed amount.
Amarenco Group is a Cork-based power producer in the solar energy sector and operates in more than 14 countries around the world. The Amarenco Group was founded in 2018 from the merger of two companies including Méthode Carré, a French design office and project management company and Amarenco. In FY21, the business reported turnover of c. €81.4m which converted to an EBITDA of c. €13.9m.
Infram Energy is a renewable energy aggregation platform established by Infracapital. Infracapital is a European infrastructure investor. The business was founded in 2001 and has invested in over 60 European companies
Advisers:
Amarenco:
Legal: Holmes led by Stephen Walker and Rachel Jones (Corporate team) and Lisa Killeen and Kevin Harty (Banking & Finance team).
Infram Energy:
None Mentioned.
Renatus Comment: Amarenco originally partnered with M&G Investments’ affiliate, Infracapital, to form Infram Energy in 2017, with the business growing from an initial 19MW portfolio to a 220-site portfolio yielding over 125MW in energy. The deal to acquire Infracapital underlines the scale which Cork-based Amarenco has achieved over the last number of years under the leadership of co-founder and EMEA CEO, John Mullins.
While scaling internationally, Amarenco is playing a crucial role in the Irish government’s aim to achieve 80% of its electricity from renewable energy by 2030, having most recently won contracts for several projects with Eirgrid as part of a wider scheme to supply more than 2,700MW of power to Irish homes.
Source: Infracapital Press Release
COMPANY PERFORMANCE
Fitzpatricks Garage Group Limited is a Kildare-based multi-franchise motor business founded in 1951. The business was founded by Jimmy Fitzpatrick, an uncle of the current Managing Director, Andy Fitzpatrick.
In its financial year to March 2022, the business generated a turnover of c. €86.7m, an increase of 37% year-on-year. This converted to an EBITDA of c. €4.6m, an increase of 101% year-on-year. Relative EBITDA outperformance can be attributed to increased gross margin and a reduction in operating expenses as a percentage of revenue.
Significant post-EBITDA cash movements include working capital investment of c. €1.8m and redemption of share capital of c. €1.8m. The business finished the year with a cash balance of c. €6.8m, an increase of 4% year-on-year.
The business employed an average of 116 people in FY22 at a total cost of c. €5.4m.
Priority Drilling Limited provides drilling and construction services using state of the art drilling equipment. The business is based in Ballinasloe, Co. Galway and owned by Mary and Michael McCarthy.
Priority Drilling had FY22 turnover of €14.3m, which converted to an EBITDA of €4.3m. This represented year-on-year growth of 33.8% and 61.3% respectively. EBITDA margins increased year-on-year owing largely to an improvement in the business’ gross margin.
The business finished the year with a cash balance of €3.5m, a fall of €1.5m year-on-year. This is largely the result of significant investment in working capital, totalling €5.6m, along with fixed asset purchases of €3.3m.
Priority Drilling employed an average of 88 people over the year at an annual cost of €5.9m.
RECENT FUNDRAISINGS
Who: GenoMe, a Belfast-based cancer diagnosis company.
What: The business has closed a £1.4m funding round by QUBIS, the commercialisation arm of Queen’s University Belfast managed by Clarendon Fund Managers and Deepbridge Capital.
Why: The funding will be used to extend its novel technology to additional cancer types and to hire additional staff.
Source: Business Plus
Who: Blue Pet Co, a Kerry-based eco-friendly pet nutrition company.
What: The business has raised $200,000 in funding after becoming one of the six start-ups selected to join the Leap Venture Studio & Academy in Tennessee, a pet care specific accelerator.
Why: The business will use the funding to expand into the US and Australian markets this year.
Source: Business Plus
Who: Overhaul, an Irish-founded supply chain software company led by Barry Conlon and David Broe.
What: The business has secured $73m in growth capital, including $38m in equity and $35m in non-dilutive debt. The funding was led by Edison Partners with participation from investors eGateway Capital, Stepstone Group and TRM Ventures, while Stifel Bank provided the debt financing.
Why: The funding will be used to transform supply chain visibility and risk management.
Source: Business Plus
Who: Ufurnish, an online home furniture marketplace founded by Irish businesswoman Deirdre McGettrick.
What: The business has raised £3.4m in seed funding following an earlier £1.8m pre-seed round in 2020.
Why: The latest funding will be used to grow brand awareness and to expand retail partnerships.
Source: RTE
Who: Klearcom, a provider of global Voice and IVR testing capabilities to organisations with a dependency on customer communication.
What: The business has raised €1.5m in a pre-series A funding round led by Furthr VC.
Why: The new investment will be used to advance product development from Klearcom’s Waterford base.
Advisers: A Wallace Corporate Counsel team of Alan Ryan, Graham Coyne, Fran Keogh, and Louis Coleman.
Source: Klearcom Press Release
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
5%
The Central Bank of Ireland’s expectation of what Irish inflation will ease to this year. According to @centralbank_ie.
16%
Grocery Price Inflation in the 12 weeks to the middle of February 2023. According to @Kantar.
20%
The Households Saving Rate in Ireland in the fourth quarter of 2022. According to @CSOIreland.
24%
The year-on-year increase in the value of Irish agricultural output. According to @CSOIreland.
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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.
OUR INVESTMENTS
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