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.
Renatus are conducting a short survey amongst its valued network to establish the effect of Covid-19.
We believe the wisdom of our newsletter readers and LinkedIn friends shared with each other may help us all navigate through these choppy waters and plan for the other side.
All responses are anonymous as per GDPR guidelines.
For the first time in a very long time there were no Irish centric deals announced as completed this week. It is indicative of the times we are in and the uncertainty facing all stakeholders in a transaction.
However, MBOs that were about to complete and in negotiation are still on the table, acquisitions of other companies still make sense and people needing growth capital will be more evident than ever. Furthermore, entrepreneurs’ desire for succession and partial or full exit will be heightened when they realise the risk to having the majority of their wealth stuck in their one company.
For all the above reasons, we don’t expect a complete hiatus for the year. The structure of deals will likely change to share the risk of recovery between both vendor and investor. We expect banks to remain open to provide debt for great companies run by great people to a level but there will be an equity gap.
Here in Renatus we are very much open for business to fill that equity gap. We had a number of deals in discussion before this pandemic hit. A third of those we are continuing discussions on, a third we will postpone until the second half of this year to allow the companies deal with the change and a third we will postpone until next year. Over and above these, we have had a number of inbound calls in recent weeks from great companies who either want to take some chips off ahead of a five year plan or who want firepower to capitalise on opportunities that may arise over the months ahead.
The lines are open, contact us any time. Reply to this mail or call +3531 5549269.
Wishing you a safe and happy Easter from all at Renatus.
Initially reported in early March, Version 1’s acquisition of digital consulting firm Singlepoint has been cleared by the CCPC.
Version 1 was founded in 1996 by Justin Keatinge and John Mullen but is now owned by Volpi Capital. The business implements IT systems for large corporates and government departments and also provides consultancy services. It has offices in Dublin, Belfast, Cork, Edinburgh, Manchester and London. Partners include Microsoft, Amazon and Oracle. This is the 4th acuisition since Volpi’s investment with many more completed pre-Volpi. It is a great example of how focused acquisitions can create excellent returns.
Dublin-based Singlepoint has 120 employees with expertise in Digital & Cloud Solutions, AI, Analytics and Technology Delivery.
Singlepoint received corporate finance advice from John Curtin and Christopher Jordan of Clearwater International.
Source: CCPC, Version 1 Press Release
A liquidator has been appointed to Irish solar farm developer Terra Solar. The business which is led by Andre Fernon and David Fewer is to be wound up and commercially viable sites are to be transferred to ESB.
The ESB had previously reportedly invested €2.5m in the business for a 25% stake in 2016 but had since written this down significantly.
Source: The Sunday 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.
Boardroom changes at ABP Group
Beef processor ABP Food Group has appointed John Moloney, Tom Kirwan, and Fergal O’Dwyer as new non-executive directors to its board. The new appointees join Larry Goodman, executive chair, and Frank Stephenson, group CEO, on the board. Mr Moloney’s 33-year career in the food and agribusiness sector included being group MD of Glanbia, 2001-13, plus other senior roles with Glanbia and meat industry roles in the Department of Agriculture and Food. Mr Moloney is currently a non-executive director of DCC, where he is chair, and of Smurfit Kappa Group. He also served a seven-year term as a non-executive director of Greencore up to January of this year. Mr Kirwan joins the board having stepped down as ABP UK managing director last October. He began his career at ABP Cahir, then moved to senior roles with ABP UK. Mr O’Dwyer, CFO of DCC, also joins the board. He is stepping down from his executive role in July, a position he has held since 1994. He has also worked with KPMG and PwC in audit and corporate finance. ABP has also appointed Finbarr McDonnell and Mark Goodman, who are both executives in the group, to the board.
Expleo appoints new Client Director
Mark Kenny has been appointed as client director for the retail banking division of tech services provider Expleo. Mr Kenny was previously a client partner at HCL Technologies, where he oversaw the introduction of a new cloud support service. He also spent 10 years at IBM, specialising in IT outsourcing for businesses.
Ecocem Ireland names new Managing Director
Susan McGarry has been appointed as MD of Ecocem Ireland, which produces ground granulated blastfurnace slag (GGBS), an eco byproduct from the steel industry that partially replaces traditional cement in concrete. A chartered engineer, she has worked for Ecocem for nine years in a variety of roles, most recently as European sustainability manager. Ms McGarry also guest lectures in TCD and TU Dublin, and is a qualified LEED Green Associate.
Matheson continues to add to its Partner team
Law firm, Matheson, has appointed Philip Tully as a partner in its tax practice. Mr Tully joined the firm in 2009 as a trainee solicitor. He rose steadily through the ranks and was appointed as an Associate in 2015. He is a Chartered Tax Advisor and a graduate of UCD.
New Deputy Financial Services & Pensions Ombudsman appointed
Solicitor MaryRose McGovern has been promoted to deputy financial services and pensions ombudsman. Finance Minister Paschal Donohoe appointed Ms McGovern to take up the new role as deputy ombudsman from 20 April 2020, as well as reappointing Ger Deering as the ombudsman. Ms McGovern is a graduate of Trinity College Dublin School of Law and worked for many years as a solicitor in private practice. She was a litigation partner at a law firm specialising in insurance and commercial litigation. She joined the Ombudsman for Credit Institutions in 2001 and, following the establishment of the Financial Services Ombudsman’s Bureau in 2008, she was appointed its head of investigations. With the establishment of the Financial Services and Pensions Ombudsman (FSPO) in January 2018, Ms McGovern was appointed director of investigation, adjudication and legal services.
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.
| Formpress Publishing Limited is a newspaper publisher which is responsible for the titles 20 titles including ‘The Limerick Leader’, ‘The Dundalk Democrat’ and ‘The Leinster Leader’. It is the subsidiary of Mediaforce, a UK media group. In its financial year to March 2019, the business had revenue of €12.2m and EBITDA of c. €1.7m. EBITDA increased by 13.2% on flat revenue growth after the business reduced its employee numbers by 4, saving c. €267k. In all, the business employs 149 persons at a total cost of c. €6.3m. EBITDA converted to a net cash increase of c. €296k after significant working capital movements were a drain on cash. At the end of the year, the business had a cash balance of c. €2.1m. In 2019, Formpress acquired River Media Group, a similar business responsible for the titles ‘Kildare Post’, ‘Donegal Post’, among others. |
Ward & Burke Construction Limited is a construction company based in Galway that specialises in bespoke design and quality construction of water and wastewater infrastructure with all associated mechanical & electrical, civil, and environmental activities in Ireland and the UK. The company’s portfolio also encompasses bridge and road infrastructure projects. In its FY19 accounts, the company saw revenue increase marginally by 3.9% to c. €139.1m while EBITDA also increased slightly by 4.7% to c. €4.0m. The company employed an average of 439 staff during the year at a cost of c. €30.3m. There was a cash decrease of c. €1.3m in FY19 with significant working capital movements accounting for the biggest drain on cash using c. €5.2m. Cash on the balance sheet stood at c. €3.1m with no debt. Net assets increased by 14.2% to c. €31.5m. The company is owned Padraig Burke (33%), Michael Ward (33%) and Robert Ward (33%).
Based in Laois, First Ireland Spirits (Manufacturing) Company Limited, which trades as First Ireland Spirits, produces Irish cream liqueurs for some of the world’s largest retailers and drinks companies. In FY19, the company saw revenue increase by 6.9% to c. €18.3m while EBITDA saw an increase of 61.3% to c. €300k. The jump in EBITDA was due to cost of sales and distribution costs remaining relatively flat despite the increase in revenue. The company employed an average of 83 employees in FY19, up from 80 the previous year, at a cost of c. €3.0m. There was a net cash decrease during the year of c. €530k after working capital movements as well as a Capex spend of c. €200k. At the end of the year, there was a cash balance of c. €120k against a debt balance of c. €800k. Net assets decreased during the years by 19.1% to c. €1.3m. The company is part of the Quintessential Brands Group, which is an independent, international drinks company based in the UK.
Who: Trinity College Dublin’s Covid-19 Research Hub receives funding. A new unit in Trinity’s biomedical school carrying out the Trinity COVID-19 Immunology Project.
What: AIB has committed €2.4m to the hub which will involve immunologists and infectious disease clinicians from St James’s Hospital in Dublin.
Why: The research will focus on the design of new drugs and vaccines to combat the virus, the problem of supply and validation of commercial antibody testing kits as well as the development of rapid antibody testing to identify current and previous Covid-19 infection in healthcare works, and eventually the wider community.
Source: RTE
Source: Kernel Capital
Who: CircleCI, California-based integration and delivery platform, co-founded by Dubliner Paul Biggar. CircleCi automates the process of building, testing and deploying software so that teams are able to work faster
What: $100m (€92m) Series E funding round was led by IVP with Sapphire Ventures also participating.
Why: This new funding will help CircleCI continue its global growth while investing more in the product and customers.
Source: Indo Business
Source: Fincovi Press Release
Who: Irish independent commercial radio stations.
What: Up to €95,000 special funds per station has been made available in a €2.5m scheme by the Broadcasting Authority of Ireland.
Why: The funding is available to cover costs “directly related” to the aim of enhancing public awareness and understanding of the health emergency
Source: Irish Times
Who: Gaming technology company GAN, which is led by Dermot Smurfit Jr has plans to raise funding. GAN principally supplies gambling software to businesses such as casinos.
What: The business aims to list on the NASDAQ in the near future to raise in excess of $35m. The business is currently listed on London’s Alternative Investment Market (AIM)
Why: It is reported that the raise intends to create a broader investor base and improve trading liquidity while also securing capital to pursue growth initiatives.
Source: The Sunday Times
Who: SilverCloud Health, an Irish digital health platform, which focuses on therapy and wellness programmes, has secured funding.
What: €14.7m round was led by LA-based Memorial Care Innovation Fund, LRV Health, OSF Ventures and UnityPoint Health Ventures. Existing backers, Dublin-based Act Venture Capital, and B Capital, also participated.
Why: The new financing will be used to expand its programme portfolio, conduct additional research and clinical trials and further boost its presence in international markets.
Source: Irish Times
Who: The National Treasury Management Agency has raised debt.
What: The €6bn debt is to be repaid in seven years at a yield or interest rate of 0.24%.
Why: The funds will be used towards the State’s fight against Covid-19.
Source: Irish Examiner
Who: Irish-led bottle and can maker Ardagh is seeking to raise additional funds.
What: The company looks to raise an extra $200m (€183m) to add to the $500m (€458m) that it recently announced it intended raising from a bond sale.
Why: New York-listed Ardagh said in a statement that it intended using the cash to repay an existing line of credit.
Source: Irish Times
Who: Irish oil and gas explorer Providence Resources seeks to raise funds.
What: $3m (€2.7m) is to be raised through the issue of placing securities and subscription securities. The placing is being conducted through an accelerated bookbuild process, which is managed by Cenkos, Davy and Mirabaud, the company’s brokers.
Why: The funds raised will be mainly used to provide general working capital for the business to cover general administration, licencing and placing costs, until April next year.
Source: Independent
Who: Vela Games, a Dublin-based independent developer of games has raised funding. The business is working toward releasing its first title as a ‘multi-player online co-op’ which they claim will be an entirely new genre for online gaming.
What: $3.1m was raised as part of a seed investment round, led by London Venture Partners and Dermot Desmond’s vehicle IIU. This is a follow-on investment by IIU who were previously involved in fundraises of c. €3.4m back in July 2019 and c. €3.0m in January 2019.
Why: The funding will be put toward developing the company’s first title and bringing it to market.
Source: The Sunday Times
With regard to the economic effect of this human pandemic, many comparisons are being made to 2008.
Our position in 2008 was definitely more vulnerable and we were more effected than the rest of the world.
The NTMA raised €6bn during the week at 0.24% and the report below shows the business case for this as a country. It shows how far we have come as an economy since 2008/2009 and how we might be even less affected than many other countries this time around.
It is well worth a five minute read.
NTMA – Starting Point in Fighting the Crisis Presentation
Reminder: Renatus are conducting a short survey amongst its valued network to establish the effect of Covid-19.
We believe the wisdom of our newsletter readers and LinkedIn friends shared with each other may help us all navigate through these choppy waters and plan for the other side.
All responses are anonymous as per GDPR guidelines.
28.9
The Ulster Bank’s construction purchasing managers’ index (PMI) for March 2020, down from 50.6 in February, showing that the industry has declined significantly. @IrishTimesBiz
-34
The consumer confidence index in Northern Ireland for the last 2 weeks of March 2020, sharply declining from -9 in mid-March, according to GfK Covid-19 ‘flash report’. @BelTel
73%
The number of Irish employers looking at reducing employee hours in response to the Covid-19 crisis, according to a survey by Korn Ferry. @IrishTimesBiz
1.3% & 6%
The year-on-year decrease in the industrial production and turnover, respectively, for February 2020, according to @CSOIreland
27%
The year-on-year increase in the sales at Irish supermarkets for March 2020 bringing in €250m more vs March 2019, making it the biggest month of grocery sales ever recorded, according to a Kantar survey. @IndoBusiness
28.9%
The year-on-year drop in the number of new private cars licensed for March 2020 amounting to 10,239 cars, according to
@CSOIreland
0.7%
The year-on-year increase in the consumer price index for March 2020, with the most notable changes in Education (+4.1%) and Communications (-8.6%), according to @CSO_Ireland
16.5%
The COVID-19 adjusted unemployment rate for March 2020, according to @CSOIreland
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