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Renatus’ Weekly M&A Newsletter – 05/06/2022
June 5, 2022
Renatus’ Weekly M&A Newsletter – 19/06/2022
June 19, 2022
June 12, 2022

Zeus Packaging acquires Swanline Group and BoxMart, Welltel acquires Wren Data and eleven, Glen Dimplex sells Morphy Richards and much more in our latest weekly Renatus M&A newsletter.

Renatus Private Equity Dublin, Ireland

Renatus Weekly M&A & Company Performance Private Equity Newsletter 12/06/2022

Dear Reader,

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

THOUGHT OF THE WEEK

  • The “inevitable” recession being flagged by what feels like all market commentators has been playing on our minds. The expectation and worry around what people suggest is inevitable was addressed last week. This week we draw on an excellent article from Markham Heid: Most Things You Worry About Will Never Actually HappenThe extract that struck us most and is very relevant to all those worried about the “inevitable recession”…

    “If people didn’t worry, they wouldn’t be able to anticipate and prepare for life’s challenges. “For some people, though, worry gets to be overwhelming,” Leahy says. “People who worry a lot tend to become depressed; you can worry yourself into this negative outlook on life.” One could argue that recent world and domestic events more than justify anxiety and a negative outlook. But a new study in the journal Behavior Therapy finds that many of the worries that occupy an anxious mind never come to fruition.  For the study, researchers at Penn State University asked 29 people with generalized anxiety disorder (GAD) to write down everything they worried about for one month. The study participants also recorded the outcomes of their worries. The researchers found that 91% of people’s worries did not come true. For several of the people in the study, exactly none of the things they worried about actually happened. Even on those rare occasions when a person’s worry translated to reality, the outcome was often better than the person had feared, the study found. When presented with this evidence that their worries were largely unfounded, many of the people in the study experienced improvements in their anxiety symptoms.”

    We have no crystal ball here in Renatus. There is no doubt that it is a time for caution in business and investment, but like early in the pandemic and soon after the Global Financial crisis there will be lots of good investments to be made and good businesses will still grow.

M&A ACTIVITY

Zeus Packaging acquires Swanline Group and BoxMart

Deal Details: Zeus, the Irish-owned packaging solutions company, has acquired Swanline Group and BoxMart, both based in the UK, in a deal worth over €25m.

Zeus is an Irish-owned packaging solutions company, supplying the retail and food industries. As we learned through a recent Renatus podcast with founder and owner Brian O’Sullivan, Zeus has become a global packaging force with a forecasted annualised turnover of €400 million in 2022, and a staff of nearly 800 people in 26 countries.

Swanline Group is a trade-only supplier of paper-based materials, print and conversion services to the packaging and point-of-sale sectors. The business is owned by Richard Towers. It recorded revenues of £16.0m in FY21, which converted to an EBITDA of c. £2.0m.

BoxMart is a packaging supplier, based in the UK, focusing on UK-made gift, retail, and ecommerce packaging. The business lists Joanne Offord, Simon Kirby, Richard Towers and Nicholas Kirby as its main shareholders. It does not report turnover or EBITDA information.

Advisers:
Zeus:
Tax: Mark Bradley of Grant Thornton
Financial: Patrick Dillon and of Thomas Roche Grant Thornton
Legal: TLT LLP

Swanline Group & BoxMart:
None mentioned.

Renatus Comment: Zeus’ latest acquisitions are another step towards its ultimate goal of reaching €500m in revenue. Bolt-on acquisitions is a key arm of this growth strategy. The business has added €75m of revenues through acquisitions over the past nine months, with its most recent deal being the acquisition of Canadian agricultural supply business, Agri-Flex last month. The success of Zeus’ growth was recognised last year with its founder, Brian O’Sullivan, being named the EY Entrepreneur of the Year in 2021. Listen to our Renatus Podcast interview with Zeus founder Brian O’Sullivan here.

Source: Zeus Press Release

Welltel acquires Wren Data and eleven

Deal Details: Welltel, the enterprise communications company, has acquired Wren Data and eleven. As part of the deal, Welltel has rebranded to DigitalWell. The deal consideration has not been disclosed.

DigitalWell (formerly Welltel) is a market-leading provider of enterprise communications, consultancy and technology transformation services for global clients. The business is headquartered in Ireland with operations throughout Europe.

Wren Data, based in Limerick, specialises in the design, delivery and support of complete end-to-end, leading-edge, contact centre technology solutions. The business does not report turnover or EBITDA information. Wren Data was owned by the Trustees of Declan Kennedy (62.47%), Martin Gerard Browne (29.99%), Ciaran Gloster (7.49%) and Liam Kennedy (0.05%).

eleven is a specialised customer service consultancy business that works with Genesys contact centre solutions across different customer touchpoints to improve and enhance customer experiences. The business does not publish turnover or EBITDA information. eleven was owned by Tom Conachy (47.4%), David Tidwell (21.0%), Philip Harrison (15.8%) and Kim Robertson (15.8%).

Advisers:

DigitalWell:
M&A: Nicky Brennan, in-house, led the deals.
Legal: BHSM, led by Eimear Grealy.
Financial & Tax: PwC, led by Ronan Somers.

Wren Data:
Legal: Holmes Law, led by Stephen Walker Of Counsel.

Eleven
Deal advisory: KPMG
Legal: AMOSS

Renatus Comment: DigitalWell has been backed by UK Private Equity firm Livingbridge since December 2020, and together they have completed five acquisitions. The recent acquisitions of Wren Data and eleven consolidate DigitalWell’s market-leading position in the high-growth customer experience and secure collaboration space. These acquisitions also create a formidable partnership for DigitalWell with Genesys, reinforcing its standing as customer experience specialists in technologies that drive successful contact centre experiences and business outcomes.

Source: DigitalWell Press Release

Glen Dimplex sells Morphy Richards

Deal Details: Glen Dimplex, the Irish electrical company, has agreed to sell its Morphy Richards brand to Chinese company, Xinbao, which trades as Donlim. The deal is reportedly worth between €175m and €200m.

Glen Dimplex manufactures and distributes electrical heating solutions to a range of industries. It acquired the Morphy Richards brand in the 1980s, whose products include toasters, kettles and other home appliances. Glen Dimplex Europe Holdings Limited, controlled by the Naughton Naughton family, had FY20 revenues of €793m, which converted to an EBITDA of €14m. Turnover had a recent peak in 2018 at €1.4bn.

Donlim manufactures and sells kitchen electrical appliances along with other electrical products. The business manufactures Morphy Richards products in China. The business had FY21 revenues of €1.8bn, which converted to an EBITDA of €231m.

Advisers: None mentioned.

Renatus Comment: While the Renatus Newsletter typically focuses on businesses furthering their M&A growth strategy, Glen Dimplex’s sale of its Morphy Richards brand highlights the value creation that long-term focused acquisitions can deliver for businesses. Glen Dimplex is one of Ireland’s great private business success stories. Growing from nothing to breaking €1bn in revenues in one generation.

Morphy Richards’ UK subsidiary reported revenues of €65m in FY20, with global retail revenues estimated to be c. €350m. The estimated windfall of c. €175-€200m from the sale of a business that Glen Dimplex has held for over 30 years will provide the business with added firepower moving forward, with CEO Fergal Leamy outlining the business as having ‘significant ambitions’ in other parts of the business.

Source: Irish Times

Keyword Studios acquires Forgotten Empires

Deal Details: Keywords Studios has announced an agreement to acquire Forgotten Empires. The deal is reported to be worth c. €30.4 million ($32.5 million).

Keywords Studios plc is an Irish video game industry services company based in Leopardstown, Dublin. The business was founded in 1998 by Giorgio Guastalla and Teresa Luppino. The business reported FY21 revenue of c. €430.5m and is traded on the London stock exchange under KWS.

Forgotten Empires is a full-service game development studio headquartered in Ohio, USA. The business was founded in 2013 by current studio head, Ryan Shepherd. The business reportedly had FY21 revenues of c. $7.2m.

Advisers: None mentioned.

Renatus Comment: Keywords Studios has been one of the most active acquirers in the Irish market for some time now and this strategy has paid off, with the business’ turnover growing from less than €135m in FY17 to well over €400m as of December FY21. Before the business went public in May of 2020, Keywords followed a trend of bolting-on new competencies through acquisition and integration and this strategy appears to be continuing.

Source: Keyword Studios Press Release

Kenny Solicitors merges with Eversheds Sutherland

Deal Details: Dublin-based Kenny Solicitors will be joining the Dublin office of global law practice Eversheds Sutherland. The deal consideration was not disclosed.

Kenny Solicitors is a full-service law firm office, specialising in property, commercial agreements, and commercial litigation. The practice consists of Graham P. Kenny, Daire Murphy, Melissa Kenny, Cillian Hunter McGowan, Ray Kavanagh, Paula Power, Gavin Kenny, and Emma Clarke.

Headquartered in London, Eversheds Sutherland is a global multinational law practice created by a combination of law firms Eversheds LLP and Sutherland Asbill & Brennan LLP, in February 2017, and is one of the 50 largest law practices in the world. The firm employs over 4,000 staff and reported FY21 revenue of over £918m.

Advisers: None mentioned.

Renatus Comment: This deal continues the theme we have been seeing play out of consolidation across the professional services space. We expect to see more deals like this in the accountancy and legal sectors.

Source: Law Society of Ireland

COMPANY PERFORMANCE

Kelletts (Oldcastle) Limited, t/a Respa Beds, manufactures beds and related products for wholesale distribution. The business is based in Co. Meath and owned by the Kellett family.​​​

In its financial year to December 2021, Respa had turnover of €19.9m, a 7.3% rise year-on-year. This converted to an EBITDA of €1.9m, a 12.3% year-on-year decline. The decline in EBITDA can largely be explained by a slight deterioration in gross margins.

Respa finished the year with a cash balance of €140k, down c. €1.7m year-on-year, with the business investing heavily in its working capital. It also acquired fixed assets for c. €1.1m. The business employed an average of 181 people over the year at an annual cost of €6.6m.

Based in Craigavon, County Armagh, Silverwood Enterprises Limited is involved in the treatment and coating of metals. The business operates from a facility next to Silverwood Business Park in Craigavon.

Silverwood reported an FY21 revenue figure of c. £10.2m which was a c. 24% increase from the previous year. This converted to an EBITDA of c. £1.2m, a c. 79% increase from the previous year. The EBITDA growth is linked to overhead costs remaining flat at c. £3.0m despite the 24% growth in revenue

Significant post-EBITDA cash movements  included a c. £1.7m investment into working capital, capital repayments amounting to c. £196k, and interest received of c. £65k. The business closed FY21 with a net cash balance of c. £6.7m, a year-on-year increase of c. £2.8m.

The business employed an average of 63 employees throughout FY21 at a cost of c. £3.6m. Silverwood is owned entirely by Peter and Alastair Maginnis.

RECENT FUNDRAISINGS

Who: Webio, a customer engagement solution which uses conversational artificial intelligence (“AI”) to understand customer intent, blend chatbot / live agent conversations in messaging channels. The business was founded in 2016 by Paul Sweeney, Cormac O’Neill and Mark Oppermann.

What: London-based VC fund Finch Capital has invested €2m into the business. This follows a €0.5m investment by Finch last year when it participated in Webio’s €1.5m pre-Series A funding round. It is reported that Webio has raised a total of €6m to date.

Why: Not specifically reported, but likely to be used to continue to fund growth.

Source: Sunday Times.

Who: SeamlessCare, a digital health start up which specialises in innovative assistive technologies for the care of people with complex needs. The business, founded by Dr Aviva Cohen, Dr Cagri Cubuku and Ian Kennedy, is a spin out of UCD.

What: SeamlessCare has raised a €700,000 seed round. Enterprise Ireland and Dr Frank Dolphin, former Chairman of the HSE, participated in the funding round.

Why: The investment will be used to accelerate the roll out of its products.

Source: Business Post.

Who: Frequency, an Irish software as a service company which has developed a platform to digitise communications systems used by airlines. It was founded by three former Aer Lingus pilots Darach O’Comhraí, Justin Perry and Kris Vansteekiste.

What: The business has raised a €600,000 seed round led by Irish VC firm Zoosh Ventures and the European Space Agency. The funding was raised last yet but has been reported in today’s paper.

Why: Not specifically reported, but likely to be used to continue to fund growth.

Source: Business Post.

Who: Chatsight, an Irish founded start up that has developed safety tools to protect Web3 communities against online scams, bots and toxicity. The business, now headquartered in London, was founded by Marcus Naughton.

What: Chatsight has raised $600,000 in a pre-seed round at a valuation of $6m. Investors include: Hustle Fund, Quant Stamp, Entrepreneur First, Launch House, Id4 Ventures and Silicon Valley executive Tina Bhantnagar.

Why: The pre-seed round is to fund offices, founder salaries and supporting product growth.

Source: Business Post. 

Who: Swoop, an online platform designed to simplify access to loans, grants and equity funding for SMEs. The business was founded inn 2018 by Andrea Reynolds, daughter of former Taoiseach Albert Reynolds, and Ciaran Burke.

What: Swoop has raised close to €10m in a Series A funding round at a valuation of €30m. €3m was raised from RBS in the UK, and €6.3m was raised from Arab Bank Ventures, US fund WeHo Ventures, VC fund Velocity and the firm’s seed investors, as well as Italian angel fund IAG.

Why: It is reported that the business plans to scale into the US, Canada and Australia.

Source: Sunday Independent.

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.


Daire Fitzgerald

Source:
(Google Images & 
LinkedIn)


Ciaran McLaughlin

Source:
(Google Images & LinkedIn)


Kieran Rossiter

Source:
(Google Images & LinkedIn)


Niall Collins

Source:
(Google Images & LinkedIn)

@RenatusCapital Tweets

21%

The year-on-year increase in the total number of planning permissions granted for homes in Ireland during Q1 2022, accounting for 8,463 new homes. According to @CSOIreland

4.5 million

The amount of cheque payments that were made in Ireland in Q1 of 2022, a new quarterly low. This figure was nearly 9 million in 2018. according to
@BPFINews

21%

The proportion of all new cars licensed for the first time in Ireland during the first five months of 2022 that were electric or plug-in hybrid electric vehicles (PHEV). @CSOIreland

4.7%

The seasonally adjusted Irish unemployment rate for May 2022, down from 4.9% in April 2022, and down from 7.0% in May 2021. According to @CSOIreland

19%

The percentage of income Irish households saved in Q1 2022. According to @CSOIreland

7.8%

The annual rate of inflation in Ireland as of May 2022. This is the highest rate in 38 years, and up from 7% in April. 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.
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    Adrian Stackpoole, Digital Marketing Associate

    • Adrian joined Renatus in 2018, initially as a Marketing Executive before moving into the role of Digital Marketing Associate. As part of his role, Adrian manages all the digital marketing aspects of Renatus as well as conducting digital research for portfolio companies.
    • Adrian holds with a BBS degree in Marketing and Entrepreneurship from the University of Limerick, as well as a Postgraduate degree from The Digital Marketing Institute.
    • Prior to joining Renatus, Adrian worked in New York with a start-up hospitality group, specalising in marketing and operations.
    TIERNAN O’HAGAN

    Tiernan O’Hagan, Associate

    • Tiernan recently joined Renatus Capital Partners as a Private Equity Associate. As part of his role, he researches and analyses the potential of new investments and acquisitions
    • Tiernan graduated with a B.Sc in business and law from DIT Aungier street & an MSc. in Entrepreneurship from Trinity College Dublin.
    • Previously worked with Capnua Corporate Finance for three months during a summer internship.
    • Tiernan is also in the process of sitting ACCA exams.
    Bronagh Kearns Renatus

    Bronagh Kearns, Associate

      • Bronagh recently joined Renatus as a Private Equity Associate. As part of her role, she will be researching and executing investment opportunities.
      • Bronagh holds a MSc in Quantitative Finance from UCD Michael Smurfit Business School and a BSc in Finance from University College Cork. Currently, Bronagh is in the process of obtaining the ACCA qualification.
      • Prior to joining Renatus, Bronagh worked as an Investment Banking Analyst in Rubicon Capital Advisors where she worked on M&A transactions on the execution side and financial modelling in the infrastructure sector. She also worked as an Investment Associate in River and Mercantile Solutions in London quantitatively screening different investment opportunities across all asset classes.
    Alan Manning Renatus

    Alan Manning, Associate

    • Alan joined Renatus Capital Partners in September 2021 as a Private Equity Associate. As part of his role, Alan researches and analyses potential investments and acquisitions.
    • Alan holds a B.Sc Finance from University College Cork.
    • Previously working in KPMG’s Consulting division, with the Financial Management Consulting team. During his time there he was engaged on a Finance Function Review for a European Travel Technology firm, and a review of the cash management strategy of an Irish Commercial Bank.
    • In the process of sitting ACCA exams.

    Conor Hall, Associate

    • Conor joined Renatus Capital Partners in June 2018 as a Private Equity Associate. As part of his role, Conor researches and analyses potential investments and acquisitions.
    • Conor holds an M.Sc. in Quantitative Finance from UCD Michael Smurfit Graduate Business School and a B.Sc. in Economics & Finance from UCD. He is currently working towards attaining the ACCA and CFA qualifications.
    • Prior to joining Renatus, Conor worked as an Analytics Analyst with Accenture, specialising in predictive modelling for fraud.

    Kyle Barry, Associate

    • Kyle joined Renatus Capital Partners in June 2016 as a Private Equity Associate. As part of Kyle’s role, he researches and analyses the potential of new investments and acquisitions.
    • Since joining, Kyle has worked on numerous transactions, including Simtech and Rennicks, and has worked with Renatus’ investee companies on a number of strategic projects.
    • Kyle holds an MSc. in Quantitative Finance (University College Dublin) and a BA Finance (Maynooth University). Currently, Kyle is in the process of completing the ACCA qualification.
    • Prior to joining Renatus, Kyle spent 15 months in Intel’s Finance department where he worked across the financial reporting, tax and capital financing teams.

    Philip Gardiner, Associate Director

    • Philip is an Associate Director with Renatus Capital Partners, having first joined the firm as its first employee in 2014.
    • Philip has responsibility for screening, assessment and structuring of new acquisitions.
    • He has worked on a number of transactions at Renatus including Boojum Mexican Restaurants and Simtech Aviation. Philip works actively with the boards of Boojum and Simtech Aviation.
    • Prior to joining Renatus, Philip spent four years in AIB’s corporate banking team where he worked on a mix of real estate and cash flow lending deals.
    • Philip is a member of the ACCA and holds an MSc. in Financial Services and a Bachelor in Business Studies, both from the University of Limerick.

    Jane Martin, Marketing and Administration Manager

    • Jane joined Renatus Capital Partners in June 2019 as a Marketing and Administration Manager. As part of Jane’s role, she writes the weekly newsletter, works on the CRM and looks after the admin and ad hoc tasks
    • Prior to joining Renatus, Jane worked as a Senior Account Manager in Mace Promotions where she worked closely with many SMEs as well as large corporations on their marketing projects

    Mark Flood, Director

    • Mark co-founded Renatus with Brendan Traynor in 2014. Prior to establishing Renatus, Mark spent seven years on the senior management team of the Racing Post in various operational and commercial roles. Before founding Renatus, Mark was Managing Director of the Racing Post’s Irish operation.
    • Prior to his career in the Racing Post, Mark was the first employee of FL Partners, an Irish based international private equity firm, where he was actively involved in over €300m worth of transactions.
    • Mark combines his financial, operational and commercial experience to bring value and energy to all partner companies.
    • Mark is a Chartered Accountant and holds a Bachelor of Commerce and Masters in Accounting from NUI Galway.

    Brendan Traynor, Director

    • Brendan is a co-founder of Renatus. Prior to establishing Renatus, he was a Director in BDO Corporate Finance specialising in M&A, MBO’s/MBI’s, debt and private equity fundraising across a diverse range of sectors and clients.
    • His career focus and passion is the Irish SME sector and his deal expertise covers sectors such as retail, manufacturing, FMCG, healthcare, avaiation, media, medical devices, food and agriculture, construction, and hotels and leisure.
    • Brendan is a Chartered Accountant and holds a Bachelor of Commerce from University College Dublin

    Conor Mehigan, Associate Director

    • Conor joined Renatus Capital Partners in 2021 as an Associate Director. Conor has responsibility for screening, assessment and structuring of new investments and acquisitions.
    • 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. Prior to his career in IBI Corporate Finance, Conor spent four years in Deloitte’s Corporate Finance Division, specialising in Transaction Services
    • Conor is a Chartered Accountant and holds a BSc in Finance from University College Cork

    Greg Dilger, Strategic Advisor

    • Greg Dilger is a former Executive Director of NCB Stockbrokers and Investec Wealth & Investment.
    • He is an investor and advisor to Renatus and brings years of relevant experience to our team.
    • Greg is also currently a Non-Executive Director of Brewin Dolphin Ireland.

    Joan McGrath, HR Advisor

    • Joan has supported Renatus since 2019 on HR matters. Supporting recruitment, onboarding and people development at Renatus as well as partnering with the team on key transactions providing HR Due Diligence and strategic HR advice.
    • Joan was previously the Head of Human Resources at Davy and was a Board Director there for many years and played a key role in numerous acquisitions. During her career, she has worked in a range of industries from microelectronics manufacturing to builders merchants ensuring the people strategy is a core part of business strategy.
    • Joan has a Bachelor of Commerce degree, a Masters in Business Studies and a Diploma in Occupational Health and Safety from UCD. She is a Fellow of the Chartered Institute of Personnel and Development and has a Certificate in Governance.

    John Dwyer, Chairman

    • John joined Renatus in 2018 as a Chairman. Prior to Renatus, John spent 30 years at PwC in the UK, 20 years as a Partner, John led the UK and Global Deals business at PwC and was an executive board member of the UK firm.
    • Prior to that, John led the UK and Global Private Equity business at PwC and worked with firms including 3i Group, Apax Partners, CVC Capital Partners and Cinven.
    • John is married to Natasha and they have three children. John works between Dublin and London and his charity work includes chairmanship of Irish Youth Foundation UK.
    • He is an advisor and Board member of Irish digital marketing firm Pigsback and media firm Racing Post.
    • John is a Chartered Accountant and holds a Bachelor of Commerce from UCD.