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Renatus’ Weekly M&A Newsletter – 05/09/2021
September 6, 2021
Renatus’ Weekly M&A Newsletter – 19/09/2021
September 19, 2021
September 12, 2021

Renatus welcomes new team members, E+I Engineering Group to be acquired by Vertiv, IMMAC acquires two Irish nursing homes, Circle K acquires 10 Londis stores, and much more in this week's Renatus Private Equity weekly M&A newsletter.

Renatus Private Equity Dublin, Ireland

Renatus Weekly M&A & Company Performance Private Equity Newsletter 12/09/2021

Dear Reader,

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

WELCOME NEW TEAM MEMBERS

We would like to welcome Alan Manning and Tiernan O’Hagan to the Renatus team who started their graduate programme this week. Renatus is built on a hardworking team, with a love for business and SMEs. Alan and Tiernan embody these values and we are privileged that they chose Renatus to launch their careers. We look forward to their contribution in helping to drive Renatus forward over the coming years.

M&A ACTIVITY

E+I to be acquired by Vertiv

Deal Details: E+I Engineering group is to be acquired by US integration giant Vertiv in a deal reportedly valued at €1.7bn. The deal, which is subject to customary closing conditions, is expected to close in Q4.

E+I, founded in 1986 by Philip O’Doherty and based in Co Donegal, is a global provider of electrical switchgear and power distribution solutions. The company employs c. 2,100 people across its facilities in Ireland, USA and United Arab Emirates.

The key shareholders of the business were Philip O’Doherty, and the key senior management Damian McCauley, Cathal McLaughlin, Paul Connolly, and Adrian Sheridan.

NYSE-listed Vertiv is a provider of equipment and services for data centres, with a portfolio of power, cooling and IT infrastructure solutions and services that extends from the cloud to the edge of the network. Its 21,000 employees serve customers in more than 130 countries.

Advisers: None mentioned

Renatus Comment: Philip O’Doherty really took on global brands like ABB, Siemens, Schnieder and others in this space and this eighteen minute video from the 2013 MacGill Summer School gives a great insight into O’Doherty. In its Dec 19 financial statements, E+I reported group revenue of c. €382m and EBITDA of c. €80m. However, it looks like the business has kicked off significantly since then and is on a strong growth trajectory. The agreed deal sees E+I shareholders receive c. €1.52bn upfront (€990m cash + €533m stock in Vertiv), with an earnout of up to an additional €169m if Dec 22 EBITDA is in excess of €132m. While not a tech start up, this is another Irish “Unicorn” and is a fantastic exit for the shareholders. Market’s did not share our enthusiasm – Vertiv’s stock is trading down c. 14% since the announcement.

Source: E+I Engineering press release

IMMAC acquires two Irish nursing homes

Deal Details: Healthcare investor IMMAC Group has acquired Beechwood Nursing Home in Carlow and Woodlands House Nursing Home in Navan, Co Meath for an undisclosed amount.

Both Beechwood and Woodlands House are private nursing homes with strong reputations for providing high quality care in a homely setting designed to promote health and well-being for its residents.

These latest acquisitions increase IMMAC’s investment portfolio in Ireland to seven nursing homes.

IMMAC, founded in 1997, is one of Europe’s leading companies for real estate investments in the healthcare sector. To date IMMAC group has invested c. €1.7bn in more than 160 social real estate assets.

Advisers:
Advisors to IMMAC Ireland on this transaction were:

Beechwood
Baker Tilly – Financial
Simmons & Simmons – Legal

Woodlands House
Brenson Lawlor – Financial
McCann Fitzgerald – Legal

Renatus Comment: IMMAC has been a regular in our newsletter since it first entered the Irish nursing home market in 2017, when they acquired Beechfield Care Group. The nursing home sector has been undergoing significant consolidation and capacity expansion in recent years, driven by our growing population, aging demographics and shortage of beds. Along with insurance companies, veterinary surgeons and other sectors, nursing homes really have been revalued and are commanding much higher multiples than historically, driven by macro factors pushing up global demand for the end offering.

Source: IMMAC Press Release

Circle K acquires 10 Londis stores

Deal Details: Filling station group Circle K is acquiring 10 convenience stores, currently operating under the Londis banner, all located in Dublin. The deal includes a number of in-store food franchises for Subway and Chopped. The financial details of the transaction, which is subject to regulatory approval, were not disclosed.

The Griffin Retail Group was established in 1997 by Seamus Griffin when he opened his first store in O’Connell street. It has since grown to 15 convenience retail stores nationwide.

Circle K, currently owned by Canada’s Couche-Tard, currently has about 420 garage forecourts in Ireland. It has reportedly invested more than €150m in the Irish market since it took over the Topaz network in 2016, previously owned by Denis O’Brien.

Advisers:
Griffin Retail Group was advised by:
Corporate Finance: John Higgins and Peter Neville (EY)
Commercial Legals: Adrian Burke & Associates
Property Legals: Aideen Hennessey (HOS Partners)
Tax: John Kennelly (EY) and Brenson Lawlor
Financial Advisory: BLG Advisory

Renatus Comment: This is an interesting move by Circle K’s Irish unit, to move out of the petrol station business to the high street. Although, in reality petrol stations are now much more convenience stores that sell fuel than the other way around. In its last set of accounts as a public company, Applegreen’s Ireland business generated 2.1x more gross profit from non-fuel sales vs fuel sales. Circle K certainly has the experience to make a success of this move and challenge the dominance of Centra and Spar. Circle K’s owner, Couche Tard is the largest convenience store operator in North America with 10,000 outlets, in the US it is second only to 7 Eleven.

Source: Checkout.ie

Business Post acquires Red C

Deal Details: The Business Post Group has acquired polling and research consultancy Red C Research in a deal reportedly worth €7m.

Red C, founded in 2003, has counted The Business Post as a long-term client having been conducting political polls on the newspapers behalf. Following the transaction it will remain an independent entity within the group.

Business Post group, led by Enda O’Coineen, includes the Business Post news title and its conference business iQuest & Business Post Live.

The acquisition was funded by the group’s existing capital providers: a shareholder group led by Mr O’Coineen, who is the majority owner, and Beachpoint Capital Partners.

Advisers: Venturewave and a FOD Solicitors team led by David Ryan, Elaine Cully, Ciara Finnan, Cian Mannion and Aoife Brannigan were lead advisers for the Business Post.

LK Shields Solicitors led by Jennifer McGuire (Partner, Corporate/M&A) with assistance from James Byrne and Gillian Dully provided legal advice to Red C.

Renatus Comment: Under the leadership of Enda O’Coineen, the Business Post Group is expanding its vision beyond newspapers and building the business to be a much wider “content” provider, from data through Red C or events through iQuest, or the core Business Post newspaper.

Source: Irish Times

Macquarie’s Green Investment Group (GIG) acquires offshore wind farm

Deal Details: Macquarie’s Green Investment Group (GIG) has acquired Fuinneamh Sceirde Teoranta, the developer of the Sceirde Rocks offshore wind farm, in Galway, Ireland. Sceirde Rocks is a proposed 400 MW offshore wind farm, capable of generating enough energy to power the equivalent of up to 295,000 homes.

Fuinneamh Sceirde Teoranta was owned by a collective of shareholders with Bartley Lee, Padraig Lee and Seosamh O’Laoi being the major shareholders.

Advisers: GIG was advised by EY. Financial DD was provided by James McCarthy, Maeve Fleming, and Kelvin Cummins, while Tax DD was provided by Dave Barry and Niall O Lideadha.

Renatus Comment: The opportunity in the off shore wind market is clear – Ireland has an objective of achieving 70% renewable energy by 2030 and to achieve this, over 5 GW of offshore wind energy is expected to be developed by the end of the decade. Expect to see a lot more transaction activity in this space.

Source: GIG press release

Grant Thornton acquires Signature Financial Planning

Deal Details: Grant Thornton Ireland has announced the acquisition addition of Signature Financial Planning to its Private Client Business service.

Signature Financial Planning Ltd (incorporating Heritage Financial Services Ltd) by industry veteran Brendan Reade. It provides investment and retirement planning financial advice to many professionals, business owners and retirees since its formation in 2009.

Advisers: GIG was advised by EY. Financial DD was provided by James McCarthy, Maeve Fleming, and Kelvin Cummins, while Tax DD was provided by Dave Barry and Niall O Lideadha.

Renatus Comment: The opportunity in the off shore wind market is clear – Ireland has an objective of achieving 70% renewable energy by 2030 and to achieve this, over 5 GW of offshore wind energy is expected to be developed by the end of the decade. Expect to see a lot more transaction activity in this space.

Source: GIG press release

COMPANY PERFORMANCE

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.

Laois-based Jamestown Manufacturing Ltd.’s principal activity is the provision of steel processing services.

In its financial year to February 2020, the business reported revenue of c. €19.0m (an increase of 31.7% YoY) which converted to EBITDA of c. €1.3m (an increase of 13.2% YoY). Distribution costs increased by c. €209k and administrative expenses by c. €594k YoY which prevented the strong revenue growth from fully flowing through to EBITDA growth.

The business ended the year with a cash balance of c. €2.4m, with an advance of c. €1.1m to a subsidiary being the most significant post-EBITDA use of cash.

Jamestown Manufacturing Limited is wholly owned by Maurice Sterling. The business employed an average of 97 people during the year at a total cost of c. €4.0m.

RECENT FUNDRAISINGS

Who: The Naked Collective Limited, an Irish start-up established to produce functional drinks for the health and wellness market under the brands “Mude”, “So.Beer” and “Trainr”.  The business is led by co-founders, Niall Phelan (CEO) and Catherina Butler (CFO).

What: The company has raised approximately €6.2m from investors, including BVP Investments. The funds raised were reportedly €1m more than initially targeted. The company raised €6m in a previous round in 2020.

Advisors: DLA Piper Ireland LLP is the legal advisor to The Naked Collective Limited.

Why: The money is to be used to support the company’s global sales and marketing expansion plans, particularly in the US.

Source: RTÉ

Who: Tech consultancy Trilateral Research Ltd has secured funding.

What: €1.23m funding was awarded from the EU’s Green Deal Work Programme and the Internal Security Fund.

Why:  The funding will be used for research in climate change, cyber-security and combatting misinformation.

Source: Irish Examiner

Who: Kindora, a platform for premium childrens’ goods founded in 2020 by Sarah Ouellette, raised funding and secured a spot in Techstars London.

What: €500,000 round was led by Heather Morris, who was previously chief strategy officer with student learning platform Chegg and is an advisor to BabyQuip, a US company that offers a similar service to Kindora’s. Other backers include Georgie Smallwood, chief product officer of Tier Mobility, and entrepreneur Desmond Green.

Why: The funding will be used for expansion and product enhancement. The company is also hoping to open a retail premise this year in Dublin.

Source: Irish Times

Who: Irish life sciences venture capital group Fountain Healthcare Partners has invested in Dutch biotech Calypso Biotech.

What: The Irish company participated in the €8m extension to the Series A round along with Gilde Healthcare, Inkef Capital, Johnson & Johnson Innovation and M Ventures bringing the total raised to €28m.

Why: The funding will be used will be used to speed up the development of its monoclonal antibody treatment for auto-immune diseases including coeliac disease, eosinophilic oesophagitis and dermatology.

Source: Irish Times

Who: Chapel Gate Irish Whiskey, a whiskey bonding business founded in 2015 by former Diageo exec Louise McGuane. The company sources whiskey from Irish distilleries and matures it in a purpose build bonded rackhouse.

What: The business has raised €1.3m in from American private investors.

Why: The funding will be used to purchase more whiskey and establish US operations.

Source: SundayTimes

EXECUTIVE AND BOARD APPOINTMENTS

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.


Niall Flood

Source:
(Google Images & LinkedIn)


David Walsh

Source:
(Google Images & LinkedIn)


David Hickey

Source:
(Google Images & LinkedIn)


Daniel O’Connor

Source:
(Google Images & LinkedIn)


Conor Daly

Source:
(Google Images & LinkedIn)


Keith Doyle

Source:
(Google Images & LinkedIn)

THOUGHT OF THE WEEK

Anyone curious about how to grow a unicorn from Ireland in a traditional industry should listen to this interview.

Since this interview in 2013, Philip O’Doherty’s business has grown 4/5x, and this interview gives a great view inside the mind when the business was a golden platform, but not the unicorn it is today.

The lessons we learnt from the video include:

  • any aspiring entrepreneurs should get a good chapter or two of professional work under their belt and then give a start up a go – he credited the roots he got working for ESB and subsequently DuPont.
  • the business is 99 per cent Derry and Donegal people, and the brains are in Donegal HQ,
  • 95/100m turnover at the time, 99% outside the island, proving great businesses can be built in Ireland,
  • R&D investment crucial – crucial that sales and R&D and 100% aligned,
  • he reinvested almost everything up to that point and he prioritised the business over lifestyle,
  • when expanding abroad you the leader, or one of every senior team must go – don’t fool yourself thinking you can grow without feet on the ground, and
  • multinationals spawn great talent and entrepreneurs – he said this is a benefit never fully credited to the multinationals here in Ireland.

@RenatusCapital Tweets

19%

The biennial decrease in the Belfast shopper footfall for August 2021 vs pre-pandemic 2019, according to the research by the Northern Ireland Retail Consortium and Sensormatic IQ. @BelTel

€10bn

The Irish households savings for Q1 2021, more than 4x the amount usually saved in the first quarter of the year, according to @CSOIreland

14%

The year-on-year increase in the value of the Irish monthly services index for July 2021. The most notable changes were in the Information and Communication (+20.1%) sector, according to @CSOIreland

26% & 34%

The year-on-year increase in the Irish construction production volume & value indices, respectively, for Q2 2021.​ @CSOIreland

23.3%

The year-on-year increase in new private car registrations in Ireland for January to August 2021 amounting to 88,618 new cars, according to​ @CSOIreland

2.8%

The year-on-year increase in the Irish consumer price index for August 2021. The most notable changes were in Transport (+10.2%) and Clothing & Footwear (-5.6%) sectors, 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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Renatus Capital makes strategic investment in Tipperary Crystal

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Our Knowledge Centre is filled with insights from some of Ireland’s top business leaders on Succession Planning, Management Buyouts / Buy-Ins, Growth Financing and much more.

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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.
    Patrick Dooley Renatus

    Patrick Dooley, Associate Director

    • Patrick joined Renatus in November 2022 as an Associate Director. Patrick has responsibility for screening, assessment and structuring of new investments and acquisitions.
    • Patrick previously held leading positions in Focus Capital Partners, PKF O’​Connor, Leddy & Holmes & EY.
    • Patrick is a charted accountant and holds a Bachelor of Accounting and Finance degree from DCU, along with a Masters degree in Accounting from TUD.

    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.