Renatus’ Weekly M&A Newsletter – 05/12/2021
December 5, 2021Renatus’ Weekly M&A Newsletter – 19/12/2021
December 19, 2021
Renatus Weekly M&A & Company Performance Private Equity Newsletter 12/12/2021
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
RENATUS CHRISTMAS GIFT GUIDE
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Boojum merchandise
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Tipperary Crystal
Take a look at Tipperary Crystal’s wonderful selection of Christmas gifts and decorations here
M&A ACTIVITY
360 acquired by US group
Deal Details: 360, a prominent integrated communications consultancy firm, has been acquired by US communications group Finn Partners. The value of the deal was not disclosed.
360 was founded in 2011 by former government advisor Dan Pender, who owned a 93% stake in the company. Gavin McGuire owned 5.5% of the shareholding. Pender will remain as managing partner of the Irish division post-acquisition.
The company helps clients build communication cultures and strategies using expert insights and hard data. It has a 17 person team.
Finn Partners is a globally integrated marketing communications company based in New York. It focuses on health, pharmaceuticals, and travel communications. The business was founded by Peter Finn in 2011. The company has annual revenues of over $170m.
Advisors:
Gavin McGuire has been helping the 360 team be transaction ready for a few years like he has done with other companies, and he coordinated all the vendors’ advisers including Yvonne Hollywood (Finance), and Kieran Regan and Lís O’Connor (Regan Wall business law firm).
FINN Partners was represented by Reddy Charlton Solicitors.
Renatus Comment: We are increasingly seeing professional services firms monetise the goodwill built up. This deal is the latest in a spree of acquisitions by Finn Partners, who appear to have a clear M&A strategy in 2021. In 2021 alone, the company has made 5 acquisitions.
Source: Irish Times
Principal Logistics Technologies acquires UK business
Deal Details: Principal Logistics Technologies Ltd. has acquired the entire share capital and intellectual property rights of Manchester based Chess Logistics Technology Ltd.
Warehouse and Supply Chain management software specialist Principal Logistics Technologies Ltd. (Principal Systems), founded in 1990, delivers warehouse management software (WMS), enterprise resource planning software (ERP & SOP), and associated technology to 3PL logistics, supply chain, and distribution warehouse businesses.
Chess Logistics Technology Ltd. is an ISO:9001 accredited company with over 32 years’ experience in developing and deploying warehouse and logistics software.
The acquisition includes Chess Logistics Technology’s in-house developed Empirica and Socretes WMS warehouse management systems along with ProSKU, a cloud-based WMS, and order management system.
Advisors:
Principal Advisors: Clarkslegal, led by Jon Chapman, and Dillon Eustace LLP, led by Conor Keaveny, provided legal advice to Principal Logistics Technologies. PWC, led by Brian Bergin, provided financial and tax advice.
Vendor Advisors: KPMG, led by Nisha Sharma, provided M&A advice, and CG Professional, led by Benjamin Dredge, provided legal advice for the sellers. Brendan Fitzpatrick of James Scott Chartered Accountants also assisted on the financials.
Renatus Comment: The deal is Principal Logistics Technologies’ second acquisition within 12 months, following the acquisition of Brentech Data Systems Limited, an Irish firm offering distribution and ERP software, in January 2021. In February 2021, Harwood Private Capital and Firmament Ventures LLC acquired minority stakes in the company, which was founded by managing director, Peter Flanagan.
Source: Principal Technologies Press Release via pressat.co.uk
Heineken to acquire sole control of Comans Beverages Limited
Deal Details: Heineken is to acquire the remaining 75% of Comans Beverages Limited, of which it already owns 25%. The deal is subject to approval by the Competition and Consumer Protection Commission.
Heineken is an international drinks company focused on beer and cider. The Heineken Group had 2020 revenues of €23bn, which converted to an EBITDA of €3.6bn.
Comans Beverages, based in Dublin, is primarily active in the wholesale distribution of alcoholic and non-alcoholic beverages. It distributes brands such as Dutch Gold, Prazsky, Druid’s cider, and Karpackie. The company had revenues to December 2019 of €108m, which converted to an EBITDA of €712k.
Advisers: None mentioned
Renatus Comment:The deal sees the completion of a phased purchase of Comans, following a 2016 joint venture between them and Heineken. The original joint venture saw Heineken merge Comans Wholesale with one of its existing distribution units, with the aim of amalgamating Heineken’s draught keg distribution into a single unit. The deal sees Heineken acquire Comans at a difficult time in the industry, with Comans stating that they expect to make a loss for FY20 due to the impact of Covid-19. The deal should help provide support for Comans as they become part of the wider Heineken group.
Source: CCPC; thejournal.ie
DEALS UPDATES & OTHER NEWS
Bank Of Ireland’s takeover of Davy Wealth Management is cleared
Deal Details: Bank of Ireland acquisition of Davy’s wealth management, capital markets, and associated businesses, announced in July, has been cleared by the CCPC. The deal values the stockbroker at €440m.
Bank of Ireland will acquire sole control of Davy’s capital market and wealth management businesses, which are part of Amber Note unlimited Company, the parent company of Davy’s. The deal comes at a time when Bank of Ireland is also in the process of purchasing the mortgage business of KBC Bank Ireland.
Advisors: Alongside Rothschild, a Davy corporate finance team of John Lydon, Peter Bennet, Michael Hussey, and Richard Dennehy advised on the complex hat trick of deals with Bank of Ireland, IQ-EQ, and AssetCo.
An IBI Corporate Finance team of Tom Godfrey, Laurence O’Shaughnessy, and Alex Penny advised Bank of Ireland.
Source: CCPC
HealthBeacon to list next Wednesday
Deal Details: Following the recent news of the Irish medtech company’s IPO, HealthBeacon has reportedly announced it plans to start its listing on Euronext Growth Market, a market operated by Euronext Dublin, next Wednesday.
4,273,504 new ordinary shares are to be issued at €5.85 per ordinary share. The company aims to achieve gross proceeds of €25m. The proceeds from the placing will be used to scale its team to support growth across sales and marketing, customer support and operations, finance and product development.
Source: Independent
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
Gem Plastics Limited is a Cavan-based provider of blow-moulded products. Its specialised plastic packaging is used in the pharmaceutical, food, agricultural and chemical industries.
In the financial year to December 2020, Gem Plastics Limited generated a turnover of c. €20.9m, a slight decline YoY. Despite this, the company converted this turnover to an EBITDA of c. €2.9m, an increase of 4.8% year-on-year. This increase can be partly explained by an improved gross margin, up to 31% from 27.4% in the previous year.
The business finished the year with a cash balance of c. €1.8m, an increase of 450% year-on-year. The business employed an average of 100 people at an annual cost of €3.6m during the year.
In November 2021, Gem Plastics was acquired by Schutz, a manufacturer of transport packaging headquartered in Germany.
Michael Moore Car Sales Limited is an Irish car dealership. The business was founded in 1972 by Michael Moore Snr and now operates from dealerships in Athlone, Westmeath, Offaly, and Laois. The business offers vehicles from its partner brands which include Mercedes-Benz, Volkswagen, Audi, and Skoda.
Michael Moore Car Sales experienced a small drop in revenue of c.1.6% to c. €84.5m in FY 2020. Despite the decrease, the business experienced a 55% growth in EBITDA which amounted to c. €4m. This increase was due to gross margins increasing from 5% to 6.5%, and administrative expenses reducing by €300k. Significant post EBITDA cash flow movements included a negative working capital balance of c. €2.2m, negative debt repayments of c. €472k, purchases of fixed assets amounting to c. €304k, and tax paid of c. €327k.
The business experienced a positive cash flow movement of c. €826k in FY 2020 and closed the year with a net cash and cash equivalents balance of c. €4.4m.
The business employed an average of 100 people throughout 2020 at a cost of c. €4.1m. The business is family-run and wholly owned by the Moore family.
RECENT FUNDRAISINGS
Who: nSurely, an Irish insuretech platform founded in 2021 by Aravind Ravi, Niall Crowley, and Dan Foley. It uses telematics to gather data so that insurers can calculate driver risk in real-time.
What: €535K was raised in an oversubscribed funding round which attracted support from leading insurance and IoT industry veterans in Ireland, the United States, and the Caribbean. Former Linked Finance CEO Niall Dorrian is also an investor and is joining the nSurely board. Gerry Hassett, ex-Irish Life Managing Director, and InsTech co-founder, also joins as a strategic advisor.
Why: The funding will be used to fund the company’s expansion plans, with plans to launch pilot projects in several European countries next year.
Source: nSurely Press Release
Who: DermView, a Dublin-based operator of dermatology clinics throughout Ireland, has secured funding. The business was founded in 2018 by Eoin O’Reilly and Dr. Rupert Barry.
What: The business has raised €1.9m in its oversubscribed seed funding round. This round was participated in by various institutions and individuals including Michael Cotter, Donagh Barry, Irrus Investments, Tim Crowley and Park Developments.
Why: The funding is to be used to expand DermView’s services into the UK market after it was selected by the NHS as a partner in skin artificial intelligence.
Source: Irish Times
Who: Strong Roots, a Dublin headquartered producer of plant-based frozen foods, has received further investment. The business was founded in 2015 by entrepreneur Sam Dennigan and has experienced incredible growth since expanding into both the UK and the US.
What: The business has received an investment of $55m from household name and worldwide leader in frozen potato products, McCain Foods. McCain foods will take a minority stake in Strong Roots in exchange. Last year, Strong Roots raised $18.3m from private equity firm Goode Partners to fund its US expansion.
Why: The partnership will benefit both parties. Strong Roots will be able to leverage McCain’s global presence to accelerate their international expansion and McCain will expand their product portfolio to include more healthy plant-based options.
Advisers: Emmet Scully and Lisa McEllin of LK Shields corporate team advised the shareholders of Strong Roots.
Source: Strong Roots Press Release
Who: Nova Leah, a cybersecurity technology company with offices in Ireland and the US, raises seed funding.
What: The investment amount was not disclosed. The round was led by Northwell Holdings & Ventures. Existing investors Kernel Capital and Sure Valley Ventures also participated.
Why: Nova Leah plans to use the funds to significantly expand its market opportunity and global reach.
Advisers: Emmet Scully, partner, and Lester Sosa-Villatoro, senior associate in LK Shields’ corporate department acted for Sure Valley Ventures and Kernel Capital
Source: Independent
Who: Query Layer, a privacy tech start-up co-founded by Irishman Padraig O’Leary, has raised seed funding.
What: The company has raised €2m in seed funding, led by Nauta Capital.
Why: The funding will be used to finance the company’s European growth plans, with plans to grow its team from 20 to 25 over the next 12 months.
Source: Irish Independent
Who: Tympany Medical, a Galway-based company, whose product is designed to assist surgeons operating on the human ear, has raised funding.
What: The company has raised €3.5m, in a funding round led by the Atlantic Bridge University Bridge Fund. It received significant investment from Ascentifi, alongside Enterprise Ireland, Mayo Clinic Ventures and Xenium Capital.
Why: The funding will be used to accelerate the company’s growth plans, primarily by increasing staff numbers. Co-founder and CEO, Liz McGloughlin has also highlighted the funding as being crucial, given the capital-intensive nature of the business.
Source: Sunday Business Post
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.
THOUGHT OF THE WEEK
Deloitte Technology’s Fast 50 Awards seek to rank the country’s 50 fastest growing technology companies based on revenue growth over the last 4 years, celebrating innovation and entrepreneurship in Ireland’s indigenous technology sector.
Many of this year’s winners have achieved accelerated growth and scale on the back of the Covid-19 pandemic, showing outstanding resilience and ingenuity during unprecedented times.
Congratulations to all of this year’s finalists across all categories, and in particular, to Peter Foley and Let’s Get Checked, this year’s overall winner of the Deloitte Fast 50 Award.
Link to highlights here:
https://go.renatus.ie/e/
@RenatusCapital Tweets
18.3%
The YoY increase in the value of Irish services output for October 2021. The most notable changes were in the Accommodation and Food Service Activities (+104.4%). @CSOIreland
€52K
The median deposit for Irish first-time homebuyers for H1 2021, of which 40% used gifts to pay the deposits, according to figures from @BPFI @RTEbusiness
14%
The YoY decrease in the NI car sales for November 2021 amounting to 2,524 new cars sold. @BelTel
47.6%
The YoY increase in the new car registrations in Ireland for November 2021 amounting to 2,167 cars. @CSOIreland
5.3%
The YoY increase in the Irish consumer price index for November 2021. The most notable changes were in Transport (+16.2%). @CSOIreland
2.73%
The average mortgage interest rate in Ireland as at October 2021 vs EU average rate of 1.28%, according to figures by CBI. @IrishTimes
€260m
The amount Irish people spent on their credit and debit cards every day in November, according to new economic outlook from Davy. @IrishTimes
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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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