InsightsNewsletterRenatus’ Weekly M&A Newsletter – 13/03/2022

Renatus’ Weekly M&A Newsletter – 13/03/2022

renatus logo

Dear Reader,

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

Thought for the Week

While most of us reading this are living on the top half of Maslow’s hierarchy of needs, our counterparts in Ukraine are at the very bottom of the pyramid fighting for food, shelter, their lives, and their country. It is hard to have any thought beyond these people.

In our own trivial world, the one thing that has struck us is the effect energy will have on the basket of goods. The direct effect of fuel inflation has been well documented and the consequent effect on the cost of building, etc. However, what has been less well flagged is the fact that supermarkets have created a very low margin supplier ecosystem and in many cases, the food manufacturers’ cost of energy is at least as much as its total profit. These companies will have to increase prices to stay alive and this will further pinch the wider consumer as the basket inflates.

M&A Activity

Xperience Group acquires Riverlite

XPERIENCE LOGO

Deal Details: Xperience, a Cloud & IT services company, has acquired Riverlite, an English provider of cloud, cyber security, and IT managed services. Deal details have not been disclosed.

Xperience, based in Lisburn, is a cloud and IT services, ERP, and CRM provider. The company serves a range of industries such as construction, distribution, manufacturing, and legal. The company had FY20 turnover of £11.7m, which converted to an EBITDA of £1.3m. The business is owned by Iain O’Kane, Patrick Leggett, Martin Mcallister, and Andrew Cavey.

English-based Riverlite specialises in cloud, IT service desk, and cyber security. It also provides professional services, network security monitoring, and phishing protection. The business was founded in 2008 and is owned by Paul Ogglesby. Riverlite appears too small to file turnover and EBITDA information.

Advisers:
Xperience:
Deal Advisory: Wayne Horwood, Rodney McCaughey, Mark Hood of  HNH provided corporate, financial and  tax advice.
Legal: Vicky Dummigan of Davidson & McDonnell

Renatus Comment:  Cyber and IT security have become an increasingly important consideration for all businesses. Xperience has sought to expand this part of its business and capitalise on market growth through consolidation plays within the sector. The business acquired Green Duck Ltd in October 2021, with more acquisitions reportedly planned.

Source: Xperience Press Release

Beauparc acquires The Bin Collection Business

BEAURPARC

Deal Details: Beauparc has acquired the Bin Collection Business from publicly traded Swedish waste business, Kollect on Demand. The deal consideration was a reported €2.35m (SEK25m).

Founded in Waterford, Ireland, Kollect operates in the waste industry and is listed on the Nasdaq under the symbol: KOLL. The Company services two types of customers:
(1) those who arrange to have waste collected via the online Kollect booking engine; and
(2) those who use BIGbin smart compactor bins for waste drop-off.
The business reported a turnover of c. €4m in FY20 and is owned by Swedish entity Kollect On Demand Holding Ab. Beauparc has only acquired the bin collection arm of the business and the rest of Kollect will continue trading as normal. Kollect on Demand’s share price was down 3.7% for the week at the close on Friday. It is also down 43.1% over the past 12 months.

Beauparc, founded by Eamon Waters in 1990, is one of the UK and Ireland’s leading utility corporations. Its businesses serve over 340,000 residential, commercial, electricity, and gas customers across a portfolio of 40 waste facilities.

Advisers:
Kollect:
Legal: PJ Kiely of Kiely Solicitors provided legal advisory.
Corporate Finance: Frank Coombes of Coombes Finance provided corporate finance advice.

Renatus Comment: This is Beauparc’s second acquisition since it was itself acquired by Macquarie Asset Management from Eamon Waters (founder) and Blackstone in 2021 in a deal that reportedly valued the company at close to €1bn.

Beauparc has used acquisition as a lever for growth throughout its history and this shows no signs of stopping under new ownership.

Source: MarketScreener Press Release

NTR acquires Murley Wind Farm

ntr-logo

Deal Details: Irish renewable energy business, NTR has acquired Murley windfarm, a 21.6MW wind farm project based in Tyrone from UK-based renewables business, RES. The deal consideration was not disclosed.

NTR is a sustainable infrastructure investor and asset manager that acquires, constructs, and manages clean energy and energy storage projects. The business has developed, constructed, and operated c. 3,000 MW of wind, solar, and energy storage projects in Europe and the USA. NTR is predominantly owned by an investment vehicle of Chairman Tom Roche who founded the business in in the late 1970s.

RES is the world’s largest independent renewable energy company active in onshore and offshore wind, solar, energy storage, transmission, and distribution. RES employs more than 2,000 people and is active in 11 countries.

Advisers: None mentioned.

Renatus Comment: Europe’s push to decrease its dependency on Russian oil in recent weeks has exposed how much further we need to go before renewable energy becomes a viable source for the majority of our energy needs. Many countries are simply unable to forego oil purchases and some have turned to increased coal use as an alternative.

This reality will likely spur further investment into the renewable space across Europe and as such we should expect to see the number of renewable asset deals increase over time.

Source: NTR Press Release

Skelligs Chocolate acquired by McKillen Corporation

skelligs-choclate

Deal Details: Kerry-based chocolate and confectionery producer, Skelligs Chocolate, has been acquired by a business entity connected to the McKillen Corporation. The deal consideration was not officially disclosed but was reported to be in the region of €2m.

Skelligs Chocolate runs an ‘open plan’ production facility in Kerry, which is open to the public, where Skelligs produces chocolate and other confectionery products for the Irish retail market. The business was previously owned by Colm Healy and employs c. 25 people.

McKillen Corporation, led by Paddy McKillen Junior, is the owner of Press Up Hospitality Group, Grafton Luxury Workspaces, and Oakmount. Breffney O’Dowling Keane has been appointed as the new managing director of the business by McKillen Corporation.

Advisers: A Philip Lee team of Bernard McEvoy and Keelin Gavagan provided legal advice to the Vendors.

Renatus Comment: Irish entrepreneur Colm Healy bought Skelligs in 2004 and expanded the business from a small craft chocolate operation into a recognisable Irish brand which can be seen at retail outlets such as Avoca and Brown Thomas. It is also a significant tourist destination with over 70,000 guests visiting the Skelligs production facility each year.

Source: Irish Times

MyComplianceOffice to acquire Schwab Compliance Technologies

mco logo

Deal Details: MyComplianceOffice (MCO), an Irish fintech company, has agreed a deal to acquire Schwab Compliance Technologies. The deal is expected to complete in mid-2022.

MCO develops compliance software solutions to manage governance, risk, and compliance responsibilities. The business is led by CEO, Brian Fahey.

Schwab Compliance Technologies (SCT) is a provider of advanced employee monitoring services. It has developed cloud-based compliance tools and technology that is used by about 700 corporate clients and nearly 100,000 licensed system users. The business is a subsidiary of Charles Schwab Corporation. Based in Chicago, the business has raised €9.15m in funding to date.

Advisers: None mentioned.

Renatus Comment: The deal sees MCO putting to work some of the €10m in debt financing which it received from Accel-KKR in October of 2021. Having originally been set up as a management buy-out from Fidelity Investments, the deal sees MCO acquire a division of Charles Schwab, one of Fidelity’s key rivals. Given the commonalities between both operations, the combined business should generate significant synergies, helping to establish MCO as one of the market leaders in the conduct risk technology space.

Source: MCO Press Release

Digital DNA acquires Learn Inbound

digital dna logo

Deal Details:  Digital DNA, the media, publishing, and events company has announced the acquisition of Irish-based inbound marketing education platform and conference series, Learn Inbound. Deal details have not been disclosed.

Ddna Ltd, t/a Digital DNA, offers advertising services, including advisory, creative services, and production of advertising materials. Digital DNA was founded in 2015 and is based in Ballynahinch. The business is owned by the Business Post Media Group and led by CEO, Simon Bailie.

The Learn Inbound conference series has attracted thousands of marketers to learn about the latest innovations in inbound marketing. The brand has hosted over 100 events, with over 5,000 marketers attending from more than 25 countries. The business also runs a series of training programmes centred around marketing strategy. The business is owned by Mark Scully and William Hanna.

Advisers: None mentioned.

Renatus Comment: The acquisition sees Digital DNA continue its growth within Ireland and the UK, following its acquisition by the Business Post Media Group in 2019. The scale offered by coming under the Business Post Group should prove highly beneficial to Learn Inbound also, with Digital DNA looking to lean upon its event management expertise and continue to grow the existing Dublin-based conference which has proved so successful to date.

Source: Digital DNA Press Release

Outsource Group acquires Ansec

outsource

Deal Details: Outsource Group, an Antrim-based IT firm, has acquired cyber-security firm, Ansec, for an undisclosed sum.

Outsource Solutions (NI) Ltd provides cyber security and IT managed services. Based in Antrim, the business is led by CEO, Terry Moore. The business is wholly owned by Terry and Valerie Moore.

ANSEC IA Limited, an IT consulting firm, provides cyber security, ICT strategy & architecture, digital forensics, risk management and compliance services. The business is owned by Philip Sloan and Peter Leitch, who are both managing directors, along with Judith Leitch and Lisa Sloan.

Neither business reports its turnover or profit.

Advisers: None mentioned.

Renatus Comment: This is the second cybersecurity deal this week and speaks to the level of activity in the space, driven by the growing demand by businesses for these services.

There have been a number of notable cyber attacks in recent times, such as the HSE’s, which has no doubt heightened the perceived need for cyber protection at the executive level across Irish businesses.

Source: Ansec Press Release

Chapters Bookstore acquired

chapters bookstore

Deal Details: Chapters Bookstore has been acquired by the GameStop Ireland founding team of Kevin Neary and Michael Finucane. The deal consideration was not disclosed.

Chapters Bookstore was founded by Willie Kinsella in 1983. The business sells an extensive range of books, both new and second-hand, and plans to launch a website later this month. Chapters has grown to become one of Ireland’s largest independent bookshops and was owned by Willie Kinsella prior to this transaction.

Kevin Neary and Michael Finucane were founders and directors of Gamestop Ireland, which was originally founded in an extension to the Chapters Bookstore premises in 1994. Chapters will retain the existing management team after this transaction, not including founder, Willie Kinsella.

Advisers: None mentioned.

Renatus Comment: There was an outpour of public sadness when Chapters announced it was closing. It is great to see the store now re-open under new ownership.

Kevin Neary and Michael Finucane have previous experience of running a successful retail business so it will be interesting to see what the duo will do with this iconic Dublin brand in the near future.

Source: Irish Times

Company Performance

daltons

John Dalton & Sons Ltd is a leading grain and agricultural merchant based in Kilkenny with a branch in Cullahill, Co. Laois. Established in 1870 by John Dalton, the business has been managed by the Dalton family since. Today it is led by Managing Director John Dalton.

The business reported a turnover of c. €19.4m in FY21 which converted to an EBITDA of c. €1.8m. These figures represent a 15.6% and 54.2% increase year-on-year respectively.

Significant post-EBITDA cash flow movements included working capital investment of c. €1.7m and the purchase of tangible fixed assets for c. €860k. The business closed FY21 with a net cash balance of c. €584k, a decrease of c. €821k from the previous year.

The business employed an average of 37 staff throughout FY21 at a cost of c. €1.56m.

daltons figs
mcardle

Frank Hogan Limited (t/a Frank Hogan Limerick) is a Limerick-based car dealership. The company is the main stockist for Mercedes-Benz, Volkswagen, Volkswagen Commercial Vans and SKODA in Limerick. The business is majority owned by Frank Hogan.

In its financial year to March 2021, the business had turnover of c. €42.3m, a decrease of 3.8% year-on-year. This converted to an EBITDA of c. €1.5m, an increase of 11.6% year-on-year. The rise in EBITDA was primarily driven by a reduction in administrative expenses by 14.4%.

The business finished the year with a cash balance of c. €0.1m, an increase of c. €1.1m year-on-year. The business employed an average of 45 people at an annual cost of c. €2.1m.

mcardle figs

Fundraisings

WhoPhorest, a Dublin-based salon software company, has raised funding.

What: The company, founded by Ronan Perceval in 2003, has raised $12m (€11m) in growth funding from Toronto-based CIBC Innovation Banking.

Why: The funding will be used to accelerate the introduction of new products.

SourceIrish Times

WhoGetvisibility, a Cork-based data security company founded by Ronan Murphy and Mark Brosnan in 2018, has raised funding.

What: The company has raised €10m in a Series A funding round, co-led by Alpha Intelligence Capital and Fortino Capital.

Why: The additional financing will be used to grow the company’s commercial and engineering teams.

Advisors: LK Shields provided legal advice to Getvisibility. The LK Shields team comprsied of Lester Sosa-Villatoro and Michael Cunningham.

SourceIrish Times

WhoDrive Inc, an Irish online car sales start-up. The business owns Sweep, a second-hand car sales app, and TradeBid, a digital marketplace for car dealers. The business was founded in 2019 by Conor O’Boyle and Shane Ennis.

What: The business has raised €1m in funding from backers including Seod Ventures.

Why: The investment will go toward increasing staff numbers from 20 to c. 35.

SourceIrish Times

Who: Satago, an Irish-led fintech business which offers a cash management platform for SMEs, based in London, has raised funding.

What: The business has secured £5m (€6m) in investment from Lloyds Bank, in exchange for a 20% shareholding.

Why: The funding will be used to grow the business internationally, including here in Ireland.

SourceSunday 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.

Joe Cleary

joe cleary

Source:
(Google Images & LinkedIn)

rbk
jc bio

John O’Callaghan

joc

Source:
(Google Images & LinkedIn)

smith-and-williamson-logo
joc bio

Tina McKenzie

tina

Source:
(Google Images & LinkedIn)

fsb logo
tina bio

Donal Cantillon

dc

Source:
(Google Images & LinkedIn)

limerick-chamber-colour-logo@2x
dc bio

Kevin Holland

kh

Source:
(Google Images & LinkedIn)

norbrook
kh bio

@RenatusCapital Tweets

€230m

The sum of funding secured in Irish tech firms which were founded by women during 2021, over twice as much as in 2020. According to @IndoBusiness . @techireland

0.3% & 4.6%%

The respective quarterly and year-on-year growth in eurozone GDP for Q4 2021. This growth was driven by investment, inventories, and government spending. According to @EU_Eurostat

17%

The year-on-year increase in the number of new Irish cars licensed in February 2022, when compared with the same month last year. This accounts for 13,643 cars licensed. According to @CSOIreland

178%

The year-on-year increase in the sum of electric cars licensed in Ireland as of the first two months of this year, almost trebling from 1,309 cars in the first two months of 2021 to 3,642 cars over the same two months in 2022. According to @CSOIreland

2.4%

The year-on-year increase in Irish grocery price inflation in the 12 weeks to February 20th 2022, when compared with the same period last year. According to @Kantar_UKI

14%

The rise of the cost of building a two-bed apartment since the pandemic began in early 2020. According to a study by consultants Mitchell McDermott. @RTEbusiness

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 Family of Investments

Current Portfolio:

Flew the Nest:


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