Renatus’ Weekly M&A Newsletter – 06/08/2023
August 6, 2023
Renatus’ Weekly M&A Newsletter – 20/08/2023
August 20, 2023
Renatus Weekly M&A & Company Performance Private Equity Newsletter 13/08/2023
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
THOUGHT FOR THE WEEK
In the past month we came across the below quote from Henry Ford’s book ‘My Life and Work’. Coincidentally, it was the same week that the business he founded in 1903 announced its H1’23 results, generating $3.7bn in net income for the 6 month period.
‘Concretely what I realised about business in that year – and I have been learning more each year without finding it necessary to change my first conclusions – is this:
- That finance is given a place ahead of work and therefore tends to kill the work and destroy fundamental service.
- That thinking first of money instead of work brings on fear of failure and this fear blocks every avenue of business – it makes a man afraid of competition, of changing his methods, or of doing anything which might change his condition.
- That the way is clear for any one who thinks first of service – of doing the work in the best possible way.’
By maintaining meticulous focus on the product and service delivered to the customer, Ford consistently exceeded the expectations of his stakeholders, allowing the company to become what it is today. It reminds us that no big business ever started as a big business and that hopefully, if entrepreneurs at all levels strive to follow the same principle, the financials will look after themselves.
M&A Activity
OneTwenty acquires Catena’s UK and Australian businesses
Deal Details: OneTwenty has acquired Catena’s UK and Australian businesses. Deal consideration was not disclosed.
OneTwenty is a Waterford-based iGaming company founded in 2016. It is owned by Chris Russell, Rebecca Curran, Con Lehane, Ross Wylder Reed and Rhoda Jean Reddy. It does not report turnover or EBITDA information.
Catena is a gaming media company based in Malta but publicly listed on Sweden’s stock exchange. The business was founded in 2012 by Erik Bergman and Emil Thidell. In FY Dec 22 it reported turnover of €110.1m which converted to EBITDA of c. €50.1m. It was reported that the portion of the business involved in this deal generated revenue of c. €4.5m in the twelve months prior to deal completion.
Advisers:
OneTwenty:
Corporate Finance: Bay Advisory led by Brian McDonald.
Financial: PKF Ireland led by David Lucas, Jack Swinburne, Conor O’Rourke and Ben Pentony.
Irish Tax: PKF Ireland led by Eoin Kenny.
Australian Tax: PKF Sydney led by Iain Spittal.
Catena:
None mentioned.
Renatus Comment: OneTwenty is an interesting Irish business at the intersection of media and sports betting, pursuing a significant growth strategy, backed by a recent £9.5m debt raise from UK-based alternative lender ThinCats Investments. The business works by using media and entertainment to create engagement and direct users to betting operators. CEO Chris Russell explained the company’s position to the Business Post as ‘a strategic investment vehicle that is rolling up small affiliate and sports digital publishing businesses’. Previous acquisitions include Swedish Astro Media AB as well as UK-based Helicon Digital, Seven Star Digital and Moneta Communications.
Source: Business Post
MBC Financial acquires Larry O’Mahony Financial Services
Deal Details: MBC Financial has acquired Larry O’Mahony Financial Services. Deal consideration was not disclosed.
MBC Financial is a Cork-based financial planning consultancy company established in 2008. It is owned by Alan McCarthy, Denis Collins, Desmond Murphy and Shane Sullivan. In FY Aug 22 it reported turnover of c. €0.5m.
Larry O’Mahony Financial Services is a Cork-based financial consultancy company. It was owned by Larry O’Mahony. In FY Dec 21 the business reported turnover of c. €0.2m.
Advisers: None mentioned.
Renatus Comment: This deal follows the acquisition of MBC Financial’s sister company, MBC Insurance, by UK-based Clear Group in April this year. We are seeing increasing consolidation of independent financial advisory firms as part of a broader trend across the entire professional services space. According to our recent Renatus H1 Deal Activity Report, Financial Services was the most active sector for M&A in the first half of the year, with 26 deals completed in the space. Tyrone-based Kennedy Independent Financial Advice and Dublin-based KD Retirement Services were among the financial planning firms acquired by larger groups in recent weeks. Financial advisory tends to be largely relationship-driven at the local level. Through M&A, acquiring firms can efficiently grow their AUM while smaller operators benefit from monetising the value that they have created over years running their business.
Source: MBC Financial Press Release
Glanaco management team completes MBO
Deal Details: The Management Team of Glanaco have completed an MBO. Deal consideration was reported to be €1.
Glanaco is a Cork-based engineering company specialising in the manufacture of wheel wash and road sweeper products. It was previously owned by technology firm Deepverge who acquired the business for a reported €1.3m last year. The business does not report turnover or EBITDA information.
The firm will now be owned by Tony Ryan (Managing Director) and Michael Fitzgerald (Operations Director).
Advisers: None mentioned.
Renatus Comment: This deal comes after Deepverge, which primarily operates in the UK, found itself in financial difficulty forcing it to dispose of some of its non-core businesses. It was temporarily suspended from the AIM in London because of this, resulting in this sale. The move will save the 23 jobs at Glanaco which is itself profitable and had reportedly been subsidising other loss-making divisions in the group. Both Ryan and Fitzgerald will re-gain control of the company which they say has a healthy pipeline, just a year after collecting c. €1.3m from its sale.
Source: Independent
COMPANY PERFORMANCE
Monaghan & Sons (Galway) Limited is a motor dealership that also sells fuel and operates retail shops. It is based on the Tuam Road in Galway and is owned by Joseph and Leo Monaghan.
In its financial year to Aug 2022 the business generated a turnover of c. €47.9m, an increase of 14.9% year-on-year. This converted to c. €3.8m EBITDA, an increase of 96.8% year-on-year. The increase in EBITDA was driven by a 2.2% absolute increase in gross margin combined with a 1.2% reduction in admin cost as a proportion of revenue (operating leverage).
The business finished the year with a cash balance of c. €3.1m, a c. €0.8m decrease on FY21. Working capital investment and payments to acquire property, plant & equipment were the largest post-EBITDA cash movements.
The business employed an average of 129 people during the period at a total cost of c. €4.0m.
RECENT FUNDRAISINGS
Who: Neurent Medical, a Galway-based medtech company that treats inflammatory sinonasal diseases. It was founded by David Townley and Brian Shields in 2015.
What: The business has raised c. €10m in funding from investors including Life Sciences Partners, Atlantic Bridge, Fountain Healthcare Partners, Xenium Capital, Eamon Brady, Bernard Collins, Enterprise Ireland and the Western Development Commission.
Why: The business will use the funding to continue to develop its FDA-approved Neuromark device
Source: The Sunday Times
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.
@RenatusCapital Tweets
1/3
The proportion of Ireland’s energy requirement in July that was met by wind generation, according to @WindEnergyIreland
2.4%
The increase in advertised rents across the country in Q2 2023 vs Q1, according to @Daft.ie
5.8%
The level of inflation in Ireland in July (an 18-month low), according to @CSO
753,000 tonnes
The annual amount of food waste in Ireland, according to @EPA
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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.
OUR INVESTMENTS
Current Portfolio
Flew The Nest
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