Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
Following our Covid-19 survey in April this year, we are now carrying out a short end-of-year survey amongst our valued network.
This survey will carry forward some of our Covid-19 questions and will allow us to assess changing sentiment in our community over the last eight months, and it also has some questions about sentiment for 2021.
We will publish the results once completed, and believe the wisdom of our newsletter readers and LinkedIn friends shared with each other will shed some informed light on the year ahead.
All responses are anonymous as per GDPR guidelines.
Deal Details: Davy has acquired a Luxembourg-based fund-servicing firm Novacap Asset Management, for an undisclosed sum. This is Davy’s 11th acquisition since 2012.
Resulting from the acquisition, Novacap has been renamed Davy Global Fund Management Luxembourg S.A. (‘DGFM Luxembourg’), which will provide management company functions for EU-regulated funds known as AIFMs and UCITs.
The Davy Group employs over 700 staff across its three core divisions of capital markets, wealth management and global fund management and has offices in Dublin, Belfast, Cork, Galway, Luxembourg, London and Chicago.
Advisers: None mentioned
Renatus Comment: Since its establishment in the late 1980s, Ireland’s international financial services sector has grown spectacularly, attracting significant levels of foreign investment. These firms are drawn to Ireland due our robust regulatory framework, membership to the EU and also our lucrative tax benefit to name a few.
Dublin has established itself as a European fund admin hub, which will only be further enhanced due to Brexit. This acquisition is expected to complement Davy’s asset management business and the new division will enable Davy to expand its service offerings to now provide fund services for EU regulated funds.
Source: Davy Press Release
Deal Details: Law searching business, Corporate Access Legal Services group, has been acquired by UK-based Phenna Group. An investment group focused on the testing, inspection, certification and compliance (TICC) services space. The financial consideration and terms of the deal have not yet been disclosed.
Based in Dublin and Waterford, Corporate Access Legal Services Group is a market leading law searching services business that delivers leading law and planning searching services, providing some of the quickest turnaround levels in the country.
Headquartered in Nottingham, UK, Phenna Group’s aim is to invest in, and partner with, selected niche, independent TICC companies. This is the 7th such investment made by Phenna Group in 2020.
Advisers: Phenna Group was advised by Knights plc (legal, England), Sarah Connolly and Adam Griffiths from ReganWall (legal, Ireland) and Johnston Carmichael (Financial).
Corporate Access Legal was advised by BDO, ByrneWallace and MK Brazil.
Renatus Comment: This is a back-to-back Irish deal for Phenna group, after last week announcing its investment in ASM Group. Law searching services have become very popular outsourced service utilised by many of the top and mid-market law firms in Ireland. Exiting shareholders of Corporate Access are Jason Clancy (75%), Edward Foran (20%) and Jacqueline Gillane (5%).
Source: Phenna Group
Deal Details: Irish-Swiss baked goods group Aryzta has announced the sale of its North American take-and-bake pizza business to private equity group Brynwood Partners. The terms and conditions of the deal were not disclosed.
Founded in 1984, Brynwood Partners is a PE firm that targets non-core brands exclusively in the consumer sector in North America.
This disposal is part of Aryzta global restructuring strategy, in an attempt to reshape its portfolio. This was announced on Dec 1st and will see the business model slowly move into a “multi-local, lean and agile sector to meet the demand of consumer trends”.
Advisers: None mentioned
Renatus Comment: Aryzta has had well-documented intense boardroom politics, stemming from activist shareholders successfully installing their own nominee, Urs Jordi, as chairman. The reshuffle leaves no Irish presence on Arytza’s board of directors.
Disposing of non-core units like take and bake pizza will potentially allow the company to refocus on organic growth within its performing businesses.
Separately, it is reported that the company has been given just days to respond to a €734m binding offer from US hedge fund Elliot Management for the group.
Source: Independent, Food business news, Aryzta
Deal Details: Irish Life Group has acquired Irish wealth management advisory firm Harvest Financial Services, for an undisclosed sum.
Since its establishment in 1993, Harvest Financial Services manages in excess of €1bn in assets on behalf of 1,500 clients. Its areas of advice include investments, retirement planning, pension consultancy and professional trustee services.
Irish Life Assurance plc, commonly known as Irish Life, is an Irish life assurance and pensions company. Irish Life has been part of the Great-West Lifeco group of companies since 2013, when the Irish Government sold the business.
Harvest’s exiting shareholders are Gerry Devitt (33%), Eugene Foley (33%) and Terry Devitt (33%).
Advisers: David Lawrence of Pegasus Corporate Finance acted as financial advisor to Harvest Financial, and David Ryan and Louise O’Malley from Flynn O’Driscoll provided Harvest with legal advice.
Renatus Comment: The wealth management industry is a highly fragmented market which has seen a great wave of consolidation over the last couple of years. Irish Life has been one of the most active players in the wealth management and pensions M&A space in Ireland. Since 2018, it has acquired Invesco, City Life, Acumen & Trust, Conexim and APT Workplace Pensions and Clearview Investments and Pensions. It was also a contender for Goodbody Stockbrokers when it was on the market. This deal will add a large list of clients to its book and will bring about cross and up-selling opportunities throughout the groups wide range of services.
Source: Irish Life
Deal Details: Dukeshill Ham Company has changed hands as part of a management buy-in. The deal consideration was not disclosed. The management buy-in team comprises executives Mark Gallagher and Andy Culhane of GC Investment Partners along with chairman Des Smith, former chief executive of Aspall Cyder.
Dukeshill Ham Company was founded in 1985 and had been led by Neale and Sarah Hollingsworth since 1998. It supplies a range of premium fine foods direct to the consumer via both online and mail order and to select high end trade partners. Interestingly, it also supplies ham to the Queen.
London-based GC Investment Partners is a private investment firm located in London and headed by Irish men Mark Gallagher and Andrew Culhane.
Advisers: Springboard Corporate Finance advised the shareholders of Dukeshill on the transaction. Ed Dawes, partner at Keystone Law provided the shareholders of Dukeshill with legal advice.
Buy-side parties were advised by David Davidson, partner at Burness Paull and Alex Judd, senior manager at Buzzacott.
Renatus Comment: It’s great to see young Irish investment professionals seeking to make their mark in the SME market. Mark Gallagher is the son of well-known Hotelier Bernie Gallagher of the Doyle Collection and John Gallagher of Crownway investments, from which he probably gets the natural eye for spotting good investment opportunities.
Selling a business to its existing management team can be an attractive option for a number of reasons. The deal can usually be done quickly and privately with minimum disruption to the business while the owner also gets to pass on the business to the people who know it best, thereby helping to secure their legacy. Renatus can provide equity support to management teams to help fund the purchase of the business.
Source: Insider Media
Deal Details: Kilkenny Aut Even hospital, a 71-bed facility, has been acquired by UPMC, the American healthcare group.
The hospital had been owned by Goldman Sachs. The most recent accounts (2018) for the hospital show a loss of €808k from revenues of €22.3m.
Advisers: Deloitte provided Debt & Capital Advisory services to UPMC led by Rebecca Cuffe. David O’Kelly and Siobhan Donlevy provided corporate finance advice to Aut Even.
Renatus Comment: The private hospital space is an area that he seen continued activity, with major investors taking an interest in the space. Larry Goodman’s interests in the Blackrock and Hermitage Clinic in Dublin and the Galway Clinic. Mater Private Group (Dublin and Cork) was acquired by French investment group Infravia in 2018. Beacon Hospital in Dublin is owned by Denis O’Brien. Santry Sports Clinic took in major investment by Carlyle Cardinal Ireland last year.
This is UPMC’s second major deal in Ireland in the last year, following its purchase of Clane General Hospital in Kildare, and follows its acquisition of the Whitfield Clinic in Waterford in 2018.
Source: Business Post
Deal Details: Sysnet, a provider of cyber security and compliance software for businesses, has acquired Viking Cloud, a Chicago-based cloud security company, for an undisclosed sum.
Established in 1989, Sysnet Global Solutions provides payment card industry, cyber security and compliance solutions that help businesses to improve security and acquiring organisations to reduce risk. Headquartered in Dublin, Sysnet has clients in more than 57 countries worldwide, and provides it services to six of the top-10 global payment acquirers.
Advisers: None mentioned.
Renatus Comment: This is Sysnet’s second announced acquisition in the last two weeks, following the announcement of its acquisition of the Managed Compliance Solutions (MCS) division of ControlScan, Inc., a U.S. leader in managed security services specialising in compliance, detection and response. That acquisition established Sysnet as the largest provider of compliance and security management services to almost 4 million SMEs and payment processing organizations worldwide
Sysnet is a family company started in 1989 by Tom Moynagh and now being led by his son and chief executive Gabriel Moynagh. Most recent financials are for the period ending March 2019 and show the company generated EBITDA of c. €2.1m off turnover of c. €25.6m.
The catalyst to this recent growth-through-acquisition was securing an investment of €150m from private equity funds FTV Capital and True Wind Capital in February of this year. The new partners to the business have provided it with the capital to accelerate its growth ambitions and quickly win market share by acquiring complementary peers.
Source: Business Post
Deal Details: Neuraxpharm Group, a leading European specialty pharmaceutical company focused on disorders of the central nervous system (CNS), has acquired Medinutrix Ltd (trading as Aribamed), an Irish privately-owned specialty pharmaceutical distribution company. The terms of the transaction were not disclosed.
With this acquisition, Neuraxpharm now has both the platform and the local expertise to launch
new products in the Irish market for the first time, and will start to build its position as a CNS
specialist in the Republic of Ireland.
Established in 2007, and based in Dublin, Medinutrix partners with leading pharmaceutical manufacturers to commercialise niche pharmaceuticals with differential benefits for individual patients on the Irish market to support medical specialists in hospitals and specialist centers. Therapeutic areas include among others the central nervous system (CNS).
CEO David Shanahan held 100% ownership of Medinutrix before its sale.
Advisers: David Ryan and Louise O’Malley from Flynn O’Driscoll provided legal advice to Neuraxpharm.
Renatus Comment: The medical space (devices, distribution, drug development, etc.) was a hot space for investment and M&A pre-COVID and has proven very resilient throughout it. This is another great example of an indigenous innovative Irish company realising success with an exit to a global player.
Source: Neuraxpharm press release.
Kingspan is among the final bidders for the Japanese conglomerate Bridgestone’s Firestone building products unit. The divestiture is part of the groups strategy to sell off non-core assets within the business to unlock greater value for its stakeholders.
Tennessee-based Firestone designs and manufactures roofing systems, primarily for commercial markets.
Tokyo-based Bridgestone is the world’s largest maker of tyres and has a market value of 2.7tril. yen (€21.3bn).
Source: Irish Times, Firestone Building Products
Applegreen has announced that its co-founders Robert Etchingham (CEO) and Joseph Barrett (COO) and Blackstone Infrastructure Partners are in advanced talks to take the company off the stock market in a deal that would value it at almost €694m.
Together, Robert and Joseph own 41.3% through their holding company B&J Holdings. They will remain “significant equity” investors should the proposed offer – priced at €5.75 per share – be accepted by remaining shareholders, Applegreen said in a statement.
Source: Irish Times
Dublin and London-listed housebuilder Abbey has received an offer from its majority owner, the Gallagher family, to take the company private. The deal relates to c.4.38% of the issued capital of the business for €16m valuing the entire share capital of Abbey at c.£328.8m (c.€364m).
The deal will be financed from the existing cash resources of Gallagher Holdings Limited (GHL).
Shares in the company were trading up 1.2% in Dublin yesterday afternoon.
Source: Independent
The Competition and Consumer Protection Commission (CCPC) has decided to carry out a full Phase 2 investigation into the proposed joint venture between the ESB and Coillte.
This comes after the CCPC determined a more thorough investigation would be needed to establish if the proposed transaction will lead to a substantial lessening of competition.
The ESB is a vertically integrated energy corporation, established by statute, with operations at all levels of the energy sector in the State.
Coillte’s core business is commercial forestry and associated forestry management and forest activities.
Source: CCPC
Mr Justice Michael Quinn of the High Court has appointed Kieran Wallace as examiner to Norwegian Air and several related companies in the group.
The examiner has 100 days to put together an agreement with the airline’s creditors, who are owed c.$5bn (€4.1b). If approved by the court, it will allow the company to continue to trade as a going concern.
The Judge said while the parent company’s centre of main interest was outside of this jurisdiction, he was satisfied that it was capable of being included in the process being conducted in Ireland due to its close connection with the Irish entities.
Source: Independent
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.
Based in Galway, Heaney Meats Catering is a family butchers headed by brothers Kenneth and Shayne Heaney. It specialises in the preparation and distribution of beef, lamb, poultry, pork and bacon to the foodservice sector.
In its latest fiscal year, Heaney Meats saw revenue increase by 8.9% to c. €23.7m. 99% of revenue came from the Republic of Ireland during the year. EBITDA grew by 29.9% to c. €1.7m during the period as a result of overheads remaining largely flat at c. €3.9m. Gross profit margins increased by roughly 1.% to c. 22.4% in FY19.
The company had a net cash increase of c.€1.3k in FY19 leaving an ending cash balance of c.€3.1m. The most significant movement in cash was the c.€533k in fixed asset purchases, mainly spent on motor vehicles.
The company employed an average of 75 people in FY19, at a total cost of c.€2.3m. BWG foods is the ultimate controlling party having acquired a 100% stake in the company in 2019.
Located just outside Tullamore, Co. Offaly, Ireland, Condron Concrete manufactures concrete pipes, manholes and gulley traps as well as concrete roof tiles and accessories.
In its latest fiscal year, Condron Concrete saw revenue increase by 15.1% to c.€25.4m. Although gross margins remained at c.33.9%, EBITDA grew by c. 47% to €6.3m during the period as a result of distribution and administrative costs remaining largely flat at c. €7.2m.
The company had a net cash decrease of c.€208.5k in FY19, leaving an ending cash balance of c.€133.6k. The noteworthy cash movements were the c.€3.1m invested in plant & machinery, motors vehicles and freehold property and the c.€1.8m in new loans taken out.
The company hired an extra 11 people in FY19, bringing the total headcount to 135 people at a total cost of c.€6.0m. The ownership structure of Condron Concrete is Durrow investment Ltd (74.66%), John James Condron (24.89%), Jessica Condron (0.28%) and John Condron (0.18%).
Based in Kildare, Lily O’Briens was founded by Mary Ann O’Brien in the kitchen of her home in 1992. It is a chocolate and dessert manufacturer which was previously owned by the Carlyle Cardinal Ireland fund but sold to Polish group Colian Holdings in 2017 for a reported €40m.
In its latest fiscal year, Lily O’Briens saw revenue decrease by 7.1% to c. €30.0m. EBITDA also decreased by 19.0% to c. €3.0m during the period. The relative underperformance in EBITDA versus revenue was the result of an only minor reduction in overheads coupled with a roughly one percentage point decline in gross margins to c. 31%. It looks like the recent peak of EBITDA performance occurred in 2016, when unadjusted EBITDA hit c. €6.1m.
The company had a net cash decrease of c.€669.5k in FY19, leaving an ending cash balance of c. €2.2m. There was a large draw on cash during the period from a working capital investment of c. €1.1m, the c.€1.2m spent on loan repayments and the c.€522.5k in fixed asset purchases, mainly spent on plant & machinery.
The company hired an extra six people in FY19, bringing the total headcount to 129 at a total cost of c.€5.1m. Polish group Colian Holding is the ultimate parent company of Lily O’Briens Holdings Limited.
Who: Irish start-up Ronspot raises funds. The company has developed a booking system that lets staff pre-book office facilities.
What: €650k fundraise was led by a syndicate, that forms part of the Halo Business Angel Network (HBAN), a joint initiative of Enterprise Ireland, InterTrade Ireland and Invest Northern Ireland.
The WxNW syndicate has contributed €400,000 as part of the funding round. Enterprise Ireland has also separately added in €250,000.
Why: The funds will be used to add new employees and further develop its booking system
Source: Irish Times
Who: Renewable infrastructure company Greencoat Renewables has raised funds in an oversubscribed share placing.
What: The company raised €125m which represents 18% of the company’s issued share capital.
Davy acted as bookrunner on the deal.
Why: The proceeds will be used to refinance the company’s revolving credit facility to take advantage of more than €500m worth of acquisition opportunities in Ireland and other target European countries.
Source: Irish Times
Who: Biopharma company Amryt raises funds in a private placement. The company is developing a drug for a rare medical condition known as ‘Butterfly skin’.
What: $40m (c.€33) round was led by new and existing investors such as Stonepine Capital, LP, Aquilo Capital Management, LLC, Amati Global Investors, Athyrium Capital Management, LP and Highbridge Capital Management.
Why: The funds will be used to improve working capital and may also be used to buy, licences or invest in rare disease technologies, products, businesses or assets.
Source: RTE
Who: Limerick edu-tech company jumpAgrade has receives investment. Co-founded by David Neville and Pádraic Hogan in 2017, jumpAgrade is an online grinds platform which helps students prepare for the Junior and Leaving Certificate exams.
What: €50k is raised after being selected as one of Social entrepreneurs Ireland (SEI)’s Scale Partners for 2020-2022.
Why: The funds will be used to scale the business.
Source: Irish Examiner
Who: iSmash, a UK chain of smartphone repair shops founded by Julian Shovlin, son of Irish property developed Paddy Shovlin.
What: The business, which has 31 stores in the UK, has taken in a minority investment from broadcaster Sky TV.
Why: Funding will be used to open new stores across the UK.
Source: Sunday Independent
Who: FPD Recycling, a cleantech business which has developed technology to recycle flat panel displays such as televisions and computer monitors.
What: The business has raised €1.5m from Elliot Griffin’sled BVP Investments.
Why: Funding will be used for the continued development of the business.
Source: Business Post
Who: Inflection Biotech, a company aiming to develop targeted cancer treatments. The business was founded in 2012 by Darren Cunningham, Michael O’Neill, Paul Tyndall, Owen Laverty and John Scanlon.
What: The business has raised €230k. Recent investors include, Michael Smurfit for €81k and Conor Mallaghan (whose family owns Carton House) for €93k, and tech entrepreneur Pearse Mee for €60k.
Why: Funding will be used for the continued development of the business.
Source: Business Post
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.
Applegreen’s likely take private is very interesting. With the multiple forms of alternative capital options it is unlikely that the great Irish success stories will play out with full visibility on the Stock Market in future years, like they have in the past.
We are not taking an opinion either way, where public listing is good or bad, but what is a little sad is that for scholars of business old and young is that they won’t get to track the progress of these success stories as clearly as they would if the stock was listed.
The evolution of Smurfit, DCC, CRH, Paddy Power (now flutter), Kingspan, Dalata, First Derivatives, Ryanair, Glanbia, Fyffes, Total Produce and many more have been fascinating and mostly inspirational and only last week I spoke to a young business student who was doing a study on these and had so much information to track their progress.
Let’s hope all these entrepreneurs, as the Applegreen founders do so well, are generous with telling the stories behind the growth so they can be role models for the next generation of potential unicorns coming behind them.
45.4
The AIB Irish Services PMI for November 2020, a 2.9 point drop month-on-month. A reading below 50 indicates contraction in the industry, according to @IndoBusiness
11.1%
The growth in Real Quarterly GDP for Q3 2020, versus Q2 2020, amounting to €94.65bn following the easing of COVID-19 restrictions, according to @CSOIreland
15.9% & 22.0%
The year-on-year decrease in the Irish industrial production and turnover, respectively, for October 2020 with the most notable changes in the “Modern” sector (-16.7%), according to @CSOIreland
7.4%
The year-on-year decrease in the Irish services index for October 2020 with the most notable changes in Accommodation and Food Service Activities (-62.1%) and the only sector showing increase was Information and Communication (+9.9%), according to @CSOIreland
1.1%
The year-on-year decrease in the Irish consumer price index (CPI) for November 2020 with the most notable changes in Clothing & Footwear (-7.9%) and Health (+4.0%), according to @CSOIreland
12.4%
The year-on-year drop in the number of new private cars licensed in Ireland for November 2020 amounting to 1,468 cars, according to @CSOIreland
Renatus’ Knowledge Centre
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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