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Renatus’ Weekly M&A Newsletter – 07/05/2023
May 5, 2023
Renatus’ Weekly M&A Newsletter – 21/05/2023
May 21, 2023
May 14, 2023

Integrity360 acquires Netsecure, Keywords Studios acquires Hardsuit Studios, Gleeson Insurance acquired by PIB Group and more in our latest newsletter.

Renatus Private Equity Dublin, Ireland

Renatus Weekly M&A & Company Performance Private Equity Newsletter 14/05/2023

Dear Reader,

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

THOUGHT FOR THE WEEK

As central banks continue to increase interest rates to attempt to tame inflation, the cost and availability of debt capital in private markets is becoming increasingly serious.
The 3-month base rates shown below are approaching c.4- 5% and when layered with margin and risk premium, the real cost of senior debt is getting close to 10%. This is a huge shift from the high availability of low single-digit % cost debt that encouraged growth in recent years.This high opportunity cost of capital, if sustained, will inevitably tame all asset prices over the years ahead.

 

 

M&A Activity

Integrity360 acquires Netsecure

Deal Details: Integrity360 has acquired Netsecure. Deal consideration was not disclosed.

Integrity360 is a Dublin-based IT security business. It was founded by Eoin Goulding in 2005. In 2021 it was acquired by UK-based private equity firm August Equity. The company had FY Dec 2022 revenue of c. €85m.

Netsecure is a Swedish cybersecurity company founded in 2015 by Jan Lindblom. It is reported to be on track for revenue of c. €10m in 2023.

Advisers: None mentioned.

Renatus Comment: This deal sees Integrity360 continue its pan-Euopean expansion following its acquisition of UK & Bulgaria-based Caretower in February 2022. At an event hosted by The Currency and Pinsent Masons earlier this year, Eoin Goulding, who is now president of the company, spoke about how taking on private equity investment re-invigorated him after he ‘had fallen out of love with the business’. He put this down to what had become an un-manageable workload to deal with alone, which led him to take on a strategic partner and de-risk. He spoke highly of the benefits of private equity when it comes to strategy and achieving scale. With Goulding having since acquired the high-profile AI-startup Altada and continuing to talk about a potential Integrity360 IPO down the line, the coming months and years are likely to remain extremely busy for him.

Source: Integrity360 Press Release

Keywords Studios acquires Hardsuit Studios

Deal Details: Keywords Studios has acquired Hardsuit Studios. Initial deal consideration was reported to be c. $8.25m, split between $6.6m of  cash, and $1.65m in new ordinary shares. This can increase to a maximum of $15m if targets are hit.

Keywords Studios is an international technical and creative services provider to the global video games industry. It was founded in 1998 by Giorgio Guastalla and Teresa Luppino and is headquartered in Dublin. The company went public in 2013 and is currently led by CEO Bertrand Bodson. The business had FY Dec 22 revenues of c. €690.7m, which converted to an EBITDA of c. €120.9m.

Hardsuit Studios is game development studio, based in Seattle, USA. It was founded in 2015 by Andy Kipling and Russell Nelson and has over 70 employees. It does not report turnover or EBITDA information.

Advisers: None mentioned.

Renatus Comment: Keywords Studios continues to be one of the most active acquirers in the industry with this deal following its recent acquisitions of Labcom, Helpshift, Smoking Gun International and Mighty Games. The company has been extremely active in its acquisition strategy since its IPO in 2013, with almost 60 deals completed. Its share price is up over that period from £1.23 to £23.38 as of May 13th.
M&A news in the video game space is currently dominated by the saga surrounding the blocked $70bn merger between Microsoft and Activision Blizzard. Interestingly, Hardsuit Studios worked on high-profile Activision projects Call of Duty and Crash Bandicoot.

Source: Keywords Studios Press Release

Somex Automation Teoranta and Ward Automation acquired by Medical Manufacturing Technologies

Deal Details: Both Somex Automation Teoranta and Ward Automation (Galway) Limited have been acquired by Medical Manufacturing Technologies. Consideration was not disclosed for either deal.

Somex Automation is a Cork-based provider of automation equipment for the medical device manufacturing industry. In FY Dec 21 it reported turnover of c. €3.0m. It was established in 2003 and was owned by Michael Wall.

Ward Automation is a Galway and Sligo-based provider of custom automation solutions. It was established in 1995 and was owned by David McMorrow and John Ward. It does not report turnover or EBITDA information.

Medical Manufacturing Technologies (“MMT”) is a provider of medical device manufacturing solutions based in North Carolina, USA. It is made up of several separate medical device manufacturing brands including Glebar, SYNEO, CATHTIP and Engineering By Design. In 2019 it received investment from Arcline Investment Management.

Advisers:
Ward Automation:
Corporate Finance: DHKN led by Mark Gibbs.
Legal: MacSweeney & Company led by Gavin Bluett.

Somex Automation:
None mentioned.

Medical Manufacturing Technologies:
None mentioned.

Renatus Comment:  These two deals were announced separately this week and show the strength of the Irish medical devices industry. Ireland is Europe’s second-largest exporter of medical device products and is its largest per capita employer of medical device professionals. Both Ward Automation and Somex Automation offer specialised robotisation and integrated solutions for the industry which enable the high level of precision and accuracy required by the world’s leading medical device companies like Baxter, Stryker, Medtronic, Boston Scientific etc., all of whom have operations in Ireland.

Source: Medical Manufacturing Technologies Press Releases

Gleeson Insurance acquired by PIB Group

Deal Details: Gleeson Insurance has been acquired by PIB through subsidiary Campion Insurance for an undisclosed amount.

Gleeson Insurance is a Clare-based insurance services provider that has been in operation for over 35 years. Primary products include car insurance, home insurance, farm insurance, and commercial insurance. The business is owned by Jeanne, Michael, Katherine, Laura, and Megan Gleeson. In FY Oct 21, the business reported turnover of c. €0.7m which converted to an EBITDA of c. €0.1m.

PIB Group Limited is a group of insurance advisory businesses providing advisory, analytics, claims management, premium funding, and risk management solutions. The business was founded in 2015 by Brendan McManus and is backed by private equity firm Apax Partners. It is headquartered in London. In FY Dec 21, it recorded a turnover of c. £230.9m, which converted to an EBITDA of c. £44.5m.

Advisers:
Gleeson Insurance
Legal: Wallace Corporate Counsel led by Gar Smyth and Sean Hiney.

PIB Group
Legal: DLA Piper led by Matt Cole and Blayre McBride.

Renatus Comment: PIB is making its 14th acquisition in Ireland as it adds Gleeson Insurance to its operations. The business made its first Irish acquisition in 2021 and it continues to view the Irish insurance market favourably with recent acquisitions including McGivern, BHP, and Landmark to name a few. Ireland is one of the largest exporters of insurance services in the EU. It is notable that consolidation in the industry has continued at a solid pace amidst interest rate hikes and persistent macroeconomic challenges.

Source: Business Plus

Caragon acquired by Agilio Software

Deal Details: Caragon has been acquired by Agilio Software.

Caragon is an automated data solutions supplier based in Kildare. It was established in 2015 by Garron Mosley and Tony Rudden. Other shareholders included Julija Rudden, Giovanni Matera, Sean Reilly, Patricia O’Gorman, Michael McGrath, Derek O’Doherty and Enterprise Ireland. It does not report turnover or EBITDA information.

Agilio Software is a SaaS-based compliance, HR and e-learning service provider. It was formerly known as Code and was owned by Paul Mendlesohn. It was acquired by UK-based August Equity in 2019. It offers software and support to over 100,000 dental practitioners and 4,000 GP practices & hospitals. It does not report turnover or EBITDA information.

Advisers: None mentioned.

Renatus Comment: Like Integrity360 referenced above, Caragon is also the centre of a buy-and-build strategy from August Equity. Caragon’s software makes for a natural fit within Agilio’s growing software platform and marks its eighth acquisition. Caragon currently manages payroll for 10,000 associate dentists and also offers finance and data management capabilities for 80% of the largest dental service organisations in the UK. The adoption of technology in dentistry and healthcare continues to be driven by regulatory requirements surrounding patients’ data and also increasing costs faced by operators. Digital solutions increase efficiency and save time which can significantly improve operating margins for dentists, GPs and other healthcare operators.

Source: Agilio Press Release

Webtext acquired by SharpenCX

Deal Details: Webtext has been acquired by SharpenCX. Deal consideration was not disclosed.

Webtext is a Galway-based provider of voice-only contact centres with messaging support. It was established in 2014. Colm Keating, Anthony (A.J.) Cahill and Michael Cahill were the three largest shareholders prior to the sale. The business does not report turnover or EBITDA information.

SharpenCX is a US-based platform provider for unified contact centers. It received investment funding from TELEO Capital in December 2022. It does not report turnover or EBITDA information.

Advisers: None mentioned.

Renatus Comment: The acquisition of Webtext will add a suite of message solutions to SharpenCX’s product range. SharpenCX’s current offering uses AI to capture call centre data to help improve the quality of customer interactions. Through the acquisition of messaging-first capabilities with Webtext, the business will create an omnichannel experience. The evolution of AI has been a significant player in data-driven tasks as it can provide in-depth analysis that can help drive higher levels of engagement.

Source: Webtext Press Release

Nortev acquired by Pari

Deal Details: Nortev has been acquired by Pari GmbH. Deal consideration was not disclosed.

Nortev is a Galway-based manufacturer of the equine nebuliser Flexineb, a device for respiratory therapy in horses. It was founded in 2008 and was owned by Declan Moran, Gavan O’Sullivan, Declan McCarron and Bernadette McCarron. It also previously received backing from Enterprise Equity Venture Capital. The business does not report turnover or EBITDA information.

Pari is a German manufacturer of medical devices with a focus on inhalation devices. It was founded in 1906 and is currently led by CEO Arne Dirks. It does not report turnover or EBITDA information.

Advisers:
Nortev
​​​​​​Legal: Regan Wall led by Adrian Wall and Sarah Connolly.
Corporate Finance: Deloitte led by Jan Fitzell, Derek Murphy, Sharné Reeves and Michael Grufferty.
Tax: Deloitte led by Fergal Cahill and supported by Sinead Dooley

Pari:
Legal: Taylor Wessing

Renatus Comment: Nortev is another example of a company born out of the thriving Irish medical devices scene. Gavan O’Sullivan and Declan Moran had both worked on human nebulisers with Aerogen, prior to launching their own company. They recognised an opportunity to apply their knowledge in another niche, in which Ireland holds a leading position globally – the horse industry. Respiratory problems are common in thoroughbred horses when kept in stables due to the high levels of dust inhaled. Nortev’s device offered a simple but effective solution and quickly gained recognition internationally. The company has since gone from strength to strength, opening offices in Canada and most recently, the US.

Source: Pari Press Release

COMPANY PERFORMANCE

Maguire International Limited is a logistics company based in Ballinode, Co. Monaghan. The business was established in the 1980s and offers temperature-controlled distribution to bulk tankers and curtain sided trailers across Ireland, the U.K. and Europe. It is owned by Niall and Dermot Maguire.

In its financial year to June 2022 the business generated a turnover of c. €17.4m, an increase of 14.7% year-on-year. This converted to c. €2.6m EBITDA, an increase of 14.4% year-on-year. The increase in EBITDA was driven by the increased turnover in the business, with EBITDA margins remaining flat year-on-year.

The business finished the year with a cash balance of c. €0.9m, a c. €0.1m increase on FY21. Payments to acquire tangible assets and working capital investment were the most significant post-EBITDA cash movements.

The business employed an average of 107 people during the period at a total cost of c. €3.2m.

Brian Geary Car Sales Limited is a Limerick-based Toyota car dealership owned by Brian Geary.

In its financial year to June 2022, the business generated a turnover of c. €32.6m, an increase of 21% year-on-year. This converted to an EBITDA of c. €1.5m, an increase of 28% year-on-year. EBITDA improvements can be primarily attributed to a reduction in operating expenses as a percentage of revenue.

Significant post-EBITDA cash movements include working capital investment of c. €1.6m and advances to related parties of c. €1.5m. The business finished the year with a cash balance of c. €3.2m, an increase of c. €1.0m year-on-year.

The business employed an average of 55 people in FY22 at a total cost of c. €2.4m.

RECENT FUNDRAISINGS

Who: Everseen, a provider of AI-powered computer vision and hyper-automation solutions, based in Cork.

What: The business has raised a €65 million Series A follow-on funding round led by Crosspoint Capital Partners.

Why: The funding will be used to continue investment into Everseen’s computer vision AI technology and help the company scale.

Advisers:  
Advisory: Focus Capital led by  Martin Higgins, Owen Hackett, John O’Sullivan and Dermot Brennan.
Legal: Arthur Cox led by Connor Manning and Sophie Frederix and including Tim Gleeson and Ellen Gaffney (Corporate and M&A) along with Orrick, Herrington & Sutcliffe LLP led by Karen Dempsey.

Source:  Everseen Press Release

Who: Amara Therapeutics, the Galway-based medtech company established by Brendan Staunton, Dr Emma Carr and Prof Geoffrey Cundiff in 2021.

What: The company has raised €3m in funding to develop its bladder health technology BladderBoss, from Enterprise Ireland, the Western Development Commission, a group of private investors and the Disruptive Technologies Innovation Fund.

Why: The funding will be used for continued product development and entry into new markets. A €5m seed round is planned for later this year to fund further growth.

Source:  Irish Times

Who: Jolt, an Irish co-founded business that has developed fast-charging EV stations

What: The business has raised €150m in a funding round led by InfraRed Capital Partners.

Why: The business anticipates to use the funding to develop thousands of charging stations.

Source:  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.

Liam Booth

Source:
(Google Images & LinkedIn)

Alan Claffey

Source:
(Google Images & LinkedIn)

Ruth Anderson

Source:
(Google Images & LinkedIn)

Jacci Fox

Source:
(Google Images & LinkedIn)

Enda McDonagh

Source:
(Google Images & LinkedIn)

@RenatusCapital Tweets

21%

The increase in Foreign Direct Investment into Ireland in 2022 compared with the previous year (compared with European average of just 1%), according to @EY

7.2%

The rate of inflation in Ireland in April (down from 7.7% in March), according to @CSO

300

The number of new Boeing 737-MAX-10 aircraft (150 firm and 150 options) ordered by @Ryanair this week

46%

The increase in new electric car sales in the first four months of the year vs. the same period last year, according to @CSO

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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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    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.
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    • 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.
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      • Bronagh recently joined Renatus as a Private Equity Associate. As part of her role, she will be researching and executing investment opportunities.
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      • 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.
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    Mark Flood, Director

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    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.
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    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
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    Greg Dilger, Strategic Advisor

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    Patrick Dooley, Associate Director

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    John Dwyer, Chairman

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    • 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.