Renatus Weekly M&A & Company Performance Private Equity Newsletter 14/11/2021

Deal Details: One of Ireland’s largest insurance brokers, Campion Insurance, is to be acquired by PIB group, pending regulatory approval. The deal consideration is reported to be over €70m.

Campion Insurance was established in 1984 by Jim Campion and has since grown to be one of Ireland’s largest insurers with 12 offices throughout the country. Campion operates in the areas of commercial insurance, personal insurance, and life & pensions.

The business reported revenue of €21m in 2021 and employs a total of 180 people, all of whom will stay on post transaction along with founder and current CEO, Jim Campion.

PIB group, established in 2015, is an insurance intermediary with backing from private equity firms Apax funds and the Carlyle Group. This is PIB’s third acquisition of a retail insurance broker in Ireland this year. The group reported a turnover of c. £152m in 2020.

Advisers:
Campion Insurance:
Legals – Wallace Corporate Counsel Gar Smyth, Sean Hiney (Legals)
Mazars Deal Advisory team led by John Bowe, Danial Gallery (Corporate Finance), Mark Mulcahy and Gerry Vahey (Vendor DD)

PIB:
Matthew Cole led the DLA Piper team on the legals
John Casey of PwC carried out FDD and advised on tax aspects.

Renatus Comment: PIB is continuing its acquisition spree making this its 46th acquisition since 2016. Campion’s culture and highly acquisition-focused strategy will likely fit well into the PIB group. The number of insurance deals for 2021 is likely to be in the high teens which makes it the most active sub sector for M&A in 2021.

Source: PIB Group Press Release

Deal Details: The management team at Dublin-based technology services provider, Triangle, has successfully bought out majority shareholder Kieran McCabe.

Triangle was founded in 2001 and is a leading enterprise technology services company that offers data centre optimisation, multicloud automation & orchestration, security & networking, and digital workspace managed services. The business reported revenue of over €28m in 2019 and employs around 100 people.

The new ownership consists of the management team led by Paul Flavin which includes Miriam Byrne, Brendan Healy, Donal Byrne, Michelle Harris, and Mark Byrne.

Advisors: Triangle was advised by Eugene F Collins, with the team led by Garrett Miller, Ray Byrne and Niall Marren, and KPMG, with the team led by Eoghan Quigley and Fursey Kenny.

Renatus Comment: Triangle has grown steadily over the past twenty years and now supply its range of managed services to some of the largest enterprises in the world. The business has only recently begun extending its offering overseas, starting with the US. It appears there is still much more room for growth as the business continues to expand internationally. This MBO will allow the management team to build on the business’s success achieved to date and continue to grow as the business goes international.

Source: Bank of Ireland Press Release

Deal Details: American energy and water-related tech company, Itron, has acquired Smart Efficient Lighting Control (SELC) from Xylem. The deal consideration was not disclosed.

SELC, an operator in the smart lighting controls industry, was founded in Belmullet, Mayo in 1982. Since its founding, the business has grown to sell its products all over the world with lighting control nodes installed in Ireland, Europe, the UK, South Africa, and the US.

SELC’s owner prior to this transaction, Xylem, acquired the business in 2017 and is a leading water technology company.

Itron is an American publicly traded technology company that specialises in the areas of energy and water. In 2020, the business reported total revenue of around $2.17bn. Itron recently expanded into the areas of smart cities and industrial IoT solutions.

Advisers: Brian McCloskey, with assistance from Jamie Spring, led the Matheson legal team for Itron.

Matt Cole led the DLA Piper Ireland team on the legals for Xylem.

Renatus Comment: Itron has announced that the motivation for this acquisition was to improve its smart city offering. Itron and SELC had worked together on various smart city projects throughout Europe, Australia, and the US over the past few years. This acquisition will allow Itron to vertically integrate SELC’s offering into its Smart City solution and become an end-to-end smart city solution provider.

Source: Itron Press Release

Deal Details: Glanbia plc has announced an agreement for the sale of its 40% stake in Glanbia Ireland DAC to Glanbia Co-op for a reported purchase price of €307m. The transaction is expected to be completed in early 2022.

Glanbia Ireland is a joint venture owned 60% by Glanbia Co-op and 40% by the PLC. Glanbia Ireland is the largest milk processor and grain buyer in Ireland, producing a range of value-added dairy ingredients and consumer products as well as selling farm inputs. In FY20, Glanbia Ireland generated €1.9bn in revenue and a profit after tax of €60m.

Glanbia’s stake will be sold to Glanbia Co-op, which is owned by a co-operative of farmers who supply it. Following the exit, the business will be focused solely on Glanbia Performance Nutrition and Glanbia Nutrionals. 50% of the sale proceeds will be returned to shareholders via a share buyback. Glanbia PLC generated FY20 revenues of €3.8bn, which converted to an EBITDA of c. €523m.

Advisers:
Glanbia PLC:
Financials: Credit Suisse International
Legal Advice: Arthur Cox.

Glanbia Co-op:
Financials: David O’Kelly, Chris Donnelly and Hazel Cryan from KPMG.
Legal Advisor: Matheson

Renatus Comment: The deal will see Glanbia PLC fully exit the dairy business in Ireland, its original core business, bringing it focus solely onto food ingredients and sports nutrition. Glanbia Performance Nutrition and Glanbia Nutrionals accounted for the bulk of last year’s €3.8bn group revenue, with deal allowing further focus on growth in these areas. Glanbia Nutritonals in particular saw revenues increase by 16% YoY, with demand for its products from health-conscious consumers remaining strong throughout the Covid-19 pandemic.

Glanbia is trading north of 13.1x EV/EBITDA and selling shares in the Co-op at a reported 6.2x EBITDA back to the farmers co-operative who will have a reduced but still significant stake in the Co-op. The same group will still be significant shareholders in the plc which they financed and cultivated in the early years.

Kerry executive tried a similar deal with its Co-op shareholders but have failed. It is phenomenal to think that Glanbia and Kerry, two of Ireland’s biggest success stories worth over €26bn in enterprise value were funded and mentored by the farmer co-operatives. The co-ops deserve huge credit for backing the right executives to lead these businesses at the early stages and for allowing them to list on the stock exchange.

Source: Glanbia Press Release; The Irish Times

Deal Details: Business Growth Fund (BGF) have invested a reported €10.5m into Irish childcare provider Tigers Childcare.

Tigers was established in 2003 and currently operates a total of 14 childcare centres, the majority of which are located throughout Dublin with one in Meath and one in London. Tigers cater to over 2,000 children through these childcare centres and employ c. 200 employees.

Tigers was founded by current CEO Karen Clince.

Advisers: A Mazars Ireland team, led by Mark Mulcahy with Anthony Shiel (FDD) lead the financial due diligence with assistance from Gerry Vahey (Tax DD).

A Deloitte team led by Jan Fitzell provided lead M&A Advisory services to Tigers.

Renatus Comment: The Irish Childcare market is a space that has received significant international attention recently. Busy Bees, the UK based international childcare provider, recently featured in our newsletter after acquiring Giraffe and Park Academy Childcare, two Irish businesses. With the backing of BGF, it will be interesting to see if Tigers can leverage this deal to emerge as a leader in the Irish childcare space in the coming years.

Source: Irish Times

Deal Details: Irish start-up Robotify has been acquired by Imagine Learning, one of the largest digital education providers in the US. The deal value has not been publicly disclosed but is estimated to be close to €20m.

Robotify, based in Dublin and founded in 2015 by Adam Dalton and Evan Darcy, teaches students to code through the use of robots and simulation.

The business recently partnered with Apple co-founder, Steve Wozniack’s, WozEd to bring access to its robotics platform to teach students around the world by providing access to a virtual learning experience. Robotify had net assets of €656k as at December 2020.

Imagine Learning is US-based and was founded in 2010. It has made investments in more than 15 edtech companies. It serves more than 10 million students and partners with more than 7,500 school districts across the US. It is led by CEO Jonathan Grayer.

Advisers: 
CF – CKS Finance
Legal – Jordan O’Brien and Deirdre MacCarthy from Maples Group
Tax – Clancy & Associates
Accounting assistance – Denis Breen and the ProfitPal Accounting team.

Renatus Comment: The deal marks a remarkable success story for two young Irish entrepreneurs and continues the success of Irish tech start-ups in the US. Adam Dalton and Evan Darcy are just 23 years old, having started Robotify in 2015 with €3k of savings. The two have emphasised that this is just the beginning of their journey, with their goal being to ultimately make programming more accessible to young minds around the world. The deal expands the reach of Robotify, giving them access to Imagine Learning’s 10 million students in the US.

Source: Irish Times

Deal Details: ICT Project Management Limited is acquired by Action Point Group for an undisclosed amount.

Dublin-headquartered ICT, founded in 2002 by Barry Byrne, is a managed IT services firm. It provides services to clients across a wide range of sectors including biotechnology, legal, financial services and manufacturing.

ActionPoint is a multi-award winning digital transformation services business headquartered in Limerick with nationwide offices and an office in the UK.

Advisers:
ICT Project Management:
Clearwater International (in its 6th TMT transaction in the past year) led by John Sheridan, Daniel Lavelle and Michael Quinlivan acted as corporated finance advisors with Kearney’s Solicitors as legal advisers.

ActionPoint Group:
Holmes Law led by George Kennedy and Deloitte (financial due diligence)

Renatus Comment: A key motivator for Action Point in completing this acquisition was improving its competitive position in the Dublin market. Prior to acquiring ICT Project Management, Action Point had offices in Limerick, Cork, Galway, and Lisburn. This acquisition has added a Dublin office to the group, allowing Action Point to better serve and compete in the highly competitive Dublin market.

Source: Clearwater International

Deal Details: Walsh Whiskey has been acquired by Amber Beverage Group (ABG) for an undisclosed amount.

Walsh Whiskey, founded in 1999 by Bernard and Rosemary Walsh and based in Carlow, has two multi-award-winning fine whiskey brands: The Irishman and Writers’ Tears, which are being sold in over 50 countries.

Luxembourg-based Amber Beverage Group is a rapidly growing global spirits company. Its products are found in millions of households and venues across the globe. ABG owns and bottles 100 brands as well as distributing more than 1,300 third-party brands into 185 countries.

Advisers: Walsh Whiskey received M&A advisory from Alantra and from Baker Tilly Ireland. The Baker Tilly team was led by Greg Hogan.

Renatus Comment: This deal is a huge win for husband-and-wife duo Bernard and Rosemary Walsh as well as the Walsh Whiskey brand. With ABG’s reach into 185 countries worldwide, the Walsh Whiskey brand will likely be better equipped to rapidly undergo further expansion. Bernard Walsh is reported to stay on as managing director post-acquisition and will continue to play a pivotal role in the brand’s growth story. This acquisition also represents ABG’s first move into the Irish whiskey sector, a subsector in the spirits category which has experienced standout growth over the past decade.

Source: Walsh Whiskey Press Release

Deal Details: Dundalk Football Club has been acquired by a local consortium from Chicago-based investment group Peak6. The deal amount and the identity of the new owners has not been disclosed.

It is reported that the consortium consisted of sports tech firm STAT Sports and former owner Andy Connolly.

Dundalk FC was acquired by Peak6 in 2018. The team won the double in 2018 and retained the league title in 2019 but the arrival of Bill Hulsizer, the father of Peak6 boss Matt, midway through that year was a significant turning point.

Advisers: None mentioned

Renatus Comment: While the exact identities of the consortium have not been revealed, it is reported that the club is back in local hands. This will come as a relief to fans, some of which have been protesting against Peak6’s ownership and management of the club. It is reported that c. €250,000 is to be left in the club coffers, putting the new management in a good position to invest in the future success of the club and strengthen local ties.

Source: Dundalk FC; Independent

Deal Details: Energystore, based in Holywood, Co. Down has acquired WarmFill for an undisclosed sum.

Energystore manufactures, supplies and installs a range of products, including bonded cavity wall insulation superbead and insulation designed for floors and roofs. ​​​​​The business is based in Holywood, Co. Down and is owned by Bacar Ltd. The company is led by William McCandles. The business reported net asset at September 2020 of £4.4m.

WarmFill is the manufacturer of market-leading cavity wall insulation products. WarmFill is based in Larne, Co. Antrim, and is led by director Brendan McCrea. Prior to the deal, the business was owned by Brendan and Una McCrea.

Advisers: None mentioned.

Renatus Comment: With Energystore already operating from five production sites across the UK, serving a variety of sectors, the acquisition sees them become the largest manufacturer of EPS bead installation in the UK and Ireland. As part of the deal, Warmfill has also acquired WarmFill’s Northern Irish facility. The growth of Energystore by acquisition follows a trend in the wider insulation space, with larger players such as Kingspan, who cover insulation variations such as PIR and XPS, as well as EPS, focusing on M&A growth as a significant aspect of its strategy. M&A growth accounted for €2.1bn of Kingspan’s €2.8bn revenue growth from 2014-2019.

Source: Energystore Press Release; Belfast Telegraph

Deal Details: National Beauty is a leading importer and wholesaler of products to the beauty and cosmetics industry in Ireland. It is based in Cork. The business was founded in 2011 by Will McCreevey and Kieran Walsh. Over the past years, the business has grown steadily and now employs more than 30 full-time staff.

Will McCreevey recently announced that he will be exiting the business and has sold his shareholding to fellow co-founder Kieran Walsh.

Advisers: McCreevey received advisory from Heffernan Financial Advisory, with the team being led by Ger Heffernan, and AMOSS Solicitors.

Renatus Comment:  Beauty Distribution has experienced massive growth since its founding. McCreevey stated his reasoning for the exit was to spend time with family and explore other professional opportunities.

The business works closely with a number of leading social media influencers including Vogue Williams (Bare by Vogue) and Lisa Jordan (Luna by Lisa). The business has capitalised on the recent rise of ecommerce and advertising through social media. It was one of the first businesses in Ireland to work with TikTok in launching its advertising platform.

Source: Linkedin