Dear Reader,
You are receiving this mail every week as we see you as a key partner and we look forward to continuing to enjoy our journey with you over the decades ahead.
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
More than 600 of Ireland’s SME owners, managers, entrepreneurs and advisors have already signed up to join us for The Real Deal 2019 in Goffs, Co. Kildare on October 10th. We expect the event to sell out soon so please book your place now to avoid disappointment.
We would be delighted if you would join us on the day.
To buy your ticket, please visit The Real Deal website here.
Speaker Announcement
This week we were delighted to announce that current All Ireland Senior Hurling manager Liam Sheedy will be joining the People and Culture panel at The Real Deal 2019.
Liam is an outstanding leader who demands an exceptionally high level of quality and performance from his teams to deliver for their community, their customers and themselves.
In a sporting capacity, Liam inherited an underperforming side low in confidence and built them into the best in the country in the space of 12 months. Central to this was the transformation of the culture inside the dressing room.
In a professional capacity, Liam is responsible for strategic planning, risk, budget and financial management for 6 Munster counties, the retail branches, Business Banking teams and the Munster overall headcount.
Liam will join Alan Cox of Core and Helen Tynan of Google to discuss the critical elements of People & Culture at The Real Deal 2019. Other speakers on the day include Bobby Healy, David McKernan and Nikki Evans with more to be announced. Each panel will be moderated by Matt Cooper.
For more information, please visit the website here and the 2018 highlights video can be viewed here.
We hope to see you on the day!
Deal Details: Cellnex Telecom has acquired Cignal from InfraVia Capital Partners for an EV €210m.
Cignal is Ireland’s newest communications infrastructure provider created by the acquisition of the extensive Coillte telecoms portfolio in September 2015. The company operates 546 sites in Ireland.
Cellnex Telecom is Europe’s leading operator of wireless telecommunications and broadcasting infrastructures with a portfolio of over 45,000 sites in Spain, Italy, Netherlands, France, Switzerland, the United Kingdom and Ireland.
Advisers: LK Shield’s team led by Corporate partner David Brangam with assistance from Gerry Halpenny (Corporate), James Byrne (Corporate), Gillian Dully (Corporate), Andrew Power (Banking) and Peter O’Reilly (Property) advised InfraVia Capital Partners. PwC, led by Denis O’Connor (financial) and John Murphy (tax) also provided advice to InfraVia Capital Partners.
Renatus Comment:
In same way as GPA and Tony Ryan spawned a number of future entrepreneurs in aviation, the same is likely to be true in time from the Denis O’Brien/Digicel stable and this is one such success story. Donal O’Shaughnessy, chairman and primary investor, cut hist teeth with Esat Digifone and spent ten years at the top of Digicel. Likewise Colin Cunnigham the CEO came through the Esat stable.
Source: Cellnex Telecom
Deal Details: Dublin professional services firm Baker Tilly (formerly Hughes Blake) has acquired Barr Pomeroy, a smaller, specialist firm, for an undisclosed sum.
Dublin headquartered Baker Tilly is a member of Baker Tilly International, having joined the grouping in 2016. Last year, it reported fee income of €11 million.
Barr Pomeroy, established in 1989 by Marie Barr and Michael Pomeroy, specialises in taxation, auditing, corporate restructuring and corporate finance services.
The move, which will see Barr Pomeroy’s operations and clients merge into the Baker Tilly operation in the Republic, will grow the firm’s headcount to more than 130 staff.
Advisers: None mentioned
Renatus Comment: The trend of consolidation in professional services continues, with a new deal announced every few weeks. Key to their success is unlocking the goodwill held by the original founders.
Source: Irish Times
Deal Details: Greencoat Renewables Plc signed a deal to buy the 20-MW Gortahile wind farm in County Laois from Glenmont Partners. The value of the deal has not been disclosed.
The transaction will be financed from Greencoats €380m credit facility and its total borrowings will be 46% of its gross asset value upon completion.
Gortahile is a 20-MW wind farm was commissioned in August 2010. Revenues from Gortahile are contracted under the REFIT 1 scheme, which provides a guaranteed minimum floor price for the electricity it generates.
Advisers: Russell Smyth & James Delahunt of KPMG was the lead sell-side advisor to Glenmount.
Renatus Comment: Greencoat continues the impressive growth of its energy assets. The business had €940m of windfarm assets as at the end of June and a further €200m in funding to continue its expansion.
Source: Renewables Now
Deal Details: INDEFF has acquired ONG Automation, an Irish company specialising in Industrial Automation and Manufacturing Execution Systems. The financial details of the deal were not disclosed.
ONG Automation was founded in 1993 by John O’ Neill and Derry Good. It is an Endorsed Wonderware System Integrator with more than 1,000 projects completed all over the world – with a focus on Ireland and the United Kingdom.
Advisers: Kieran Regan of ReganWall acted as legal adviser for INDEFF.
Renatus Comment: Founded in 2003, INDEFF is an experienced Industrial Automation and Manufacturing Execution Systems expert. The group has completed more than 1,000 projects worldwide. INDEFF improves the quality and efficiency of companies, preparing them for Industry 4.0, by helping to create smart factories.
Source: INDEFF
Deal Details: The founders of Irish whiskey and gin producer West Cork Distillers are buying out the majority stake in the business held by the UK-based Halewood group.
The value of the buyout is being reported at €18m and is being financed by new equity provided by ISIF.
Post the buyout, original founders Denis McCarthy, Ger McCarthy and John O’Connell will hold a majority ownership of the business. The trio founded the business in 2003 in Union Hall, West Cork, Ireland. Ger & Denis had been deep sea trawler men whilst John was a research & development scientist for some large blue chip food & beverage companies primarily Kerry.
Separate to the buyout, the business has also raised growth funding from the ISIF-backed Irish Whiskey Growth Fund whichi has agreed to lend to the business to fund its international rollout.
Advisers: Halewood Wine & Spirits was advised by LK Shields team including the Head of Corporate and Commercial, Richard Curran, Corporate and Commercial Consultant Seanna Mulrean, and Corporate and Commercial Associate Solicitor Joseph De Paor.
Renatus Comment: This is such a genuine story. Marketeers talk about story telling and often times over tell the story. This one minute video gives a flavour of the story behind this phenomonal success story that is under told.
Source: The Irish Times
Deal Details: Ovo Energy has struck a £500m (€562m) deal for the UK household business of its bigger rival SSE.
Ovo Energy, founded in 2009 by Belfast-man Stephen Fitzpatrick, has agreed to pay about £400m (€450m) in cash and will also issue a loan note to SSE upon completion of the deal that will be due for repayment in 2029 with an annual interest rate of 13.29%, giving an overall enterprise value of £500m.
Ovo is the UK’s largest independent energy supplier, with 1.5 million customers and about 2,000 employees.
SSE is the third largest supplier in the UK energy market, with around 3.5 million household customers and 8,000 staff. It also owns SSE Airtricity in Ireland. SSE’s household supply business made an operating profit of £35.3m (€39.7m) in the last financial year, down from £221.8m (€249.4m) previously.
Advisers: None mentioned
Renatus Comment: For Ovo, the deal will be transformative, propelling it into the big league of Britain’s energy suppliers. It currently has a market share of 5%, making it the seventh largest supplier, but the deal will see that rise to 18%, just behind British Gas on 19%. All of SSE Energy’s about 8,000 employees will transfer to OVO.
This is one of many gems in the industrial hub that is Little Island. Ireland is well set to win in the automation sector over time with our engineering background and entrepreneurial nature.
Source: Financial Times
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 details of key recent executive and board level appointments
Walkers names four new partners and two of counsel in Ireland
Global law firm Walkers has announced the promotion of Eimear Keane, Ian McNamee, Niall Esler and Paddy Rath to partners in Ireland. Ms Keane has been appointed as a partner in investment funds and Mr Esler has been appointed as a partner in the regulatory and risk advisory team, while Mr McNamee and Mr Rath have both been appointed as partners in the finance team. Caitlin Friel has joined the firm as of counsel in the finance and corporate group and Shane Martin has joined as of counsel in the regulatory group.
LDM Global appoints new Director of its EMEA Operations
LDM Global, an Irish owned global consultancy focusing on eDiscovery, digital forensics, document review and cybersecurity recently announced its expansion in Ireland, along with the appointment of Greg Deane as Director of its EMEA Operations. With more than 15 years’ experience in legal technology and business transformation, Mr Deane has worked in three of Ireland’s top five law firms and has worked on high-profile investigations and disputes across Europe.
Virgin Media Television makes key appointments to commercial team
Virgin Media Television has made a number of key senior appointments to its commercial team. Frankie Carty has been appointed as Head of Agency Business, with responsibility for the strategic leadership, management and development of the agency trading business. Mr Carty joins from Core, where he held the position of Director of Core Investment and he will work closely with Gavan Byrne, the broadcaster’s Head of Trading. Another key appointment sees Tara Moran taking on the role of Head of Partnerships and Digital Innovation, with responsibility for traditional non-spot business and new commercial opportunities including third party partnerships across linear and digital. She joins from Maximum Media, where she held the position of Head of Brand Partnerships. Hugh Quigley has been appointed as Head of VOD Development with responsibility for the strategic leadership and development of on-demand commercial opportunities across the broadcaster’s player platforms. Prior to this, he was Digital Sales Manager with Virgin Media Solutions. Eoghan McGonagle has been promoted to Head of Sales Operations and Performance, leading the sales reporting and operations functions, including the technical delivery of addressable advertising on the Virgin Media platform.
Ian Flanagan Appointed Munster Rugby CEO
Munster Rugby and the IRFU announced that Ian Flanagan has been appointed to the position of Munster Rugby CEO, and will take up the post in mid-October. Mr Flanagan joins the province from Treble Group, where he has held the position of Global Head of Football since 2016. Prior to that, he was Commercial Director with Leicester City Football Club for four years, developing the club’s commercial interests on a global scale. Mr Flanagan has over 20 years’ experience working in senior roles across the sporting industry.
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 Carlow, Daniel Whelan Engineering Works Limited is a manufacturer and supplier of architectural steelwork, waste and material handling and agricultural products. The company also offers fencing solutions nationwide. In March 2018, the company opened new offices in both Cork and Galway to assist with the growth of its fencing and waste and materials handling divisions. In its most recent financial year, revenue was down 12.8% to c. €6.6m although EBITDA increased by 16.0% to c. €1.3m. The increase in EBITDA was largely due to the well managed cost of sales during the year. The company employed on average 67 people in FY18 at a cost of c. €2.1m. There was a net cash increase of c. €1.4m during the year bringing the total cash balance up to c. €4.1m at year end. Growth in cash is attributable to strong operating profit and a significant improvement in its working capital position during the year, freeing up c. €640k in cash. During FY18, the business also made investments in new motor vehicles at a cost of c. €105k as well as the purchase of an unlisted investment worth c. €500k. Net assets for the year stood at c. €8.8m, up from c. €7.7m the previous year. The company is wholly owned by the Whelan family.
Based in Dublin, Paddywagon Limited trades as Paddywagon Tours and is in the tourism sector offering a range of touring options around Ireland as well as accommodation. Paddywagon Tours started in 1998 and has since grown to become the nation’s leading tour operator. In its most recent financial year, the company saw an increase in revenue of 9.9% to c. €12.4m, although there was a slight decrease in EBITDA of 5.4% to c. €1.8m, down from c. €1.9m the previous year. Higher cost of sales and administration expenses lowered EBITDA in the year. After capex, cash balances grew by c. €73k to €2.2m at year end. Debt (finance leases and hire purchase contracts) stood at c. €2.1m. The company is 100% owned by Cathal O’Connell.
Belfast-based S.E.R.E. Holdings Limited, which trades as Sere Motors, is a car dealership that specialises in the sale of both new and used cars as well as servicing and bodyshop services. In its most recent financial year, the company experienced revenue growth of 8.1% to c. £52.5m while EBITDA was down 1.7% to c. £1.3m. The company employed on average 110 employees at a cost of c. £3.3m in FY18. The business added c. £28k to its cash reserves during the year – after new investments of c. £1.2m (majority coming from the addition of land and property). Cash in hand on the balance sheet at year end was c. £202k while there was a bank overdraft of c. £992k leaving a negative net cash balance for the year at c. £790k. Net assets stood at c. £5.0m, up 19.9% from c. £4.1m the previous year. The company is owned equally by Mr Stanley Edgar and Mrs Rosemary Edgar.
Who: Irish sawmiller Glennon Brothers to invest in its Scottish mill.
What: €15m is to be invested at its Scottish plant this year.
Why: The money will be spent on new equipment that will lift production by an extra 40,000sq m at the Troon mill.
Source: Irish Times
Who: Irish frozen food company Strong Roots, founded by Sam Dennigan, has raised funding.
What: The company raised $18.3m (€16.5m) in a fundraising led by New York private equity firm Goods Partners LLC.
Why: The investment will be used for global expansion.
Source: Irish Times
Who: BLK Box fitness, a Northern Ireland gym equipment firm, has secured investment.
What: £1.4m (€1.57m) has been backed by Danske Bank.
Why: The funding will be used for business expansion, recruitment and investing in new machinery.
Source: Belfast Telegraph
Who: Dublin medtech startup CroíValve, a developer of a heart valve implant called Tricuspid Coaptation Valve, has raised an additional funding.
What: €4m funds come in the form of €2.5m from the EU’s Horizon 2020 programme and €1.5m from Broadview Ventures, a Boston firm that specialises in investing in cardiovascular treatments, and existing backers Halo Business Angel Network, Atlantic Bridge University Fund and SOS Ventures.
Why: The funds will be invested in carrying out its first early trials using humans.
Source: Fora
Instead of ‘Thought for the Week’, we are bringing you a weekly tracker using odds from oddschecker and taking off bookmakers margin to come up with deemed percentage probability of outcomes.
The current markets read as follows:
Last week had major shifts and this week just had pronounced positions where there “favourite” outcomes hardened
Some Sort of Brexit by Christmas – 38% chance (31% last week )
No deal Brexit – 18.5% chance (21% last week)
Odds of What the Next Step Will Be:
Article 51 Extended beyond October 31st – 59% (from 50%)
UK leave with a revised agreement 17% (from 7%)
General Election – 11% (from 31% last week)
Exit Without an Agreement- i.e. no deal Brexit – 9% (from 6.5% last week)
All other next steps are sub 5% deemed probability.
If you are not in agreement with any of above you can get the odds here and back your opinion: Oddschecker – Brexit
The number of Foreign Direct Investments (FDI) visits to Ireland in the first 6 months of the year. Dublin attracted 39% of visits so far this year compared to 44% over the full year in 2018, perhaps showing a decrease in the concentration of FDI in Dublin. @IndoBusiness
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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