Renatus Weekly M&A & Company Performance Private Equity Newsletter 15/10/2023

Deal Details: We are delighted to announce that Renatus Capital Partners has acquired a majority stake in the W.H. Scott Group.

W.H. Scott Group is a market leader in the design, fabrication, supply, inspection, and certification of equipment used in highly regulated lifting and industrial markets. It was founded in Belfast in 1897 and is now headquartered in Rathnew, Co. Wicklow, with depots located across Ireland and the UK. The Group serves its customers through four specialised operating entities (W.H. Scott & Son Engineering, Hiltonne, Metlab and Re-Ropes). It is led by Managing Director Patrick Doyle.

This is Renatus’ tenth investment, and its first from its new €60m fund, which is backed by the Ireland Strategic Investment Fund (“ISIF”). The fund is focused on providing supportive equity capital to ambitious SMEs across Ireland and the UK.

Advisers:
Renatus:
Legal: Squire Patton Boggs led by George Kennedy, Mary Brock, Claudia Kilpatrick and Ciara Downes.
Tax Due Diligence: KPMG led by Caoimhe McLoughlin, Claire Waters, Kevin Corcoran and Aoife Kennedy.
Financial Due Diligence: Grant Thornton led by Michael Neary, Stuart Mellon and Adrian McNamee.

W.H. Scott Group:
Legal: Clark Hill led by William Brophy.
Financial Due Diligence: Fitzgeralds, Leinster Lodge, Maynooth, led By Dylan Fitzgerald.

Renatus Comment: Tom Sheils, Investment Manager at Renatus said: “W.H. Scott Group, led by Patrick Doyle, has positioned itself as a market leader in its space by being ambitious, customer-focused, and uncompromising on product and service quality. We have been hugely impressed with the growth (both organic and through M&A) of the business to date under Patrick and the management team’s leadership and are excited by their plans for the future. Renatus is delighted to partner with Patrick to provide both financial and strategic support as the company pursues its global growth ambitions.”

Source: Renatus Press Release

Deal Details: Powerscourt has been acquired by Morrow Sodali. The deal is reported to be worth up to £50m.

Powerscourt is a PR and communications business with offices in Dublin and London. It also offers political advice, crisis management and consulting services on ESG issues. The business was founded in 2004 by former Sunday Times journalist Rory Godson which he owns alongside his wife Hilary Godson. The business employs 75 people. Its major clients include Airbus, DAR Global, Brewdog and ASDA. In FY Dec’22, the business reported turnover of c. £12.7m which converted to an EBITDA of c. £3.1m.

Morrow Sodali is a New York-based middle market and growth equity platform. It is majority-owned by TPG Growth, a global alternative asset management firm with $139 billion of assets under management. It employs c. 500 people across its 14 international offices.

Advisers:
Powerscourt: 
Deal advisory: SI Partners Global

Morrow Sodali:
None mentioned.

Renatus Comment: We continue to see communication services businesses become more popular with acquirers given the recurring nature of their revenue and their capital and labour-light business model. This was evidenced by Penta’s acquisition of Hume Brophy earlier this year. Rory Godson’s LinkedIn article about this deal is a must-read for any CEO or entrepreneur. You can read it here. It encapsulates everything an entrepreneur goes through from inception to exit; the start-up with no office, the big break contract, the patient family, the culture and the sheer entrepreneurship required to become something of scale that people want to buy. He also gives an effective scorecard with the things he looked for in a buyer beyond the financials. These were cultural empathy, strategic alignment, immediate revenue synergies, opportunities for the people, more services for the clients and a new challenge for the entrepreneur.

Source: Irish Times

Deal Details: PIB Group has acquired Munstergroup Insurance. Deal consideration was not disclosed.

Munstergroup Insurance is an Ennis-based insurance broker. The business was led by Pádraic McNicholas. In FY Dec’21 it reported turnover of c. €7.1m which converted to EBITDA of c. €3.9m.

PIB Group is a London-based insurance broker that also provides 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 Funds. In FY Dec’22, the business reported turnover of c. £345m which converted to an Adj. EBITDA of c. £91m.

Advisers:
Munstergroup Insurance:
Corporate Finance: PKF O’Connor Leddy & Holmes led by David Lucas and Conor O’Rourke.
Legal: Dentons led by Ciaran O’Boyle and Teodora Puiu.
Tax: Deloitte led by Fergal Cahill and Gerard Finucane.

PIB Group:
Legal: DLA Piper led by Matthew Cole, Maria Hickey, Blayre McBride, Caoimhe Clarkin and Helen O’Connor.
Financial & Tax DD: PwC led by John Casey and David Connolly.

Renatus Comment: PIB Group continues to be among the most active consolidators in the Irish insurance broker space having made over 15 acquisitions in Ireland to date. Recent deals include the acquisition of Dublin-based National Insurance in August, Limerick-based Tim Duggan Insurances in June and Clare-based Gleeson Insurance in May. Even in times of economic downturns insurance brokers remain attractive as asset-light, fee-based businesses that deliver steady revenues.

Source: Independent

Deal Details: Powerpoint Engineering has been acquired by Indutrade. Deal consideration was not disclosed.

Powerpoint Engineering is a Laois-based specialist in electrical safety equipment, training, testing and repairs. The company was founded in 1996 and was owned by Managing Director Liam Davis who leads the business alongside Conor McGarry. The business does not report turnover or EBITDA information.

Indutrade is a Swedish technology and industrial group consisting of more than 200 companies in 30 countries. It is listed on the Nasdaq Stockholm and reported net sales of c. SEK 27bn (c. €2.5bn) in FY Dec’22.

Advisers:
Powerpoint Engineering:
Corporate Finance: Clearwater International led by John Curtin, John Devine and Matthew Fee.
Legal: RDJ led by Bryan McCarthy, Sarah Slevin, Sinead Morgan, April Byrne and Jack Bergin.

Indutrade:
None mentioned.

Renatus Comment: Irish firms involved in the building of the global cloud continue to be sought after by international trade acquirers. Powerpoint Engineering has carved out an impressive niche on that value chain and this deal marks a great result for the business. Industry tailwinds are likely to benefit the business as it embarks on the next phase of its growth journey with Indutrade. The electrical safety market is growing in Ireland due to factors such as increased regulatory requirements, safety awareness, a switch to renewable energy and the building of data centres. Ireland is one of the largest global data centre markets. As of June, there were 82 data centres in operation in the country with several more in the planning and construction phase.

Source: Clearwater International Press Release

Deal Details: OBMG has been acquired by Salute Mission Critical. Deal consideration was not disclosed.

OBMG is an Athlone-based provider of commissioning services for mission-critical facilities such as data centres. It was owned by Michael O’Brien and Gareth McGowan. It does not report turnover or EBITDA information.

Salute Mission Critical is a US-based provider of data centre services. It was founded in 2013 by Lee Kirby and Jason Okroy. The business has over 1,000 employees and serves over 330 client sites.

Advisers:
OBMG:
Legal: BHSM LLP led by Joe McVeigh, Sinéad Mannion and Nadine Cannon.
Corporate Finance: Cantwell Corporate Finance led by Paul Cantwell​​​​​.

Salute Mission Critical:
Legal: DLA Piper led by Eanna Mellett.

Renatus Comment: Irish service providers to data centres and mission-critical infrastructure operators, continue to be in high demand, with this deal following the recent acquisition of RWL Advanced Solutions by Genuine Cable Group. As mentioned in relation to the Powerpoint Engineering deal above, there were 82 data centres in operation in the country as of June this year, with the majority owned by some of the world’s largest multinationals such as Amazon, Google and Facebook. The service provided by these Irish firms is truly world-leading and it is no accident that some of the world’s largest technology companies entrust many of their critical assets to Irish hands.

Source: Salute Mission Critical Press Release

Deal Details: NearForm has acquired Formidable. Deal consideration was not disclosed.

NearForm is a Waterford-based software design business. It was founded in 2011 by Richard Rodger and Cian Ó Maidín and received investment from US-based Columbia Capital in 2020. The business has over 100 employees. In FY Dec’21 it reported turnover of c. €30.1m and EBITDA of c. €3.5m.

Formidable is a Seattle-based software design and engineering consultancy that utilises open-source software. The company has over 150 employees working remotely and from offices across the US and in London. CEO Ryan Roemer will join NearForm’s executive leadership team as part of the deal.

Advisers: None mentioned.

Renatus Comment: NearForm is a low-key Irish software business that is scaling rapidly, having trebled its revenue in the space of three years. It was behind the HSE’s contact tracing app during the pandemic. This acquisition will give the company a presence in the US. The deal was struck up organically when some employees of both companies began discussions, having worked together in e-commerce for Walmart in 2013.

Source: The Currency

Deal Details: Markets Alive Supports Team (‘MAST’) has been acquired by Arachas. Deal consideration was not disclosed.

MAST is a Dublin-based provider of business advice and insurance support for local markets across Ireland. It was established in 2011 and was owned by Ciaran Casey and Alicia O’Reilly. It does not report turnover or EBITDA information.

Arachas is a nationwide insurance broker with over 700 employees across 18 offices within Ireland. In 2020 the company was acquired by Ardonagh Group, a UK insurance broker. In FY Dec’22, the business reported turnover of c. €89.5m which converted to EBITDA of c. €35.6m.

Advisers:
Arachas:
FDD: Mazars led by Mark Mulcahy, Anthony Shiel, and Robbie Graham.
TDD: Mazars led by Gerry Vahey and Nicole Hanlon.

MAST:
None mentioned.

Renatus Comment: Since being acquired by Ardonagh in 2020, Arachas has been among the most active players in the consolidation of the Irish insurance industry. Over the past 12 months, it has completed deals to acquire the likes of D&D Insurances, Glennon Insurances and O’Malley-Griffin (Brokers) DAC. This deal marks an interesting pivot away from targeting general brokerage firms towards the niche of insurance advice for markets and street traders.

Source: Business Plus

Deal Details: EirTrade Aviation Ireland has been acquired by Acorn Growth Comapnies. Deal consideration was not disclosed.

EirTrade Aviation is a global technical asset services and trading company with operations in Dublin and Knock Airport. The business was founded in 2010 and is led and co-owned by Ken Fitzgibbon and Patrick Jordan. The business employs over 75 people with clients including the world’s leading airlines, leasing companies & MRO’s. In FY Dec’22, the business reported turnover of c. €82.8m which converted to an EBITDA of c. €3.7m.

Acorn Growth Companies is a middle-market private equity firm focused on aerospace, defense, intelligence, and space investments. The firm is headquartered in Oklahoma City.

Advisers:
EirTrade Aviation Ireland:
Legal: Philip Lee team led by Bernard McEvoy, Rebecca McEvoy and Olivia Creaven.
Corporate Finance: PwC Corporate Finance led by Mark McEnroe, Rudolf O’Kane, Peter Gleeson and Colum Carr.
Tax: PwC led by Ronan MacNioclais and Katie O’Neill.
​​​
Acorn Growth Companies:
None mentioned.

Renatus Comment: Over the past 50 years, Ireland has become a hub in the world of aviation, specifically when it comes to aircraft leasing with 14 out of 15 of the top leasing companies based here. This has prompted a boom in the aircraft maintenance sector with Aercap reporting that demand for aircraft reached an all-time high in 2022. This has provided lucrative opportunities for Irish businesses providing engine repairs, leasing and airframe refurbishment services. EirTrade will continue to capitalise on this having announced plans to buy older aircraft which they can disassemble to provide parts.

Source: Acorn Growth Companies Press Release

Deal Details: OpenApp has been acquired by IQVIA. Deal consideration was not disclosed.

OpenApp is an Irish health technology firm that specialises in health intelligence and patient registries. The business was founded by the late Mel McIntyre in 2002. Prior to this sale, it was owned by Patricia McIntyre, Con Hennessy, David Creane, Pawel Stawarz and Kevin Gill. It does not report turnover or EBITDA information.

IQVIA Holdings Inc, is a US-based analytics firm focused on the healthcare industry. The company processes over 100 billion healthcare records annually and is listed on the NYSE. In FY Dec’22 it reported turnover of c. $14.4bn which converted to EBITDA of c. $2.6bn.

Advisers: None mentioned.

Renatus Comment: Health intelligence and analytics continues to be an area of focus for healthcare providers and other stakeholders as they seek to leverage the ever-increasing volumes of available data in order to distil insights that may improve patient results. Similar to NearForm mentioned above, one interesting use case for OpenApp’s technology came during the Covid-19 pandemic. It worked with several public sector bodies including the CSO, to provide geo-referenced data in close to real-time. This helped to identify local disease clusters and to filter cases by age group and transmission type. The project was shortlisted for the 2022 Irish Healthcare Awards.

Source: Independent

Deal Details: DataSolutions has been acquired by Climb Global Solutions. Cash consideration was reported to be c. €15.4m.

DataSolutions is a Dublin-based distributor of IT solutions. The company was founded in 1991 and is led by Managing Director Michael O’Hara. Other shareholders included Francis O’Haire, Roberta McCrossan, David Keating, Alan Smyth and Brian Davis. In FY Mar’23 it reported turnover of c. €126m.

Climb Global Solutions Inc. is a provider of IT distribution and cloud technology solutions across Europe, Canada, and the US. The company is listed on the NASDAQ stock exchange.

Advisers:
DataSolutions:
Corporate Finance: KMPG led by David O’Sullivan, Hazel Cryan, Connor Young, Liam Hanley and Owen Hargrove.
Legal: Taylor Wessing led by Paddy Quinlan and Kevin Keenan, Órlaith Molloy, and Sarah Kelly.

Climb Global Solutions.
Legal: Fieldfisher Ireland led by Feilim O’Caoimh and Jamie Woodcock.

Renatus Comment: IT distribution has been a very active space in recent times when it comes to M&A, with the likes of Nostra, PFH and Arkphire all pursuing growth through acquisition. Having previously featured on the Deloitte Fast 50, DataSolutions has grown rapidly over the past four years at a rate of c.30% per annum. Michael O’Hara recently stated that while consumer demand for IT products will likely slow over the coming year, he expects B2B demand to remain resilient if solution providers can deliver cost savings and efficiency gains for customers. Demand for software products in the cloud, digital workspace and cybersecurity space is driven by a large proportion of employees in the technology sector now working remotely.

Source: RTE

Deal Details: MMG Ocean has sold a 25% stake to Ocean Kinetics. Deal consideration was not disclosed.

MMG Ocean, formerly MMG Welding, is a specialist in marine-coded welding and fabrication. The company, based in Donegal, was founded by current managing director Martin McGuinness in 2005 and is equally owned by Martin and Eibhlin McGuinness. The company has 15 employees and does not report turnover or EBITDA information.

Ocean Kinetics is a marine engineering firm established in 1992. It is based in Shetland, with a strategic office in Aberdeen. The business is led by managing director John Henderson. In FY Dec’22 it reported turnover of c. £12.6m which converted to EBITDA of c. £2.2m.

Advisers: None mentioned.

Renatus Comment: This deal follows Ocean Kinetics’ recent acquisition of Scotland-based Hamnavoe Engineering in May 2023. MMG Ocean and Ocean Kinetics previously worked together on multiple projects, most recently the collaboration on a clean energy storage system for the aquaculture sector. This partnership builds on their established relationship and increases the group’s capacity to win new business within the UK, Ireland, and European markets.

Source: Independent

Deal Details: Both the Irish and Luxembourg operations of MJ Hudson have been acquired by Apex Group. Total deal consideration was reported to be c. £40m, of which c. £13m related to the Irish business.

MJ Hudson is an international financial services provider that listed on London’s AIM in 2019. It established a presence in Ireland following the IPO, making several acquisitions in both asset management and consultancy. The proceeds from this deal will be used to repay c. £33.7m to Santander UK and the business will cease trading.

Apex Group is a Bermuda-based financial services provider, established in 2003. It has 94 offices globally and 12,000 employees across 38 countries.

Advisers: None mentioned.​​​​​

Renatus Comment: MJ Hudson previously acquired several Irish businesses including Dublin-based provider of specialist support services, Bridge Group in 2020. It was announced that the company would become a “cash shell” following this deal as it repays its lenders. In January, Apex Group acquired the Irish depository business of Bank of America, and announced in May that it is opening a new office in Limerick.

Source: Independent

Deal Details: Treaty United FC has been acquired by Ciara McCormack in partnership with Tricor Pacific Capital Inc. Deal consideration was not disclosed.

Treaty United FC is a Limerick-based football club that plays in the League of Ireland First Division. The club was founded in 2020. It has a 4,500 capacity stadium with average attendances this season of c. 700 people. Treaty United FC does not report turnover or EBITDA information.

Tricor Pacific Capital Inc is a Canadian investment firm headquartered in Vancouver. New Chief Executive and co-owner Ciara McCormack is a former Republic of Ireland women’s international and current Treaty United FC player. She is set to become the first female CEO in the League of Ireland.

Advisers: None mentioned.

Renatus Comment: The League of Ireland has attracted significant investment in the last two years with Shelbourne, Drogheda, Dundalk and Cork City all having taken on new investors. Such investment is essential for these clubs with the league having a history of financial struggles. This deal also comes following the announcement of the UK and Ireland’s successful bid to host Euro 2028. It is hoped that co-hosting this tournament will have the knock-on effect of increased investment in facilities and stadia across the country with attendances for the domestic game up 23% on last year according to reports released in June.

Source: Treaty United Press Release

Deal Details: NPP Packaging Sytems (‘NPP’) has acquired Wraptite Packaging. Deal consideration was not disclosed.

NPP is a Dublin-based supplier of packaging equipment and materials for the food, agricultural and pharmaceutical sectors. The company is led by Managing Director David Duffy following an MBO in 2008. In FY Dec’21 NPP reported turnover of c. €51.3m which converted to EBITDA of c. €5.1m.

Wraptite, based in Dublin, is a provider of industrial packaging supplies. The company is owned by Jeff Dunne and Paul Smith and was formed in 2001. It does not report turnover or EBITDA information.

Advisers: None mentioned.

Renatus Comment: NPP has grown both organically and through acquisition since the MBO of the business in 2008. This deal follows the acquisition of Dublin-based Food Processing Technology in June this year and Asgaard Packaging in 2019. It also completed a merger with its sister company Combind in recent months. NPP expanded its facilities in 2020, relocating to a custom-built location in Dublin and was also named as one of Ireland’s Best Managed Companies 2023 by Deloitte.

Source: Business Plus

Deal Details: Lonsdale Capital Partners has led an investment into GIA with a group of investors including Dublin-based Abbey International Finance. Deal consideration was not disclosed.

Lonsdale Capital Partners is a private equity firm that was co-founded in 2010 by Dubliner Ross Finegan  and UK executive David Gasparro. The company makes majority and minority investments in companies across the UK and Europe.

​​​​​​Abbey International Finance is a niche finance firm based in Dublin. It offers services including leasing, private equity and insurance. The business is led by CEO Gerry Clifford.

GIA is a UK-based property consultancy with offices in London, Manchester, Belfast, Dublin and Bristol. It was founded by Gordon Ingram in 1993 and is led by CEO Sam Wallis. The business does not report turnover or EBITDA information.

Advisers: None mentioned.

Renatus Comment: GIA’s proprietary app ‘Phoenix’ allows for complex analysis of sunlight and overshadowing to be undertaken quickly. The company has worked on some of the UK’s most distinctive buildings including 20 Fenchurch Street known as “The Walkie-Talkie” and The Leadenhall Building known as “The Cheesegrater”. In densely populated urban areas with tall building profiles, such as in London, disturbance due to lighting and shadows are among the most common objections throughout the planning process.  GIA has successfully leveraged technology in the analysis of these challenges to deliver both time and cost savings to developers.

Source: Lonsdale Capital Partners Press Release

Kingspan has offered $242.6m for Nordic Waterproofing shares

Deal Details: Kingspan has confirmed that it has made a mandatory cash offer of $242.6m for the remaining shares in Nordic Waterproofing. Kingspan already owns 30.9% of the Swedish business which is one of Europe’s leading producers and suppliers of waterproofing products and services. The offer values Nordic Waterproofing at c. €330m, with the deal expected to close on February 1st.

Source: Irish Times

Park House Hotel is a hotel and restaurant located on Forster St. in Galway. The business is owned by Eamon Doyle and Kitty Carr.

In its financial year to December 2022 the business generated a turnover of c. €9.0m, an increase of 91.1% year-on-year. This converted to c. €1.5m EBITDA, an increase of c. €1.4m year-on-year. The increase in EBITDA was driven by gross margin improvement from 32.8% to 47.7% combined with improved trading conditions following a rebound in hospitality from the Covid-19 pandemic.

The business finished the year with a cash balance of c. €2.4m, a c. €0.9m increase on FY Dec’21. The most significant post-EBITDA cash movement was the repayment of borrowings.

The business employed an average of 109 people over the period at a total cost of c. €4.2m