Renatus Weekly M&A & Company Performance Newsletter 16/05/2021

Deal Details: Bain Capital Private Equity announced that it has signed a definitive agreement with CapVest to acquire Valeo Foods Group (“Valeo”).

​​​​​​The deal completion is subject to regulatory approval.

Valeo is a leading producer and innovator of high quality, category-defining branded and private-label food products.
Headquartered in Dublin, Valeo was founded in 2010 and employs more than 4,000 employees across Ireland, Britain, Italy, the Czech Republic, the Netherlands and Germany.

Bain Capital is an American private investment firm based in Boston, Massachusetts. It specializes in private equity, venture capital, credit, public equity, impact investing, life sciences, and real estate.

CapVest is a leading international private equity investor that partners with ambitious companies that supply essential goods and services.

Advisers:
Bain:​​​​​
Credit Suisse and Houlihan Lokey (financials), Weil Gotshal & Manges (legal), PWC (financial due diligence, tax and structuring service), OC&C (commercial and strategy due diligence services), and Alix Partners (operations and IT due diligence services).

CapVest and Valeo Foods management:
Goldman Sachs (financials), Willkie Farr & Gallagher (legals), KPMG (financial due diligence services), EY-Parthenon (commercial due diligence services), and PWC (tax due diligence and structuring services).

DLA acted for management, led by Corporate partners Eanna Mellet and Tim Wrigh and assisted by Steve Duggan (senior associate) and Blayre McBride (associate).

Renatus Comment: Fruitfield Foods was founded in 2002 with the Lioncourt backed MBI of Nestlé’s ambient food business in Ireland. Jacobs Biscuits was subsequently acquired from Groupe Danone in 2004, and the Jacob Fruitfield Food Group was formed.

UK-based private equity firm, Capvest, acquired and merged Batchelors and Origin Foods in 2010. They subsequently acquired Jacob Fruitfield and formed a combined group called Valeo Foods. Capvest reportedly bought out Origin’s 32% stake in the business in 2015 in a deal worth about €87m. The Company has completed 18 acquisitions since its foundation. Capvest reported that sales increased from €200m to €1.1bn since they invested.

The reported value of the transaction is over €1.7bn, based on an earnings multiple of 10 times its current reported EBITDA run rate of €170 million.

Capvest was founded in 1999 by Cavan man Seamus Fitzpatrick and his American partner Rand Shure. Valeo is an excellent case study of how an ambitious management team can build a business of scale through organic growth and a buy and built strategy with support from a private equity partner. We expect to see Valeo continue its global M&A strategy with their new partner.

Source: Bain Capital

Deal Details:  United Drug Chemical Company (UDG) is to be acquired by US private equity giant Clayton, Dubilier & Rice (CD&R) in a deal reportly worth £2.6bn (€3.15bn).

The takeover deal is subject to shareholder and High Court approval, as well as clearance from competition authorities in Austria, Germany, Russia and the United States.

UDG was founded in 1984 in Ballina, Co. Mayo as a co-operative controlled by a group of pharmacists to secure a reliable supply of medicines. It is now concentrated on two businesses: Ashfield and Sharp Packaging.

Based in Dublin’s Citywest, UDG employs around 9,000 people in 29 countries.

NY-based CD&R has been very active in recent years in deals across the pharmaceutical services, healthcare services and medical technologies sectors.

Advisers: UDG’s main financial advisers on the deal were Goldman Sachs and Rothschild, with Davy. Citigroup advised CD&R.

Renatus Comment: UDG listed on the Irish Stock Exchange in 1999. UDG moved its primary listing from the Irish Stock Exchange to the London Stock Exchange in 2012. In 2015, UDG sold its Irish distribution business to McKesson Corporation for €408m.

It was reported that Liam Fitzgerald advised CD&R on the proposed acquisition. Fitzgerald was at the helm of UDG for much of its evolution and major transactions between 2000 and 2016.

This transaction follows a number of other high profile take privates in the Irish market including Blackstone’s acquisition of Applegreen, Outsourcing’s acquisition of CPL, the Gallagher family taking Abbey private and Henderson Park’s acquisition of Green Reit. International buyers recognise the value of Irish companies and their ability to perform internationally. One would question what is next with companies like FBD, ICG, Origin Enterprises and others trading at reasonable valuations.

Source: Irish Times

Taxamo, founded 10 years ago, built a single platform to support indirect tax compliance, with a focus on online sales, payments, and e-invoicing. Among its customers are SurveyMonkey, Udemy, Ubisfot and Shutterstock.

Vertex provides cloud-based and on-premise solutions that can be tailored to specific industries for every major line of indirect tax, including sales and consumer use, value added and payroll.

Advisers: A Goodbody team comprising Don Harrington, Xiao Wang & Alexandra Assaf-Booth supported Taxamo with Corporate Finance advised, while Maples’ Colm Rafferty and Morgan Pierse acted on the legals.

A cross-departmental Matheson team, led by Corporate M&A partner Brian McCloskey and senior associates James O’Higgins, Robert Maloney Derham and Cíara Garahy, advised Vertex Inc.

Renatus Comment: Taxamo is led by John McCarthy. John is also an executive director of Fexco, who are in the process of selling Goodbody Stockbrokers to AIB and invested €21m in a research development and innovation facility in Kerry in 2020.

The company last year agreed a multimillion-euro deal with Deloitte for a new digital tax compliance service, in what Mr McCarthy described at the time was a “game-changer” for Taxamo

Ireland is developing a strong track record of successful fintech companies led by the Collison brother in Stripe. Other recent successes include Immedis’ recent €50m raise, EML acquisition of Prepaid Financial Services and Sentenial and Terry Clune’s TransferMate.

Source: Vertex

Deal Details: ​​​​​​Orpea, the French nursing home group, has agreed to acquire the FirstCare collection of nursing homes from businessman Mervyn Smith in a deal reported to be worth more than €100m.

The deal is subject to regulatory approval.

The six FirstCare nursing homes located in Dublin, Co Wicklow and Co Kildare have 552 beds in total.

This deal follows Orpea’s purchase of Michael Fetherstons’ TLC Group, comprising of 5 homes and 674 beds, in March 2020 and acquisition of the remaining 50% of Brindley in April 21.

Advisers: Mason Hayes & Curran team advised Orpea, with Robert Dickson leading on the Corporate side, assisted by Eimear Lyons (Senior Associate) and Nessa McHugh (Associate); and Vanessa Byrne leading on the Real Estate side assisted by Ailbhe Cunningham (Senior Associate).

Deloitte also acted for Orpea – Shane Wallace and Nora Cosgrove on tax.

Whitney Moore team, led by Therese Rochford with Roisin Caulfield and Robert Carroll, acted for the sellers on the Corporate side.

Owen O’Sullivan advised the seller on real estate legal matters.

Renatus Comment:  It was reported that 4 of the 6 properties FirstCare operate were sold to Promonial Reim in 2017 and leased back to FirstCare.

The FirstCare deal will make Orpea one of the biggest care home operators in Ireland, if the deal is approved by the CCPC.

This is the 7th nursing home deal we have covered in our newsletter so far in 2021.

Source: Irish Times

Deal Details:  CWSI, a mobile and cloud security specialist, has acquired AVR International in a deal reportedly worth €5.2m.

Headquartered in Dublin, CWSI provides mobility and security solutions to enterprise and government clients both directly and through partnerships with global telecommunications providers including Telefonica, Telstra and Hutchison Whampoa (Three).

AVR, established in 2002 in Berkshire, provides a complementary range of cybersecurity, mobile device management, unified endpoint management, cloud security and professional services through its highly accredited and experienced team. AVR founder and CEO, Helen Hall, and all AVR employees, will join the CWSI Group.

Advisers:  ​​​​​​KPMG Corporate Finance team including Niall Flood and MJ Murphy advised CWSI on growth funding/acquisition of AVR.

Daragh Bohan and Eoin Lee of OBH provided legal advice to CWSI and Mary Coffey of Amoss acted for the lender.

Anna Scally and Amy O’Tooly of KPMG provided tax advice to CWSI and diligence services to the lender were provided by Gavin Sheehan and Gavin Hillery.

Renatus Comment: This is CWSI’s first acquisition and should provide additional scale in the UK market and act as an entry point into other markets across Europe using AVR’s international customer base and further strategic acquisitions.

CWSI was set up by Ronan Murphy, Philip Harrison and Conor Headon in 2010 and raised €2.3m from the Davy EIIS fund and private investors in 2019. CWSI specialises in providing solutions to companies to manage mobile devices. As most of us are working remotely, our mobiles and iPads have become increasing important in our day to day life with access to key information readily available on the move. Managing these devices and protecting information is critical for companies as cyber-attacks are becoming more frequent and expensive.

Source: CWSI Press Release

Deal Details: intive, a global digital powerhouse, has announced its acquisition of Irish tech company Ammeon. The deal consideration was not disclosed.

Ammeon, founded in Dublin in 2003, is a specialist in DevOps, cloud, automation, digital transformation and agile software development. It has built a strong record of successfully delivered solutions to the biggest Fortune 500 companies globally.

Munich-headquartered intive is a digital transformation business that works woth some of the world’s largest companies such as Audi, BASF, BMW, Credit Suisse, Discovery, Disney, Esprit, Facebook, Google, ING, ViacomCBS and Vorwerk.

Advisers: None Mentioned

Renatus Comment: Ammeon was founded in 2003 and prior to the transaction was majority owned by Joe Cunningham, Gilbert Little and Larry Quinn. Ammeon will continue to operate as a separate business unit.

As companies continue to invest in systems and software, Ammeon is well placed to assist companies deliver these projects as the need for successful digital transformation is at an all-time high.

Source: Ammeon

Deal Details: Linnaeus, part of Mars Petcare, has acquired MyVet Group.

MyVet Group consists of three clinics in Firshouse, Lucan and Maynooth.

Linnaeus was acquired by Mars Petcare in 2018 and operates c. 180 sites across UK and Ireland.

Advisers: Deloitte’s M&A and tax teams advised the shareholders of MyVet Group.

Gareth Cosgrove of Grant Thornton Dublin was the financial adviser to Linnaeus.

Renatus Comment: The petcare industry has received a lot of attention from strategic and financial investors recently. The humanisation of pets is resulting in pet owners treating pets like members of their family and they are willing to spend more of their discretionary income on petcare products and services. MyVet is likely to benefit from this humanisation of pets and the increasing popularity of pet insurance.

Source: Deloitte

Deal Details: OneLook Systems, an Ireland-based enterprise safety and risk management software solution provider, has been acquired by VelocityEHS for an undisclosed amount.

OneLook Systems is a world leading provider of Permit To Work and Contractor Management software.

Under the acquisition agreement, OneLook Systems will operate as a wholly owned subsidiary of VelocityEHS from their current office location in Cork, Ireland.

Based in Chicago, Velocity EHS is backed by CVC Capital Partners and  delivers comprehensive cloud-based environmental, health and safety (EHS) software to over 19,000 customers and 10 million users worldwide.

Advisers: Clearwater International (John Sheridan, John Curtin and John Devine) advised OneLook Systems on its sale to VelocityEHS.
ReganWall Partners Adrian Wall and Adam Griffiths, supported by Neil Nolan (Associate) and Hannah Kenny, acted as lead legal advisers on the sale of OneLook Systems.

Renatus Comment: Prior to the transaction, OneLook was majority owned by Brendan Griffin and Pat King.

It is great to see another Irish SaaS company serve a truly global market and deliver solutions for blue chip clients such as GSK, Google and Nestle. Given VelocityEHS reported 19,000 worldwide customers, there may be a strong case to roll out OneLook’s capabilities across this base in the coming years.

Source: VelocityEHS Press Release

Deal Details: Twins Mick and Ciarán Crean, have completed a partial MBO on online retailer Micksgarage, and have almost doubled their stake in the business to 75%.

Since establishing the business in 2004, the business has been backed by several high-profile corporate investors.

The MBO opportunity arose after the Harcourt Venture Fund LP (Investec Ventures), from which the brothers had raised €1.5m in 2016, reportedly informed the pair last August that it planned to sell its stake.

The Creans decided to buy it themselves and engaged corporate financier Conor Sheahan of CKS Finance to help them look at finance options. In addition to Investec, AIB Seed Capital Fund (first institutional investor alongside Dublin BIC) and Paddy Power co-founder, Stewart Kenny, chose to exit. Several high-profile investors led by former Paddy Power Betfair chief executive Breon Corcoran will remain shareholders. Others include Patrick Kennedy, builder Michael Stanley and former Grafton chairman Michael Chadwick.

Advisers: Conor Sheahan of CKS Finance acted for Mick and Ciarán Crean.

Renatus Comment: Micksgarage has really established a dominant market position in Ireland’s B2C market and is pursuing a strategy of up-selling different goods to the same audience rather than going for mass geographic expansion in the B2C car parts market.

Micksgarage’s diversification from car parts and accessories in recent years is likely to have yielded significant award during the pandemic as outdoor furniture and leisure goods have never been in such high demand.

Source: Irish Times

Deal Details: The Chris Mee Group has announced the acquisition of Emergency Response Training from John Lynch. Support for the deal was provided by its strategic investor, Erisbeg. The deal consideration was not disclosed.

CMSE Training is a leading provider of Emergency Response Team (ERT) training for Industrial Fire Crews for over ten years.

Advisers: Adrian Wall of ReganWall acted for Chris Mee Group

Renatus Comment: The training market is highly fragmented with a large number of small operators in the space. We expect to see more consolidation.

Source: Liba.ie

Deal Details:  Alcuin Capital Partners announced their investment in SF Engineering.

SF Engineering is a specialist engineering business that designs, installs and integrates full food processing and packaging lines for meat, fish, dairy and meat alternative food products.

Alcuin Capital Partners specialises in making growth capital investments and supporting management buy-outs in lower-middle market companies based in the UK&I.

Advisers: KPMG (David O’Kelly, Siobhan Donlevy and David O’Sullivan) provided Corporate Finance advice to SF Engineering

Gerry Halpenny in LK Shields advised on the legals

Renatus Comment: SF was founded in 1982 and is based in County Sligo (Ireland) and Cambridgeshire (UK). Prior to the transaction the business was majority owned by Seamus Farrell. The most recent accounts for Skellville Enterprises Ltd show revenue of €19.7m for the year ended 31 December 2019.

Source: Alcuin website

Deal Details:  Zetland Capital, a London-based fund manager, has bought the Morrison hotel in Dublin from Elena Baturina. Zetland agreed to acquire the 145-bedroom property for close to €68 million.

Elena Baturina, bought the property from Nama for €22 million in 2012.

Advisers: None Mentioned

Renatus Comment: This is the second significant hotel deal of the year with Moxy’s sale to MHL reported last week. As the economy continues to reopen, a strong recovery in the hospitality sector is expected which should drive further M&A activity.

Source: The Sunday Times

Deal Details: Glantus announced its successful flotation and admission to the AIM market of the London Stock Exchange under the ticker “GLAN”.

Glantus is an enterprise software provider specialising in automation and analytics for the accounts payable market.

The company has successfully raised £10m (€11.61m) through an oversubscribed placing of New Ordinary Shares with investors. On admission, Glantus’ market capitalization will be approximately £37m.

Advisers: Mazars acted as Reporting Accountant to Glantus on the IPO. The Mazars teams were led by Mark Mulcahy (Long-Form, Working Capital, FPPP), Lorcan Colclough (Short-Form, Technical Accounting), and Gerry Vahey (Long-Form taxation, taxation advisory), with support from Mazars teams in the UK and US.

Renatus Comment: Glantus is reportedly the first Irish Company to list on a major exchange in Ireland or the UK in over two years. This is the third business Maurice Healy has brought to the market (other two being ITG and Calyx). The listing should give Glantus the firepower to help them build and scale.

Source: Glantus and The Sunday Times