Renatus’ Weekly M&A Newsletter – 10/01/2021
January 10, 2021Renatus’ Weekly M&A Newsletter – 24/01/2021
January 24, 2021
Renatus Weekly M&A & Company Performance Newsletter 17/01/2021
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
M&A ACTIVITY
Irish fintech company Carne Group receives growth investment
Deal Details: Carne Group, the digitally driven compliance platform for the asset management industry, has secured a reported €100m investment from Vitruvian Partners.
Carne’s technology platform, CORR (Compliance Oversight Risk & Reporting), helps asset managers to fulfil their compliance, risk and operational requirements with greater accuracy, efficiency and effectiveness through automated data acquisition, analysis, and real-time reporting. The business is led by its founder and CEO John Donohoe and chaired by John Herlihy, LinkedIn’s top exec in Europe.
The investment will be used to expand Carne’s client-led technology solutions and will see Vitruvian Partners take a minority stake in the business.
Advisers: Carne was advised by Stephens Europe, Deloitte, and Matheson in the transaction.
Vitruvian Partners was advised by KPMG Ireland Corporate Finance, EY, PwC, Oliver Wyman, and Dickson Minto.
Stephen Byrne was the lead partner for the deal for Vitruvian, who is son of one Ireland’s most respected corporate financiers, Tom Byrne.
Renatus Comment: This investment will reportedly value Carne at c. €400m. Carne was founded by Group CEO John Donohoe in 2004 and has grown to become the largest third party fund management company in the world with AuM and commitments of over $170Bn, according to Carne’s website. This is an incredible feat and a true Irish business success story.
Source: Carne Group, Irish Times
Principal Logistics acquires Dublin-based Brentech Data Systems
Deal Details: Warehouse and supply chain management software specialist, Principal Logistics Technologies continues to bolster its growth plans with the acquisition of Brentech Data Systems. The acquisition, completed in December and will deepen Principal’s expertise in bespoke software technology for the global healthcare supply chain sector.
As part of the transaction, Principal Logistics Technologies purchased the entire share capital of Brentech Data Systems which includes its intellectual property rights.
Brentech Data Systems, founded in 1990 by John Brennan, is a leading provider of Distribution, Supply Chain Management (SCM) and Enterprise Resource Planning (ERP) software and support to wholesalers and distributors of various sectors across the globe.
Founded in 1993, Principal Logistics is majority owned by CEO Peter Flanagan.
Advisers: The Duff & Phelps corporate finance team led by Luke Mooney and supported by Anthony Carroll, Sandra Deane and Aiden McGroarty acted as Financial Advisor to Principal providing buyside, capital raise and financial due diligence services for the transaction.
The Dillon Eustace multi-disciplinary legal team was led by Lorcan Tiernan head of Corporate M&A, supported by M&A Associate Owen Brayden, David Lawless Head of Tax, Conor Keaveny, partner Banking and Capital Markets and Banking Associate, Shona Hughes.
Tax advice was provided by Bernard Doherty of Grant Thornton. Financing was provided by The Firmament Group and Harwood Private Capital.
Renatus Comment: Software managing the supply chain process for stakeholders has always been essential, a fact newly highlighted by the global Covid pandemic. Logistics providers and last-mile delivery services have witnessed increased volumes which have necessitated demand for efficient and hi-tech supply chain management offerings which the likes of Principal Logistics Technologies provide. Principal is a mission-critical partner to its high profile customers across warehousing, logistics & manufacturing just as Brentech is to its blue-chip clients in the pharma and healthcare supply chain sector. Prior to the acquisition Principal bolstered its management structure with a number of key appointments and so further corporate activity can be expected in the medium term.
Source: Dillon Eustace
Dortek completes MBO
Deal Details: Senior management of Dortek Ltd has completed a management buyout of the business.
Alan O’Keane, David Kerrigan and three Directors in the MBO team acquired the shareholding of Phons O’Mara and family and Tony Fenton. In its financial year to March 2019, Dortek Ltd reported revenue of c. €21.5m and EBITDA of c. €1.6m, per filed accounts.
Dortek Ltd is a Wicklow based manufacturer and installer of hygienic and other door systems working in Europe, the US and Asia.
DunPort supported the deal with debt funding.
Advisers: The KPMG team of Niall Flood, Eoin Fitzpatrick and David O’Kelly provided advice management on the MBO.
McCann Fitzgerald’s Aidan Gleeson, Niamh O’Reilly and Tom Dane, provided legal advice to DunPort while LK Shields’ Gerry Halpenny and Simon Mahon provided legal advice to the MBO team.
Renatus Comment: Based out of a manufacturing facility in Wicklow, Dortek manufacture a range of high-end doors for industrial settings for a global customer base. While offshoring of manufacturing to lower cost base economies has been a trend of the past number of decades, this is a great example of how an Irish company engaging in true value-add, high-end manufacturing can still compete and win market share globally.
Management stepping into the ownership role can be a catalyst for growth and we look forward to following Dortek’s story during the next phase of its growth.
Source: Dunport
Valeo Foods acquires German confectionary group
Deal Details: Valeo Foods Group has acquired Schluckwerder, a specialist producer of confectionery products in Germany and around the world, from German mid-market private equity firm Novum Capital.
Founded in 1956, Schluckwerder operates three production facilities in northern Germany. Retailers including Lidl, Aldi and Netto form a core part of its business. More than 25% of its products are sold outside Germany.
Valeo Foods is an Irish multinational producer of branded food and beverage products. The company has a portfolio of over 50 international food brands which are sold across 90 countries globally, including Rowse Honey, Odlums, Batchelors, Jacob’s, Balconi, and Kelkin.
Advisers: None mentioned.
Renatus Comment: This is Valeo’s the second announced acquisition in less than a month, and its 18th since the company was founded 11 years ago. Originally formed through the CapVest backed merger of Bachelors and Origin Foods (Shamrock food brands), the growth and success of Valeo Foods is a story about the value that strategic acquisitions can create. In a sector, where growth tends to track GDP, Valeo has created a €1.2m revenue group through a succession of well-executed acquisitions targeting heritage brand leaders. Its products are consumed in 106 countries around the world.
Source: Irish Independent
MyClinic.ie is acquired by European telehealth firm
Deal Details: MyClinic.ie has been acquired by European telehealth firm HealthHero for an undisclosed sum.
Founded in Dublin by doctors Daniel Clear, James Ryan, and Terry Deeney, MyClinic’s services include online repeat prescriptions, mental health, physiotherapy and wellbeing products, as well as video consultations with healthcare professionals ranging from GPs, therapists, midwives, physiotherapists, and fertility specialists.
Already a major telehealth player in Europe, HealthHero’s services cover 20 million people and 1,000 businesses across Europe.
Advisers: Legal advisers to MyClinic.ie were Paddy O’Shea (Partner), Alan Ryan (Partner) and Caoimhe Ruane (Solicitor) of Wallace Corporate Counsel LLP
Renatus Comment: Health is another sector which Covid has likely changed permanently. With the restrictions placed on routine medical visits usually conducted in person, health professionals and patients have been forced to move to an online medium. Companies, such as MyClinic, which reduce the friction between health professionals and patients are now a necessity and they stand to benefit.
First movers in this space which can capture initial demand will position themselves well into the long term. MyClinic has established a customer base in Ireland and TeleHealth look to be bolting this on to their already sizeable customer base in Europe.
Source: Pharmaphorum.com
Gaeltacht packaging company is acquired by US based manufacturer
Deal Details: R.A. Pacáistí Teo (Rapid Action Packaging – RAP), a Donegal-based packaging company has been acquired by American-based ProAmpac, a manufacturer of flexible plastic and paper packaging solutions.
RAP, which is an Údarás na Gaeltachta client company, currently employs 200 people at its manufacturing facility in the Donegal Gaeltacht, as well as another 40 people in London.
Following the acquisition, RAP will join the ProAmpac brand and will maintain all its operations at its manufacturing facilities in the Donegal Gaeltacht and in London. No financial consideration has been disclosed.
Advisers: None mentioned
Renatus Comment: ProAmpac will view this acquisition of RAP from Ludgate Investments as a route to expanding its manufacturing capabilities to produce primary packaging for ready-to-eat and freshly prepared foods. R.A. Pacaisti Teoranta reported revenue of c. €31.7m and EBITDA of c. €6.8m in its financial year to September 2019.
Source: Irish Times
Management team of CBRE NI completes MBO
Deal Details: The management team of commercial real estate services firm, CBRE Northern Ireland, has completed a management buyout of the operation from CBRE UK.
CBRE is one of the leading full-service real estate services and investment organisations in the world.
The NI management team, which is led by Brian Lavery, Robert Ditty and Gerard McCann, has arranged an agreed structure which will allow for operational flexibility while retaining its position as an affiliate of CBRE.
Advisers: None mentioned.
Renatus Comment: This move by the CBRE management team to complete a MBO is bucking the trends we are seeing in professional services deal, where the market has recently favoured consolidation, bigger firms buying smaller firms.
Source: Insider Media
EnviroChemie Group acquires Industrial Water Management (IWM)
Deal Details: EnviroChemie Group, headquartered in Germany and a subsidiary of SKion Water GmbH, has acquired Dublin-based Industrial Water Management Ltd. (IWM) for an undisclosed sum.
Founded in 1976, EnviroChemie supplies sustainable system solutions worldwide for all the tasks involved in industrial water treatment and the treatment of process water, circulation water, cooling water, boiler water and wastewater.
IWM specializes in cooling tower, steam boiler and water hygiene services, including legionella control and water chemicals supply. With 30 employees, IWM generates an annual turnover of approximately €3m.
Advisers: DWF Dublin (Ross Little, Head of Corporate) advised the shareholders and management of IWM on the legals, and Derek Dervan (Partner in Roberts Nathan) provided corporate finance and tax advice to the shareholders and management of IWM.
Arthur Cox (Ciaran Bolger and Reem Ka’ati) advised EnviroChemie.
Renatus Comment: The acquisition of IWM will strengthen the mutual competencies in this market segment and expand the range of services available for customers. This transaction will give EnviroChemie a permanent presence in Ireland and give Irish customers the potential to benefit from EnviroChemie’s broad range of products and services as well as local support from IWM. IWM’s optimal access to pharmaceutical customers is also in line with EnviroChemie’s current strategy.
Source: EnviroChemie
DEALS IN THE MAKING
Four banks come together to develop payment app
AIB, Bank of Ireland, Permanent TSB and KBC Bank have teamed up to develop a new payment system that they hope will rival Revolut.
They are coming together to build an app-based instant payment system in a bid to stem the rapid loss of customers to digital disruptors such as Revolut and Apple Pay.
The joint venture has had to be notified to the CCPC in case it infringes competition law.
Source: Irish Times
Ireland’s largest waste company in line for €1bn takeover
It is reported that the largest waste company in the Republic, Beauparc Utilities, has attracted takeover approaches from dozens of private equity firms. This comes after speculation that Blackstone, its minority shareholder, set about putting its stake on the market late last year.
The approaches may result in an outright purchase of the owner of the Panda and Greenstar waste firms for as much as €1 billion. Blackstone acquired a 37.6% in Beauparc two years ago for an undisclosed sum. The remainder of the company is almost entirely in the hands of its founder, Eamon Waters.
Source: Irish Times
EXAMINERSHIPS/RECEIVERSHIPS
Viking Splash Tours is bought out of Liquidation
Viking Splash Tours, the amphibious-vehicle tour of Dublin, which culminates in a trip on the Grand Canal Basin in the docklands, has been bought out of liquidation by Liverpool City Sights. Great news for the Philip Oliver run business. McStay Luby’s Dublin team (Jim Luby, Stephanie Furey and Maria Zapciu) and David Rubin & Partners UK team (David Rubin and Charlotte Jobling) advised on the deal, so too did Field Fishers Dublin team (Jamie Woodcock, Mark Woodcock and Feilim O’Caoimh).
Source: LinkedIn
COMPANY PERFORMANCE
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
With offices in Dublin, Cork and Galway, ICT services focused PFH Technology Group provides applications, infrastructure, security, communications and managed services solutions to enable companies efficiently and operate with agility.
In its financial year to June 2019, the company reported revenue of c. €87.2m (up 12.8% YoY) and EBITDA of c. €7.5m (up 21.8% YoY). The company’s cash balance at the end of the year stood at €2.7m, a decrease of c. €1.9m from the previous year.
PFH Technology Group employed an average of 306 people during the year at a cost of c. €16.9m.
Power City is one of Ireland’s most recognisable names in electronics distribution.
In its most recent financial year to September 2019, Power City Ltd. recognised revenue of c. €89.1m (up 1.5% YoY) and EBITDA of c. €8.3m (down 1.6% YoY). The business had an ending cash balance of c. €32.7m which represented a decrease of c. €8.9m YoY. Its €12.2m cash outflow for other activities included €10.1m pension fund contribution.
Power CIty Limited is owned by multiple McKenna family members including Dermot, Liam, Aidan, Colin and others. During FY 19, the business employed an average of 255 people at a cost of c. €8.0m.
Burtse Limited is an investment holding company for a group of companies involved in the licencsed vintners trade and the rental of properties. Some of the most notable subsidiaries include The Stag’s Head and Kehoes pub. Multiple Fitzgerald family members own Burtse, including Louis Fitzgerald.
In its financial year to June 2019, Burtse Ltd recognised revenue of c. €71.4m (up 2.1% YoY) and EBITDA of c. €18.9m (up 56.7% YoY). EBITDA outperformance was enabled by a c. €6.7m reduction in administrative expenses YoY. There was an ending cash balance of c. €29.9m against debt of 51.6m.
The group employed an average of 892 people at a cost of c. €18.2m.
RECENT FUNDRAISINGS
Who: CameraMatics, an Internet of Things (IoT)-focused company that has developed technology to enable companies to better manage fleet and driver risk, has secured funding.
What: CameraMatics has raised more than €4 million in a Series A investment round from a stellar consortium of investors led by Puma Private Equity, along with existing investors Sure Valley Ventures and Enterprise Ireland.
Legal advisers were Alan Ryan (Partner) and Michael Bambrick (Associate) of Wallace Corporate Counsel LLP. HMT (UK) acted as Financial advisers.
Why: The funds will be used to support further expansion of the US branch of the business and drive forward the recent entry into the mainland European market. CameraMatics expects to create more than 50 jobs over the next two to three years in Ireland along with other roles in the UK, US and mainland Europe.
Source: CameraMatics
Who: Dublin-headquartered Frankie Health, a start-up that has developed a technology platform aimed at supporting employee mental wellbeing, has raised funding.
What: The company has raised $1.25 million (€1.03 million) in funding. Hong Kong-based E15 VC led the investment and previously provided €250,000 to an earlier incarnation.
Why: The funds will be used to add 20 new employees to its team over the next 12 months with roles across engineering, design and marketing.
Source: Irish Times
Who: Bleeper, formerly known as Bleeperbike, has raised funding.
What: Bleeper has raised close to €600,000 through the Davy EIIS fund, a joint venture between accounting firm BDO and stockbroker Davy. It brings to €1.3m the total funding raised by the company since it was founded by Hugh Cooney in 2016. Other backers include Enterprise Ireland.
Legal advisers to Bleeper Alan Ryan (Partner) and Graham Coyne of Wallace Corporate Counsel LLP
Why: It is assumed the funds will be used to expand their bike fleet and launch e-scooters.
Source: Irish Times
Who: SalesOptimize, a Dublin-based market intelligence company founded in 2015 by Liz Fulham.
What: €2m funding round. Backers include Telefonica, Wayra, Enterprise Ireland and a private investor. This latest round brings SalesOptimize’s total funding to €5m.
Why: Support the continued growth of the business.
Source: Sunday Independent
Who: Manna Aero, an Irish drone delivery startup founded by Bobby Healy.
What: The business has secured backing from Stripe’s John and Patrick Collison. The value of the investment is not reported. Up to the end of last year, the business had raised c. $10m.
Why: Expected to be used for the continued development of the business.
Source: Business Post
Who: Silicon Kingdom, a carbon-capture company founded by former oil industry executive John McKeon. The company plans to build a forest of “mechanical trees” – large fans designed to suck carbon dioxide from the air and store it for alternative later uses.
What: The business has completed a £1m funding round.
Why: Expected to be used for the continued development of the business.
Source: Business Post
Who: FoodMarble, a Irish startup founded by Aonghus Shortt which has built a breath test device and app that help find the foods that are most compatible with your digestive system.
What: The business has completed a €2.1m funding round. Investors include former Ornua boss Kevin Lane, Sean O’Sullivan’s SOSV fund, medical device entrepreneur John O’Dea, as well as Delta and UK fund Breed Reply.
Why: Expected to be used for the continued development of the business.
Source: Sunday Time
EXECUTIVE AND BOARD APPOINTMENTS
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 with details of key recent executive and board level appointments.
THOUGHT FOR THE WEEK
Some light-hearted positivity during a challenging time.
We have heard this quoted twice in the past week, historian James Westfall Thompson 100 years ago compared the aftermath of the 14th century Black Death and the Great War. Both unleashed “frenetic gaiety, wild expenditure, luxury, [and] debauchery”. We are indifferent to the emergence of the latter, but let’s hope for all of us in business that frenetic gaiety and wild expenditure will follow this lockdown!
@RenatusCapital Tweets
€1.2bn
The sum spent on groceries by Irish shoppers in December 2020, a new record, up from €1bn in December 2019. According to @Kantar_UKI . @IndoBusiness
15.7%
The combined increase in the number of new electric and hybrid cars licensed in 2020, accounting for 16,594 cars compared to 14,343 cars in 2019. According to @CSOIreland
-25.6%
The decline in the total number of new cars licensed in Ireland during 2020, a decrease of 29,000 vehicles compared with 2019. According to @CSOIreland
6. 7%
The year-on-year increase of new loan agreements by businesses in Ireland in November 2020, amounting to €1.2bn, showing growth for the first time since Covid began. According to @centralbank_ie . @IndoBusiness
10%
The year-on-year rise of goods imports to Ireland for November 2020, accounting for €8,511m worth of goods, when compared with November 2019. According to @CSOIreland
16.0% & 8.2%
The respective quarterly growth in terms of Gross Value Added for Non-Multinational dominated sectors & MNE sectors as of Q3 2020. According to @CSOIreland
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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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