Xtremepush receives investment from Grafton Capital, C&R receives strategic investment, Irish Life to acquire Ark Life, Cork Plastics is acquired by Wienerberger and much more in this weeks Renatus Private Equity weekly M&A newsletter.
Renatus Weekly M&A & Company Performance Private Equity Newsletter 18/07/2021
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
Xtremepush receives investment from Grafton Capital
Deal Details: Xtremepush has raised $33m (€27.8m) in funding from Grafton Capital, a London-based growth investor in European technology companies. Grafton Capital will own a minority stake in the company.
Xtremepush Limited develops and provides multi-channel analytics and engagement marketing platform. The company’s platform enables users to analyze, segment, and target their web and mobile application customers. Xtremepush is headquartered in Dublin and led by CEO and co-founder Tommy Kearns as well as CTO and co-founder Kevin Collins.
Advisers: FinRes acted for Xtremepush
Renatus Comment: Last year, Xtremepush raised €4.25m in debt funding from Beechbrook Capital. The company has ambitious growth plans and is targeting a €40m in annual revenue and a valuation of €500m by the end of 2023.
It will likely use a combination of organic and acquisitive growth to reach these targets with the CEO Tommy Kearns previously stating that they are on the lookout for bolt-on acquisitions in the range of €2m – €5m. Xtremepush is no stranger to M&A having previously completed the acquisition of UK companies Emailcentre and Alchemetrics.
C&R receives strategic investment
Deal Details:Compliance & Risks (C&R) announced that it received strategic investment from Luminate Capital Partners. Terms of the transaction were not disclosed.
Compliance & Risks, headquarted in Cork, is the leading end-to-end global product compliance solution provider across the technology, consumer goods and retail, industrial goods and life sciences sectors.
Its customers include Bose, Tesla, Vaillant, Unisys, Samsung and Fujitsu.
San Fransisco-based Luminate Capital Partners is a private equity firm investing in growth software companies.
Luminate’s portfolio of market leaders has included AMTdirect, Comply365, Conexiom, Fintech, LiquidFrameworks, MSI, Oversight Systems, StarCompliance etc.
Advisers: C&R: M&A – Alan Kelly, Owen Hackett and Dermot Brennan of Focus Capital Partners Legal – Nixson Peabody in the US RDJ Corporate Partners Sean O’Reilly and Gillian Keating led the transaction, supported by Gavin Bluett (Corporate), Aidan Burke (Corporate), Eoghan Doolan (Corporate) and Mark Barrett (Tax). Ashling Walsh (Corporate), Eoin Tobin (Tax) and Mark Ludlow (Tax)
Luminate: McCann Fitzgerald and Kirkland & Ellis
Renatus Comment: This is a great Irish entrepreneurial success story. The business was founded in 2002 by Damien McGovern. While working with Deloitte, he realised there must be a more efficient way to assess the risks and opportunities in legislation. This idea is what gave rise to the compliance knowledge management platform.
The business has been on a strong growth trajectory in the last number of years with revenue more than doubling from €4.1m in FY2015 to €11.2m in FY2020. EBITDA in FY20 was c. €3.6m.
Damien McGovern was the largest shareholder pre-transaction and the company was backed by Enterprise Ireland.
Source: Compliance & Risks
Irish Life to acquire Ark Life
Deal Details:Irish Life is to acquire Ark Life from ReAssure Ltd for a reported €230m.
The deal is expected to be completed by early 2022, subject to regulatory and anti-trust approvals.
Ark Life is a closed-book business that manages heritage savings and protection products in Ireland, and was acquired by Phoenix as part of its ReAssure acquisition in 2020.
The deal will see Irish Life take over approximately 150,000 policies, and €2.1b worth of assets from Ark Life.
Irish Life already has a relationship with Ark Life through an outsourcing arrangement for Ark Life’s policy administration and investment management.
Advisers: None mentioned
Renatus Comment: The wealth management and pension sectors are active markets for M&A with Irish life being one of the most active players in the space. Since 2018, it has acquired Invesco, City Life, Acumen & Trust, Conexim, APT Workplace Pensions, Clearview Investments and Pensions and most recently Harvest Financial Services. It was also contender for Goodbody Stockbrokers when it was on the market. Source: Pensions Age
Cork Plastics is acquired by Wienerberger
Deal Details: Wienerberger, the worlds biggest brick maker, has announced acquisition of Cork Plastics and FloPlast in the UK. The deal consideration has not been disclosed but is rumoured to be worth an estimated €200m.
Cork Plastics, established in 1969, is a diversified manufacturer and supplier of plastic rainwater, drainage and plumbing products for the residential construction, agricultural and utilities sectors.
FloPlast, a sister company of Cork Plastics, was launched in 1991 and is a specialist manufacturer and supplier of plastic rainwater, drainage and plumbing systems primarily focused on the RMI sector.
Austria-headquartered Wienerberger AG operates 197 production sites in 29 countries and is the world’s largest producer of bricks and the market leader in clay roof tiles in Europe as well as concrete pavers in Central and Eastern Europe.
Advisers: None mentioned
Renatus Comment: These look to be like two highly complementary acquisitions for Wienerberger. Wiernberger is using acquisitions to expand its product portfolio and become a full systems provider in the Irish and UK markets. These acquisitions will add rainwater, roofline and drainage products to its existing portfolio.
Combined, Floplast and Cork Plastics generate €100m in revenue and employ 370 people. Pre-transaction, Cork Plastics and FloPlast were largely owned by members of the Lynch and O’Brien families.
Glantus acquires Technology Insight Corporation
Deal Details:Dublin-based Glantus, a provider of Accounts Payable automation and analytics solutions, has acquired Technology Insight Corporation for an undisclosed sum.
Technology Insight Corporation, a U.S. based company, has developed its own proprietary AP analytics solution, Datashark, that digitizes the recovery audit process.
The acquisition will provide an immediate boost to Glantus’ earnings per share and represents a major next step in their post-IPO growth strategy while further expanding into the U.S. market. Glantus now has over 300 customers across more than 50 countries, including Fortune 500 brands and large multi-nationals.
Advisers: None mentioned.
Renatus Comment: The consideration for the transaction is reported to be $9.3m. The acquisition is being funded by a combination of existing cash resources and a new $5.9m loan facility from Beachpoint Capital. For the year ended December 31 2020, Technology Insight reported turnover of $3.8m and pre-tax profits of $0.6m. Glantus generated revenue of €8.5m and an adjusted EBITDA of c. €2.0m in 2020.
Glantus recently completed an IPO raising £10m in funds giving it the firepower to continue to grow the business organically and through acquisition. At the time of listing, Glantus was reportedly the first Irish Company to list on a major exchange in Ireland or the UK in over two years. The global accounts payable automation market is forecast to grow from €1.8bn in 2020 to over €3bn by 2027 driven by large enterprises increasing their IT spending and migration toward cloud-based solutions.
Irish tech company AdaptiveMobile Security is acquired
Deal Details:AdaptiveMobile Security has been acquired by Swedish telecoms software firm Enea in a deal reportedly worth €45 million.
Founded in Dublin in 2006, AdaptiveMobile Security is a world leader in mobile network security, protecting more than 2.2 billion subscribers worldwide. The company, which employ 135 offices across Dublin, Dallas, Brno, Dubai and Hyderabad.
Headquartered in Stockholm, Enea is the provider of cloud-native products that are used to enable services for mobile subscribers, enterprise customers, and IoT. More than 3 billion people are estimated to rely on its products.
Advisers: Enea: PwC acted as financial advisor and Pinsent Masons as legal advisor.
AdaptiveMobile Security: Pegasus Capital acted as Corporate Finance adviser. Feargal Brennan, Neil Keenan, Darren Daly, Eamonn Carey and Anthony Smyth of Byrne Wallace also advised.
Renatus Comment: Adaptive Mobile Security was backed by Intel Capital, Doughty Hanson & Co. Technology Ventures and Noor Financial Investment Company. It raised c. €15m in capital from Series A and Series B fundraising rounds completed back in 2006 and 2007.
CRO filings show that for the period ending December 2019, Adaptive Mobile generated an EBITDA of c. €100k off turnover of €14.65m.
Source: Irish Times, AdaptiveMobile Security
Two-Ten Health merges with Titanium Solutions
Deal Details: Two-Ten Health has merged with New Zealand-based Titanium Solutions to form the world’s largest specialised enterprise oral health software company.
Two-Ten Health’s flagship product, Salud, is a leading enterprise software solution for Dental Teaching Hospitals, Public Health Institutes and Private Dental Groups worldwide.
Titanium Solutions is a market leader for enterprise oral health solutions in Australia and New Zealand and a growing presence in the Middle East and Asia, Titanium Solutions limited provides tailored solutions for Public Health Services, Dental Schools, Corporate Chains, and Defence Health Services.
Advisers: Two-Ten Health: John Bowe and Sean Damery of Mazars Corporate Finance Reddy Charlton Corporate provided legal advice Renatus Comment: CRO filings show that Two-Ten Health had 43 different shareholders on its register prior to the transaction. Directors Carl & Gene Moynihan, David Philips and Keith Hemingway collectively owned the controlling shares in the company. Enterprise Ireland is also a backer of the company.
Most recent set of financials show the company generated €1.7m of turnover in 2018
Wexford-based Solar Electric is an Irish designed and installar of solar renewables and energy storage systems.
Based in Clonskeagh in Dublin, Pinergy is a leading provider of renewable electricity to residential and commercial markets. Pinergy is led by CEO Enda Connell and generated c. €45m in revenues in 2020.
Advisers: None mentioned
Renatus Comment: The Solar PV market is likely to see an uplift in activity in the years ahead. Ireland’s Climate Action Bill was recently passed, establishing a legally binding framework and targets to support Ireland’s transition to a net zero emission economy. The number of Solar PVs installed will likely need to grow to support this.
Solar Electric reported revenues of c. €4m in 2019 and is projecting to hit €10m over the next three years. CRO filings show that the founder of Solar Electric, Thomas Foley held c. 34% of the shares in the business pre-transaction. Robert Goss, the Sales & Marketing Director, also held c. 34% of the shares pre-transaction.
Presagla Sports, based in Canada, has developed an electronic medical records system for athletes and its clients included the Pac-12 athletic sports league and its member institutions.
Kitman Labs was founded in 2012 by Stephen Smith and Iarfhlaith Kelly and is working to reduce the risk of injury in sports by using AI and data science to improve athletes health welfare and performance.
Advisers: None mentioned
Renatus Comment: This is Kitman Labs’ second acquisition, following the acquisition of The Sports Office in the UK last year. This acquisition will increase Kitman’s presence in the US significantly.
Last year Kitman raised €5.1m from investment company QVIDTVM and c. €440k from the Sony Innovation Fund. CRO filings show founders Stephen Smith and Iarfhlaith Kelly are the largest individual shareholders in the business, with other backers including Enterprise Ireland, US-based VC Blue Run Ventures, US banker Pete Kight and Irish rugby players Jamie Heaslip and Kevin McLoughlin.
Source: Sunday Business Post
Deals Updates & Other News
Fenergo buyout approved by EU
Deal Details: The EU Commission has approved the joint buyout of Irish fintech Fenergo by Bridgepoint and Astorg from New York venture capital giant Insight Partners.
Fenergo, with 860 employees around the world, provides software to some of the world’s largest banks.
Press reports put the value of the deal at $600m (€560m) and valued the company itself at €900m.
Open Orphan’s Poolbeg Pharma IPO
Deal Details: Dublin-listed pharmaceutical services company Open Orphan is to float Poolpeg Pharma and raise £25m (€29.4m) in its IPO on London Stock Exchange listing.
Poolbeg expects to have an initial market value of £50m on its targeted flotation date next Monday. Existing Open Orphan shareholders, who will receive direct shares in the company, will be left holding 51% of Poolbeg’s stock.
Source: Irish Times
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.
Newry-based Motis Group Limited is a shipping logistics company with over 2000 customers throughout Europe and a network of over 500 Freight Ferry routes. Along wth Newry, they also have offices in England, Czech Republic, Poland, Lithuania and Romania.
In its most recent financial year to June 2020, the business recognised revenue of £62.8m (up 4.5% YoY) and EBITDA of c. £1.3m (up 5.3% YoY). EBITDA converted to a net cash increase of c. £2.5m. The big movers in cash were a £2.6m cash release from working capital which was was partially offset by dividend payments of £410k, debt repayments of £246k and other uses for cash.
Motis was founded in October of 2002 by David McComb and Patrick Hutley who still own the business today.
Star Fuels & Farm Supplies Limited is a provider of farm supplies, including fertilizer, feed, oil and coal based in Clonmel, Co. Tipperary.
In its financial year to October 2020, the business recognised revenue of c. €19.2m (down 3.5% YoY) and EBITDA of c. €1.9m (down 5.6% YoY). EBITDA converted to a net cash increase of c. €871k with one of the most significant uses of cash being an exceptional item of c. €813k and the payment of taxes at c. €174k.
The business celebrated 25 years in business in 2018. Pat and Nora Myers started Star Fuels in 1993 and today Star Fuels employs c. 20 staff and has opened two additional branches. The business is today wholly owned by Aidan Myers.
What: Akeero has raised $1.2m in a pre-seed funding round led by Dublin-based venture capital firm Frontline Ventures. Other participants include Trusight Ventures, Tiny VC, Capitoria and Oyster Capital Investments.
Why: The funds will be used to accelerate product development, market penetration and to take on more engineering and operations staff.
Source: Irish Times
Who: Viridi Energy, a new venture that plans to put solar panels o the rooftops of commercial buildings at no cost to the owner or occupier. Viridi is headed by Ciaran McManus, a former Offaly GAA footballer.
What: Elkstone Capital is committing an initial €20m and up to €100m in funds to Viridi. The company will also use green bonds to finance the installations.
Why: Viridi plans to use the funds to install Solar panels on company premises or lands and then sell the electricity generated back to the customer at a discount.
Source: Sunday Times
Who: HaloCare, a company that has developed a monitoring system to help eldery people live independently. The company was founded by Niall Kelly, David Walsh and Dr. Johnny Walker.
What: The company has raised €200k from Enterprise Ireland. This brings the total amount raised by HaloCare to c. €6.2m
Why: Funds raised will be used to support HaloCare’s growth in the Irish market first and then to expand internationally into the US.
Source:Sunday Business Post
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.
Insolvencies data show a dramatic reduction in insolvencies compare to recent years. Stock markets are at all time high. Banks are reporting big cash balances building across businesses. Consumer Sentiment is high. CEO sentiment per PwC report is multiples of what is was last year.
It seems life is good and we should sit back and enjoy the ride.
Let’s hope this continues for years ahead. Cormac Lucey has a very good article in today’s Sunday Times setting out the risks to the continuation of the current trend domestically, namely: 1. More snakes and ladders with covid infections/mutations/lockdowns 2. Northern Ireland protocol not getting smoothed out and creating an EU / UK trade war 3. Sustained Inflation 4. Government borrowing needed to fund covid measures places too big a burden – particularly if interest rates were to rise
The increase in the Irish jobs postings as of June 25th over the pre-covid baseline of February 1, 2020. Sectors such as cleaning, sports and food preparation were among those to grow postings, according to Indeed. @IndoBusiness
The amount of their net income that Irish tenants spend on rent, on average. The national average rent for Q4 2020 was €1,256 and €1,745 in Dublin, according to Residential Tenancies Board. @RTBinfo
13.4% & 7.4%
The year-on-year increase in he Irish agricultural output and input price indices, respectively, for May 2021, according to @CSOIreland
The year-on-year increase in the Irish residential property prices with the average price of €265,000 paid, according to @CSO @IrishTimesBiz
The year-on-year increase in Dublin Port’s volumes for Q2 2021, amounting to 9 million gross tonnes, according to @DublinPortCo
41% – The year-on-year increase in the passenger numbers travelling through Dublin Port for Q2 2021, amounting to 125,000 passengers, according to @DublinPortCo
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Renatuswas 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:
Growth financing – both organic and acquisition growth financing