AMCS acquires Utility Cloud, PAX Financial acquired by Fairstone, ValitaCell acquired by Beckman Coulter Life Sciences& more in our latest Renatus newsletter.
Renatus Weekly M&A & Company Performance Private Equity Newsletter 18/09/2022
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
THOUGHT OF THE WEEK
In a never-ending cycle of news about inflation, this week saw ifac (the professional services firm for farmers, food and agribusinesses) publish its annual Food and Agribusiness Report. It has published an Optimism Index for the past 5 years and this year that index hit its lowest point with only 54% of SME business owners in the sector optimistic about the future, a drop of 23 percentage points on the previous year. This sector of the economy is vital for rural Ireland and worryingly the report reflects high levels of disillusionment due to rising costs, recruitment and retention challenges as well as very difficult supply chain conditions.
Speaking in the report, Nicholas Dunne, owner of the Killowen Farm, the yogurt and cream cheese business which employs 70 people in rural Wexford, “Manufacturing has absorbed all possible cost increases and unfortunately the consumer will be faced with higher prices. It’s a balancing act with the retailer as everyone understands the need to be competitive but a food business must make a margin to stay in business”. And that folks is that in a nutshell. The full report can be read here: www.ifac.ie
AMCS acquires Utility Cloud
Deal Details: AMCS has acquired Utility Cloud. Deal consideration has not been disclosed.
AMCS is a global leader of integrated software and vehicle technology for the environmental, recycling, and resource industries and offers optimisation solutions to the broader transport and logistics market. The company was co-founded in 2003 by CEO, Jimmy Martin, and is headquartered in Limerick with over 1000 employees across Europe, the USA, and Australia. Backers include the Ireland Strategic Investment Fund (ISIF), Insight Ventures and Enterprise Ireland. In FY21 the business had a turnover of c €87.9m, which converted to an EBITDA of c. €14.7m.
Utility Cloud is a mobile platform that facilitates fieldwork, inspections and reporting built for spatial awareness. The platform allows workflows to be automated, asset health to be tracked, reporting to be streamlined, errors to be avoided from manual data collection and it keeps businesses compliant. It was founded by Mark Moreau in 2002 and is headquartered in New Hampshire, US. The business does not publish turnover or EBITDA.
Advisers: AMCS: None mentioned.
Utility Cloud: Financial: Canaccord Genuity
Renatus Comment: Acquisitions have played a huge role in accelerating AMCS’ growth in recent years and the business is reportedly currently on a trajectory to achieve run-rate revenues of over €180m by the end of the year. Recent acquisitions include the acquisition of Quentic in July of this year, Utilibill in January of this year, and Dossier Systems in November of 2021.
AMCS does not come up on the anecdotal list of Irish unicorns which speaks more to their humility than their lack of belonging in that group. There is a lot to be learned from Jimmy, if you have not listened to our podcast with him yet, you can click here.
Source: AMCS Press Release
PAX Financial acquired by Fairstone
Deal Details: PAX Financial has been acquired by Fairstone. Deal consideration has not been disclosed.
PAX Financial is a financial planning service that advises on investments, wealth management, inheritance, pensions and more. Paul Merriman the current CEO acquired the business in 2011, the company has since grown and currently employs 54 employees. The business is headquartered in Dublin. Paul Merriman will take over as Fairstone Ireland CEO following the acquisition. In FY20 it had a turnover of c. €3.2m, which converted to an EBITDA of c. €596k. The business was owned by Paul Merriman, Ian Britton, Conor Byrne and others.
Fairstone is a full-service asset management house that offers financial advice, investment management and estate planning services. Lee Hartley, the group’s CEO, founded Fairstone in 2008 and the business is headquartered in Newcastle, UK. With support from backers including Synova, TA Associates, Lloyds Banking Group, and Alcentra, Fairstone has achieved outstanding growth in recent years with revenue growing from c. £23.7m in 2016 to reportedly exceeding £100m in 2021.
Advisers: Fairstone: Corporate Finance: PKF led by David Lucas & Patrick Keane. FDD: KPMG led by Gavin Sheehan. Legal: Maples led by Patrick Quinlan.
PAX: Legal: LK Shields led by Ruairi Mulrean.
Renatus Comment: Growth has been largely driven by acquisition with the group celebrating its 50th acquisiton earlier this year. Almost all of these acquisitions were in the UK with a single acquisition in the US of Advanced Financial Planning, LLC in 2020. This is also Fairstone’s first acquisition in the Republic of Ireland having previously acquired Northern Irish, First Financial Management in 2017.
PAX has been on a similar growth trajectory in recent years, having gone from revenue of just over €0.5m in 2016 to €3.2m in 2020. This growth has been driven to some extent by the brand ‘Ask Paul’, which offers jargon-free financial advice to consumers via social media channels. Its Instagram page has over 102k followers.
Source: Fairstone Press Release
ValitaCell acquired by Beckman Coulter Life Sciences
Deal Details: Biotech company ValitaCell has been acquired by Beckman Coulter Life Sciences. Deal consideration has not been disclosed.
ValitaCell is a Dublin-based company that creates analytical technologies and products for the biopharmaceutical industry, with the aim of reducing the cost and time to market for new therapeutics. The business was founded in 2014 by Dr Jerry Clifford, who has led the company as CEO and Dr Terry McWade. It is headquartered in the National Institute of Bioprocessing Research and Training and has a second location in Galway. The company does not publish turnover or EBITDA information.
Beckman Coulter Life Sciences is a laboratory automation and innovation company. Its biotechnology division had partnered with ValitaCell for some time prior to the acquisition. Beckman Coulter was founded by Arnold Beckman in 1935 and is headquartered in Indiana, US. It became a Danaher Group business in 2011. In FY22 Danaher group had a turnover of c. €22.4bn, which converted to an EBITDA of c. €9.6bn. Beckman Coulter Life Sciences does not publish turnover or EBITDA information.
Advisers: None mentioned
Renatus Comment: The acquisition of ValitaCell represents a huge milestone for the founders, who first raised funding in 2016, with a follow-on $2m funding round the following year. The rapid growth of the business is testament to the key role that its products play in the pharmaceutical development process and to the opportunities available to indigenous companies in the significant pharma industry in Ireland. VialitaCell’s technologies focus on reducing the time and cost to market for new therapeutics products which is an attractive value proposition for companies such as Beckman Coulter.
Source: ValitaCell Press Release
Eureka Information Systems acquired by Mandata
Deal Details: Eureka Information Systems has been acquired by Mandata. Deal details have not been disclosed.
Eureka is a transport and logistics management system that can run every aspect of operations from order to invoice. This system is suitable for all types of transport work including full load, tipper, multi drops, pallet operations, bulk/heavy haulage and crane hire operators. It was founded in 2012 and is owned by Eddie Doyle and Damien Power and is headquartered in Wexford. The company does not publish turnover or EBITDA information.
Mandata is an integrated software platform that offers management solutions for companies of all sizes in all sectors. Mandata’s transport solutions help hauliers manage their day-to-day operations more effectively, ensure compliance, reduce carbon footprint, and improve real-time visibility of operations. It was founded in 1974 and is led by CEO Chris Rigg. It is based in Newcastle upon Tyne. The business is backed by Tenzing and Lloyds Development Capital. In FY21 the business had a turnover of £7.6m, which converted to an EBITDA of c. £2.7m.
Advisers: None mentioned.
Renatus Comment: According to DHL, ocean freight congestion is showing no signs of abating just yet, with McKinsey highlighting clogged ports as one key factors exacerbating supply chain issues in the global economy. As such, the optimisation of the transport of goods on arrival is crucial to easing some portion of these issues. Eureka’s software aids in logistical planning and will complement Mandata’s existing offering, with live ferry updates and real-time driver and truck tracking providing greater visibility over the transport operation. The acquisition of Eureka adds c. 200 customers to Mandata’s existing 2,000.
Source: Mandata Press Release
Radius acquires majority stake in Traction
Deal Details: Radius has acquired a majority stake in Traction. Deal details have not been disclosed.
Traction Finance is a contract hire company that directly funds and manages vehicles throughout Ireland. The business offers business and personal contract hire, hire purchase, rental, financing and sale of both new and used cars. It was founded by Paul McGuire in 2003 as Lease Options Limited but the business re-branded to Traction in 2014. It is headquartered in Belfast and has expanded across Ireland and the UK. The business does not report turnover or EBITDA information and is owned by Paul and Lesley Maguire.
Radius is a sustainable mobility, connectivity and technology solutions company. It was founded by Bill Holmes in 1990 and is headquartered in Cheshire, UK. The business expanded into the Irish market in 1995. In FY21 it has a turnover of c. £2.2bn, which converted to an EBITDA of c. £87.6m. The business is owned by WIlliam Holmes, Roy Sciortino, Gillian Holmes, Jarrod Atkinson and a variety of other investors and individuals.
Advisers: Radius: None mentioned
Traction Finance: Legal: Millar McCall Wylie led by corporate lawyers Damian McParland and Louise Cavanagh, assisted by property lawyer Michael Wilson and employment lawyers David Mitchell and Niamh McMonagle.
Renatus Comment: Radius is an interesting case study. Having started as a fuel card company over 30 years ago, it has leveraged an aggressive M&A strategy in an attempt to become a one-stop-shop for businesses. Its solutions range from insurance, vehicle solutions, telematics to telecoms and energy with these solutions being linked by the business’ key themes of mobility, connectivity and technology. The business has built up a strong customer base with which it can continually cross-sell new solutions from its acquired companies.
The breadth of its M&A strategy is evident in the business’ recent acquisitions, which include Milestone Insurance, Signature Underwriting and Keystone Insurance in the insurance segment, an e-mobility software platform in South Africa, Air Telecom in the telecoms space and Global Go, a UK vehicle leasing company.
Source: Radius Press Release
777 Partners acquires minority stake in USG
Deal Details: 777 Partners has acquired a 40% stake in United Star Software (“USG”). Deal consideration has not been disclosed.
USG is a Dublin-based aggregator of regional software development groups in Central and Eastern Europe. It works with public and private sector clients on highly complex custom software development and agile solutions. The business was founded by Tomaž Sešek and Ivan Bajic in 2022. The business does not publish turnover or EBITDA information.
777 Partners is a Miami-based alternative investments fund that cover seven broad industries with a strong focus on financial services.
Advisers: None mentioned.
Renatus Comment: Having only been incorporated in 2022, USG’s stated aim is to acquire some of the world’s leading software development companies. Both founders have varied but highly relevant backgrounds. Tomaž Sešek has over 30 years of experience in the management of technology companies and software development across firms such as Adacta, SRC and Stern Stewart. Ivan Bajic is an M&A and Investments specialist with a successful career across several leading institutions, including Glencore, ING, Deloitte and RBI. The pair’s expertise along with the backing from 777 Partners should position USG to have a successful first year.
Joule Group acquires majority stake in Climer Technology
Deal Details: Joule Group has acquired Climer Technology for an undisclosed sum.
Joule Group is an Irish-based heating equipment manufacturer that has become one of Ireland’s largest manufacturers of solar panels and heating systems. The business was founded in 2012 by Ian Barrett and Ronan Ginnell and is headquartered in Dublin. Inventum B.V. is the ultimate parent of the company. In FY20 the business had a turnover of c. €80.6m, which converted to an EBITDA of c. €11.9m. The business is led by MD Ian Barrett.
Climer Technology is a manufacturer of heat pumps specialised in air source and solar thermodynamics. It was founded in 2016 and is headquartered in Lucena, Spain. The current owners will retain a shareholding following the acquisition. The business had a reported turnover of c. €7.0m in FY21.
Advisers: None mentioned.
Renatus Comment: Joule Group began in 1970 as a small manufacturer of copper vented hot water cylinders and gradually expanded its offering over the years.
In 2016, Dutch-based Inventum acquired a majority stake and the business has continued to grow since. The business already had a presence in Ireland and the UK, having acquired UK-based water storage solutions provider, RM Solar group in 2018. This is the group’s first acquisition outside of the UK and may be a sign of future expansion into the mainland European markets.
Smurfit Kappa acquires PaperBox
Deal Details: Smurfit Kappa has acquired Brazilian-based, PaperBox for an undisclosed sum. The deal is subject to regulatory approval.
Smurfit Kappa, based in Dublin, manufactures, distributes, and sells paper-based packaging products. It operates through two segments, Europe and the Americas. The group is led by CEO, Anthony Smurfit, grandson of the original founder, Jefferson Smurfit. The business had FY21 revenue of €10.7bn, which converted to an EBITDA of €1.5bn.
PapaerBox is a packaging plant located just outside Rio de Janerio in Brazil. The business has not published ownership or financial information.
Advisers: None mentioned.
Renatus Comment: Smurfit Kappa has positioned itself as a leading supplier in Latin America in recent times, with this acquisition expanding the business’ existing footprint in Brazil, adding to its existing presence in three states, along with its 2021 acquisition of Cartones del Pacifico, a Peru based packaging company. The business’ particular focus on Brazil is driven by the fact that it is the largest corrugated cardboard market in Latin America, producing 7.4bn square metres annually. Smurfit’s focus on the sustainability of its products can only represent a positive for the region, ensuring that a greater portion of the significant demand catered for in the region is in line with broader global targets targeting net zero CO2 emissions by 2050.
Source: Smurfit Kappa Press Release
Frank Keane acquires Doran Motors
Deal Details: Frank Keane, owner of the Frank Keane Group is to acquire Doran Motors. Deal consideration has not been disclosed and the deal is subject to approval by the CCPC.
The Frank Keane Group is a seller of new and pre-owned cars and commercial vehicles under the BMW, MINI and Volkswagen brands. It sells parts and accessories, and supplies associated financial services, after-sales services and repair services. It is also a wholesale distributor of FUSO trucks and MG passenger cars and parts. It was founded by Frank Keane in 1967 and has dealerships all across Dublin. The business does not publish turnover or EBITDA information.
Doran Motors is a supplier of Mazda, Hyundai, Skoda and Isuzu & LDV Commercial vehicles in the Northeast of Ireland. It is also an after-sales service agent for Volkswagen Commercial & Mitsubishi. The business was founded by Peter Doran in 1981 and is headquartered in Monaghan. The business is owned by Angela and Peter Doran. It does not publish turnover or EBITDA.
Advisers: None mentioned.
Renatus Comment: According to the Society of the Irish Motor Industry (SIMI), new car registrations for August were up 36.7% when compared to the same period last year. Registrations year-to-date are down 1.2% on the same period last year and are 14% behind that of pre-Covid levels. Brian Cooke, Director General of SIMI, has highlighted that supply chain issues are still hampering new and used car markets, but that electric vehicle sales have grown 80% year-on-year. Hyundai has had the top-selling car model this year (the Hyundai Tucson), while also having the second most popular electric vehicle. Given Doran Motors’ existing Hyundai offering, this looks to be a shrewd acquisition by Frank Keane.
DEAL UPDATES & OTHER NEWS
Moneycube announces a joint venture with Alexander Beard Group and the start of Pension Awareness Week
Deal Details: Irish provider of investments and pensions advice and services, Moneycube has announced a joint venture with UK-based financial advisor, Alexander Beard Group. This partnership will see Moneycube co-founders Ralph Benson and Feargal McKenna lead the Alexander Beard Group’s new Dublin office. Moneycube has also announced the start of Pensions Awareness Week, an annual campaign that involves multiple pension-related webinars relevant to both businesses and individuals from a variety of contributors. The event will run from the 19th-23rd of September.
Source: Alexander Beard Press Release
Tullow Oil to delist from the Dublin stock market
Deal Details: Tullow Oil has decided to quit the Dublin stock market after 33 years. This is following the merger worth c. €771m with Capricorn Energy that was announced in June. The company’s shares will continue to be traded on the London Stock Exchange and the Stock Exchange of Ghana.
Source: Irish Times
Glenellen Restaurants Limited is a McDonald’s franchise operator in Dundalk, Co. Louth. The business is owned by Elaine and Glenn Sterio.
In its financial year to December 2021, the business had turnover of c. €21.5m, a rise of 55.5% year-on-year. This converted to an EBITDA of c. €2.6m, a rise of 114.7% year-on-year. The business realised operating leverage as administrative expenses moved from 73.3% of sales in FY20 to 68.5% in FY21.
Glenellen finished the year with a cash balance of c. €8.0m, an increase of c. €1.3m year-on-year. Significant cash movements included a fixed asset purchase of c. €1.6m.
The business employed an average of 342 people over the year at an annual cost of c. €7.1m.
Deeside Agri Services Limited is a leading supplier of agrochemical supplies in Ireland. It works with leading fertiliser companies to sell standard or custom mixes and it also offers a bulk spreading service. The business is based in Louth and is owned by Billy and Grainne O’Dea.
In its financial year to November 2021, Deeside Agri Services reported a turnover of c. €43.0m, an increase of 48.3% year-on-year. This converted to an EBITDA c. €1.6m, a 39% increase year-on-year.
The business finished the year with a cash balance of c. €1.4m, a c. €2.1m increase on FY20. Significant post-EBITDA cash movements included payments to acquire investments and the repayment of both a long and short term loan.
The business employed an average of 22 people over the year, at an annual cost of c. €1.2m.
Who: Polywork, a professional social network that enables users to highlight both personal and professional skills and interests.
What: Polywork has secured $28m in a series B funding round led by Nat Friedman, the former chief executive of GitHub CEO and inlcuding the founders of Stripe, Lyft, Instacart, Paypal, YouTube, Twitch, Instagram and Reddit.
Why: The funding will be used to continue building out the platform and to expand the team.
Who: Optifly, an artificial intelligence start-up targeting the aviation sector.
What: The business has raised €2m in seed funding. Investors include PCH’s Liam Casey, John Higgins and Tom Ashe, formerly of Avolon, Conor McCarthy, founder of Emerald Airlines and AMG Ventures.
Advisors: BKK, led by Martin Black.
Why: The funding will primarily be used for recruitment, with a particular focus on engineers.
Who: Ronspot, the Galway-headquartered firm specialising in desk booking and hybrid working.
What: The business has raised €1.1m in a funding round led by Furthr VC and including HBAN and Enterprise Ireland.
Why: The funding will be used to drive the business’ global expansion, with a particular focus on the German market.
EXECUTIVE AND BOARD APPOINTMENTS
We in Renatus believe that more important than the deals are the people and we are pleased to provide you with details of key recent executive and board-level appointments.
The rise in the number of people buying second-hand clothes in August in Ireland, compared with August 2021, while the number shopping in traditional clothing retailers fell by 8%. The number of people renting clothes surged by 38%. @RevolutApp
The Irish Exchequer surplus as of August 2022. This compares to a €7.7bn deficit at the same time last year. The surplus is mainly attributable to a boost in corporation tax, income tax and VAT receipts. According to @IrishTimes @dfatirl
The approximate number of grant applications for solar panels in Ireland for the first eight months of 2022. This is more than double the 4,072 applications received throughout all of 2021. This comes as homeowners plan to reduce energy bills. According to @SEAI_ie
The reduction in the volume of building work in the Irish economy in Q2 2022. There was however a 3.2% increase in activity in comparison to the same period in 2021. According to @CSOIreland
The inflation rate for the OECD in July. This is a slight decrease on the 34-year high of 10.3% that was recorded in June and is the first decrease in inflation since November 2020. @OECD
The increase in Irish electricity prices in the year to July 2022. Gas (56%), home heating oil (92%), petrol (35%) and diesel (44%) were also up during this period. @RTEbusiness
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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