Digital Marketing Institute acquired by BPP Education, Insteco Ltd acquired by Induchem Group, Hyderus Teoranta is acquired and more in our latest newsletter.
Renatus Weekly M&A & Company Performance Private Equity Newsletter 19/02/2023
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
THOUGHT FOR THE WEEK
Across our portfolio, no business has been immune to the unprecedented wave of inflation that hit almost every cost line. Almost all increases could be traced back to container prices, strong dollar prices and of most influence was the cost of energy, driven by gas prices.
With the former two coming back in line in December and January it was great to read this week that European natural gas has hit an 18-month low. Hopefully this points to a true lead indicator for moderating inflation as it feels like price elasticity has been stretched to its limit, with the wider economy unlikely to absorb the ripple effect of another year of mass inflation.
Digital Marketing Institute acquired by BPP Education
Deal Details: Blackrock-based Digital Marketing Institute has been acquired by BPP Education for an undisclosed sum.
Digital Marketing Institute is a provider of digital marketing courses. The business was founded in 2009 by Ian Dodson and Anthony Quigley and currently employs c. 100 employees. The business does not report turnover or EBITDA information.
BPP Education is a UK-based professional and vocational education company backed by TDR Capital. In FY21, the business reported turnover of £45.0m.
Advisers: Digital Marketing Institute: Legal: A&L Goodbody led by Sheena Doggett, Gina Keating, Orla Fenton (Corporate and M&A), Emma Creaven (Commercial Technology) and Stephen Egan (Tax). Corporate Finance: Raymond James. FDD: BDO led by Rory O’Keeffe.
Renatus Comment: Since being founded by Anthony Quigley and Ian Dodson in 2008, Digital Marketing Institute has grown to certify over 55,000 professionals globally. Quigley’s journey originally accelerated in the 1990s with Microsoft, before he embarked on a career as a serial entrepreneur with his first company Net Results, before establishing the Digital Marketing Institute. The business received €26m in funding in 2017, with Quigley subsequently becoming a minority shareholder. Quigley’s passion for entrepreneurship has not stopped there, having also founded the Code Institute and most recently the Corporate Governance Institute. At 61, Quigley is proving that age is but a number, with his passion for entrepreneurship burning as brightly as ever.
Source: Business Post
Insteco Ltd acquired by Induchem Group Ltd
Deal Details: Insteco Limited has been acquired by Induchem Group Ltd. Deal consideration was not disclosed.
Insteco Limited is a Cork-based distributor of process instrumentation to customers across the Life Sciences, Pharmaceutical, Dairy, Semiconductor, Food & Beverage, and General Utilities sectors. It was established in 1993 and was previously owned by Jude O’Keeffe and Alan Breen. It does not report turnover or EBITDA information.
Induchem Group Ltd is a specilaist provider of fluid-handling equipment with offices in Cork, Dublin, Cheshire and Glasgow established in 1982. In 2019, it was acquired from owner David Carroll by global industrial group Axel Johnson. Axel Johnson is made up of over 190 companies in 33 countries. Induchem had FY Dec 21 turnover of c. €14.4m which converted to EBITDA c. €1.7m.
Advisers: Insteco Limited: Corporate Finance: IBI Corporate Finance led by Raymond Donegan and Robert Coyle. Legals: Holmes led by Stephen Walker and Ciara Downes.
Induchem Group: Corporate Finance: Deloitte led by Derek Murphy. Legal: PJ O’Driscoll led by Justin Fennell.
Renatus Comment: The creation of a favourable economic environment in Ireland’s life sciences and pharmaceutical industries over the past several decades, has sustained massive growth in the broader ecosystem of product suppliers and service providers surrounding these industries. Insteco supplies many types of instrumentation to these sectors and should enjoy continued success under the Induchem umbrella, with the downstream of activity from the wider sector continuing to be a key feature of deals.
Source: Axel Johnson Press Release
Hyderus Teoranta acquired by FINN Partners, Inc.
Deal Details: Hyderus Teoranta has been acquired by FINN Partners, Inc. Deal consideration was not disclosed.
Hyderus Teoranta is a Wexford-based, health-focused communications firm which provides guidance on health policy issues to leading biopharma companies and NGOs. It was owned by Mark Chataway and Christopher Nial. It does not report turnover or EBITDA information.
FINN Partners is a global independent marketing and communications agency, based in New York. Its Global Health practice generates over $50m in revenue annually.
Advisers: None Mentioned.
Renatus Comment: This deal follows FINN Partners’ acquisition of 360, another Irish public relations and lobbying business, in 2021. As we saw with Penta’s acquisition of Hume Brophy last month, it can make a lot of sense for smaller firms in this industry to sell to international groups, given the increasing emphasis on global reach and cross-border communication campaigns, especially in the public health sphere that Hyderus Teoranta operates in.
Source: Cap IQ
PIB Group acquires Landmark Insurance and Halligan Insurances
Deal Details: PIB Group Ltd (‘PIB’) has acquired Landmark Insurance and Halligan Insurance. Deal considerations were not disclosed.
PIB Group Limited is a group of insurance advisory businesses providing 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 firms Apax Funds and The Carlyle Group. It is headquartered in London. In FY21, it recorded a turnover of c. £230.9m, which converted to an EBITDA of c. £44.5m.
Landmark Insurance is a Dublin-based insurance broker that mainly operates commercial and personal lines along with a niche life and pensions business. In FY Dec 21 it reported turnover of c. €850k. It was owned by Mark Pringle and Kenneth Treacy.
Halligan Insurances is Dublin-based provider of insurance products and services to members of trade unions, affinity groups and staff organisations. It was previously owned by Brian Halligan, Colm Stafford and a number of smaller shareholders. It had FY21 turnover of €1.1m.
Advisers: PIB: Legal: DLA Piper led by Matthew Cole, Maria Hickey and Dara McDonald. Financial and Tax DD: Mazars led by Mark Mulcahy, Anthony Shiel, Kevin Hogan, Robbie Graham and Gerry Vahey, Nicole Hanlon.
Halligan Insurances: Corporate Finance: PKF led by David Lucas and Patrick Keane. Legal: Mason Hayes & Curran led by Cara Cooke and Andrew Fenton.
Landmark Insurance: Legal: Wallace Corporate Counsel led by Gar Smyth and Sean Hiney.
Renatus Comment: PIB Group continues to pursue its aggressive consolidation strategy. Last year it made 6 acquisitions in the Irish market through its subsidiary Campion Insurance, before acquiring McGivern Insurance Brokers in January 2023. It has said that it expects to complete several more deals this year as it continues to target specialist insurance providers.
Source: PIB Group Press Release
Topfloor Systems acquired by Grafenia plc
Deal Details: Grafenia plc has acquired Topfloor Systems for a reported consideration of c. €6.2m.
Topfloor Systems is a Dublin-based supplier of software services for the property sector used by property agents, property owners, landlords, and tenants. The business is owned by George Murphy, Niall Wrafter, and Cathal Browne. The business does not report turnover or EBITDA information.
Grafenia plc is a UK-based business that builds software-as-a-service (SaaS) systems. In FY22, the business reported turnover of c. £8.9m which converted to an EBITDA of c. £0.2m.
Renatus Comment: Topfloor Systems was featured in the 2009 Deloitte Technology Fast 50, a ranking of the 50 fastest-growing technology companies in Ireland and has since expanded its growth to the UK market. The deal will extend Grafenia’s SaaS offering as it embarks on its fourth acquisition and furthers its renewed focus on its software offering. In May 2022, Grafenia sold the manufacturing arm of its business in order to focus on its SaaS offering, with its chairman describing the software arm as consistently cash-flow generative for the business. Given the diversified nature of the portfolio of SaaS offerings under the Grafenia brand, the expertise of Topfloor executives Niall Wrafter (CEO) and Cathal Browne (CTO) will be retained as they continue in their existing roles.
Westerwood Global acquires NStar Global Services
Deal Details: Westerwood Global has acquired NStar Global Services. Deal details have not been disclosed.
Westerwood Global provides Managed Service Solutions to the semiconductor, solar panel, LED and storage industries. The business is based in Kildare and was founded by Basil Holihan in 2000. The business had FY21 turnover of €16.4m which converted to an EBITDA of €2.4m.
NStar Global provides asset relocation, facility and equipment maintenance and workforce management services. The business is based in North Carolina and does not report turnover or EBITDA information. It is led by CEO, Darren McDaniel.
Advisers: None mentioned.
Renatus Comment: In 2019, Westerwood received Private Equity backing from UK-based Perwyn, which purchased 49% of the shares in Westerwood. The deal at that time allowed Basil Holihan to monetise some of his success, de-risk and focus on the growth of the Kildare-founded business. Following the investment, Westerwood has gone on to expand its global presence, opening 3 locations in the US since 2019.
Source: Sunday Times
Michael Guiney Limited, trading as Guineys, is a Dublin-based retailer of bedding, curtains and home furnishings. It was established by Michael Guiney in 1971 and now operates stores across Ireland. It is still owned by Michael and several other members of the Guiney family.
In its financial year to January 2022 the business generated a turnover of c. €22.6m, an increase of 19.2% year-on-year. This converted to c. €2.9m of EBITDA, an increase of 10.3% year-on-year. The increase in EBITDA was primarily driven by increased revenue.
The business finished the year with a cash balance of c. €3.3m, a c. €0.7m increase on FY21. Significant post-EBITDA cash movements included working capital investment, the purchase of fixed assets and dividends paid.
The business employed an average of 179 people during the period at a total cost of c. €4.2m.
Morrow Group Limited is a Belfast-based civil engineering business working in the installation and maintenance of electricity, water, sewerage, gas, street-lighting, rail, and telecom supplies throughout the province. The business has been in operation for c. 40 years and is owned by John Morrow.
In its financial year to April 2022, the business generated a turnover of c. £41.9m, an increase of 44.0% year-on-year. This converted to an EBITDA of c. £8.3m, an increase of 68.3% year-on-year. The business realised operating leverage over the year which drove an increase in EBITDA margin.
Significant post-EBITDA cash movements include payments to acquire tangible assets of c. £3.3m and a c. £1.2m investment in working capital. The business finished the year with a cash balance of c. £11.9m, a 50.5% year-on-year increase.
The business employed an average of 154 people in FY22 at a total cost of c. £6.6m.
Who: Chupi, a Dublin-based jewellery designer making solid gold, diamond, and gemstone jewellery.
What: The business has raised €3.75m of funding from a mix of backers including Business Venture Partners (BVP), Abbey Finance, and Permanent TSB (PTSB).
Why: The funding will be used to enhance the brand’s online augmented reality offering that allows shoppers to digitally try on a ring from anywhere in the world.
Advisers: Financial: IBI led by James Doody and Ben Murphy. Legal: LK Shields led by Emmet Scully and Kristofer O’Shea.
Who: Newswhip, a Dublin-based predictive media monitoring firm.
What: The business has raised $13m in a funding round led by London-based AshGrove Capital.
Why: The business will use the money to grow its operations, with plans to increase its workforce by 50% between now and 2024.
Advisor: Pegasus Capital
Who: Astatine, a Dublin-based company that delivers tailored renewable energy projects using solar PV and heat pumps.
What: The company has raised €15m in funding with an option to add another €10m, from Solas Sustainable Energy Fund ICAV.
Why: The funds will be used to deliver projects that target the decarbonisation of industrial and manufacturing businesses.
Who: PacSana, an Irish homecare tech company that sells products, including wearable technology, to help elderly people live independently.
What: The company has raised €1 million in funding in a round led by Eoghan Quigley and Richard Hayes.
Why: The funding will be used to target expansion in the US market where the company has focused its operations over the past two years, following its last fundraise in 2021.
Who: Overhaul, an Irish-founded supply chain software company led by Barry Conlon and David Broe.
What: The business has raised €36.7m in funding in a Series B round led by Edison Partners.
Why: The funding will be used to expand the Overhaul team, with the company looking to grow beyond its current core market in North America.
Who: MoCo, a non-bank mortgage lender, headquartered in Dublin and founded by former AIB executive Patrick Good.
What: The business has raised c. €1.4m from Dutch bank, NIBC.
Why: The funding will be used to continue developing MoCo’s platform.
Who: Limerick Twenty Thirty, the Limerick-based property developer.
What: The organisation has received €80m in funding under a joint venture partnership with the Ireland Strategic Investment Fund (ISIF).
Advisers: Limerick Twenty Thirty Legal: Holmes led by Sandra Egan, Lorraine Power and Gillian Butler (Commercial Real Estate team), Lisa Killeen and Nicola Hackett (Banking & Finance and Construction teams) and Caroline Connolly (Corporate).
Why: The funding will be used to fund the One opera Square project in Limerick city centre.
Source: Holmes Press Release
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.