Renatus’ Weekly M&A Newsletter – 12/03/2023March 12, 2023
Renatus’ Weekly M&A Newsletter – 26/03/2023March 26, 2023
Renatus Weekly M&A & Company Performance Private Equity Newsletter 19/03/2023
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
There is a narrative that the world is crumbling, and it is a terrible start to the year across the board with Silicon Valley Bank, Credit Suisse, and First Republic Bank in the news. US and European stocks also took a tumbling turn this week as the world continues to navigate through these swift and dramatic events.
It is a fragile time in the world, but it should be noted that year-to-date the S&P 500 is up 2%, Nasdaq is up 12% and STOXX Europe 600 is up 2%.
MTM Engineering acquires CET Connect
Deal Details: MTM Engineering has acquired CET Connect for an undisclosed amount.
MTM Engineering is a Specialist Electrical and Mechanical Contracting business that was founded in 1997 by Martin & Patricia Mee. The business is now a second-generation family company, headed by Brendan Mee. In FY21, the business reported turnover of c. €40.2m which converted to an EBITDA of c. €4.2m.
CET Connect is a Dublin-based provider of structured cabling and data centre infrastructure services in Ireland, the UK, and France. The business was established in 1999 and in FY22, the business reported turnover of c. €9.7m which converted to an EBITDA of c. €833k.
Corporate Finance: Novacies Capital led by Ciaran McGloin.
Legal: Eversheds led by Enda Newton, Tara O’Donoghue (Corporate), Emile Mullan (Corporate), Robert Dever (Tax), Gillian Blanche (Real Estate) Ellie Cater (IP/Technology) and Conor Fynes (Employment).
Tax: Grant Thornton led by Liam Kenny which consisted of Caroline Kennedy, Lorcan O’Rourke and Elaine Flynn.
Legal: Matheson led by Robert Maloney-Derham, Jenny Keenan, Donal Feehan and Ciarán Murray
Renatus Comment: It is truly astonishing how Irish companies are building the global cloud. This includes CET Connect, MTM Engineering, and other increasingly global Irish based players such as Mercury, KN Networks subsumed into Circet, Winthrop, Dornan, H&MV, E and I and many more. The acquisition of CET Connect supports a buy-and-build strategy that will help expand MTM Engineering’s customer offerings. CET Connect’s client base consists of a variety of IT infrastructure projects across diverse sectors including Data Centres, Pharmaceutical, Healthcare, and Commercial. The acquisition will bring MTM Engineering’s total headcount to over 650.
Source: Matheson Press Release
LC Financial Holdings acquires Link Group’s Banking and Credit Management Division
Deal Details: LC Financial Holdings (LCFH) has acquired Link Group’s Banking and Credit Management Division subject to approval for a reported c. €30m.
LCFH is based in Dublin and is the parent to four businesses including LCM Partners, a credit investment business. LC Financial has been in operation for 25 years with 14 offices in 9 countries. In FY21, the business reported turnover of c. €84.6m which converted to an EBITDA of c €13.8m.
Link Group is an Australia-based pensions administrator which services the fourth-largest pension pool in the world based on funds under management.
LC Financial Holdings:
FDD: Deloitte led by Derek Murphy and Daniel McCrea
Tax DD: Deloitte led by Shane Wallace and John Fitzgibbon.
Legal: Dentons led by Shane O’Donnell and Michael McDonald.
Renatus Comment: This deal will add a new roster of banking and investor clients in Ireland, UK, Italy and the Netherlands for LCFH as the business continues to expand. In 2021, it was reported that LCFH had made a €65m bid for the business. However, the reported terms indicate that Link Group will receive €20m cash consideration at completion – expected in the second half of 2023 – plus deferred cash consideration of €5m payable within 12 months of completion and cash earn out of €5m subject to the divested business meeting certain financial targets by the second anniversary of the sale.
Source: Business News Australia
Farm Week acquired by National World PLC
Deal Details: Farm Week has been acquired by National World PLC for an undisclosed amount.
Farm Week is a farming coverage newspaper that has been in operation in Northern Ireland since 1961. The business does not report turnover or EBITDA information.
National World PLC is a UK-based operator of national news brands. In FY22, the business reported a turnover of c. £84.1m, which converted to an EBITDA of c. £9.8m.
Renatus Comment: The acquisition of Farm Week will further enhance National World PLC’s Agri exposure which already consists of the publication Farming Life. Farm Week’s first issue was published in 1961 at a time when Northern Ireland had a reported 46k farm businesses with an average farm size of 37 acres. There has been a lot of consolidation in farming and newspapers since then. The business was then acquired by the Irish News in July 2006. This marks National World PLC’s third acquisition in the Northern Irish market this year as it acquired The Newry Reporter in January 2023 and Banbridge Chronicle in February 2023.
Source: Belfast Telegraph
Responsible acquires Haru
Deal Details: Responsible has acquired fashion re-commerce provider Haru for an undisclosed amount.
Responsible is a Belfast-based business that focuses on refurbishing streetwear. It is majority owned by Mark Dowds and Mitchell Doust and it does not report turnover or EBITDA information.
Haru is a Belfast-based eCommerce provider focused in on the second-hand fashion industry that has supported over 550 charity shops across the UK and Ireland. The business was founded by childhood school friends Jacques Hill and Sam Lynas. The business does not report turnover or EBITDA information.
Renatus Comment: In 2022, Responsible raised $6.6m in a seed funding round led by Barclays to help support growth ambitions. The integration of both platforms will help to increase market share in the global second-hand apparel market. In August 2022, data from Revolut showed a 60% increase in the number of people buying second-hand clothes. Many aspects are driving a boom in the Irish pre-loved market including ESG conscious individuals opting to buy clothes that are local and sustainable. There is also a cost of living crisis that has many consumers looking for cost saving options.
Source: Irish News
Corporate Care Relocation acquires Accent Relocation
Deal Details: Corporate Care Relocation (CCR) has acquired Accent Relocation for an undisclosed amount.
CCR was founded in 1997. The business provides assistance for employees moving from one location to another. CCR was originally based in Cork and it has since expanded its operations to Dublin. The business is majority owned by Brian Kelly and Frank Morley and it does not report turnover or EBITDA information.
Accent Relocation is a UK-based relocation services provider. The business does not report turnover or EBITDA information. The business is owned by Leonia Newman John Adamson.
Corporate Care Relocation:
Legal: Regan Wall led by Kieran Regan and Sarah Connolly and Spencer West LLP in London.
Renatus Comment: This marks CCR’s second acquisition as it acquired The Relocation Bureau, an Irish-based relocation business in 2019. This deal presents additional expansion opportunities for CCR as it will gain access to new UK-based prospects. Ireland consistently ranks among the top countries in the world in which to do business, supporting FDI growth. According to the IDA, it is 3rd ranked globally for high-value FDI projects.
Source: Regan Wall
DEAL UPDATES & OTHER NEWS
Ørsted acquires second Irish solar project
Deal Details: Ørsted has completed its second Irish solar project acquisition. The new project is with developer Terra Sola and includes Garreenleen solar farm in Carlow which has the ability to add 160MW, powering up to 56,000 homes. Ørsted ranks as the world’s most sustainable energy company in Corporate Knights’ 2021 index of the Global 100 most sustainable corporations in the world and is recognised on the CDP Climate Change A List as a global leader in climate action.
Source: Irish Examiner
Lunn’s Jewellers (“John H. Lunn Jewellers Limited”) is a family run jewellery business based in Belfast. The business has been in operation for over 60 years and it is majority owned by Peter and Jacqueline Lunn.
In its financial year to February 2022, the business generated a turnover of c. £27.1m, an increase of c. 75% year-on-year. This converted to an EBITDA of c. £2.9m, an increase of c. 54% year-on-year. EBITDA improvements are due to increased gross margins and reduced overheads as a proportion of revenue.
Significant post-EBITDA cash movements include payments to acquire tangible assets of c. £1.1m and loan repayments of c. £0.9m. The business finished the year with a cash balance of c. £1.3m, a £0.8m year-on-year increase.
The business employed an average of 93 people in FY22 at a total cost of c. £4.4m.
Parklands Holiday Park (“O’Loughlin Holiday Park Ltd”). is an operator of a holiday park and seller of mobile homes in Co. Wexford. It is principally owned by Thomas O’Loughlin and Yasmin O’Loughlin.
In its financial year to December 2021 the business generated a turnover of c. €8.0m, an increase of 8% year-on-year. This converted to c. €3.4m EBITDA, an increase of 133% year-on-year. The increase in EBITDA was driven by improved gross margin and the realisation of operating leverage in the business.
The business finished the year with a cash balance of c. €1.2m, a c. €1.0m increase on FY20. Significant post-EBITDA cash movements included working capital investment and payments to acquire tangible assets.
The business employed an average of 112 people during the period at a total cost of c. €0.9m.
Who: Amarenco, a Cork-based solar energy business.
What: The business has secured €300m in funding led by Arjun Infrastructure Partners.
Why: The funding will be used to support growth.
Advisers: Holmes led by Stephen Walker, Ciara Downes and Rachel Jones (Corporate team) and Kevin Harty (Banking & Finance team).
Who: Zirkulu, an outdoor apparel company founded by Jack Norman and Fionn McCarthy, which is based in Cork.
What: The company has raised €250,000 which can be matched by Enterprise Ireland and Local Enterprise Office grants.
Why: The company will use the funding to expand its brand with Irish and UK retailers as well as growing its online presence in Europe and North America.
Source: Business Plus
Who: Fire1, a Dublin-based Medtech company focused on improving outcomes for people living with chronic diseases.
What: The business has closed a $25m funding round led by Andera Partners and Novo Holdings.
Why: The capital will be used to accelerate the development of its novel remote monitoring solution to improve outcomes for heart failure patients.
Advisers: Arthur Cox led by Sophie Frederix (Corporate and M&A) and included Tim Gleeson, Sarah O’Reilly and Susan O’Leary (Corporate and M&A) and Olivia Mullooly (Technology and Innovation).
Source: Arthur Cox
Who: Vivasure, a Galway-based Medtech company founded in 2009 which has developed a synthetic polymer implant called PerQseal.
What: The business has secured €30m of funding from Boston-based Haemonetics, bringing its Series D fundraising round from last year to a total of €52m.
Why: The funds will be used to launch a study to prove the low complication rate and high technical success of PerQseal.
Source: Business Post
Who: Apexx, an Irish co-founded payments platform that combines acquirers, gateways, shopping carts and alternative payment methods into a single API connection.
What: The business has raised $25m in funding led by MMC Ventures.
Why: The fundraise will be used to further develop its technology and expand its presence in North America.
Source: Business Post
Who: CurrencyFair, an Irish peer-to-peer currency exchange marketplace.
What: The business has secured $10m in venture debt.
Why: The venture debt will be used to sustain organic growth for the business.
Source: Business Post
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 European Central Bank’s increase of euro zone interest rates on the 16th of March. According to @RTE
The annual rate of inflation in February 2023. According to @CSO
The year-on-year increase of individuals employed in the Accommodation & Food Service Activities sector at January 2023. According to @CSO
The reduction in the number of new cars licensed in February 2023 compared with February 2022. According to @CSO
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