Dear Reader,
You are receiving this mail every week as we see you as a key partner and we look forward to continuing to enjoy our journey with you over the decades ahead.
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
Thanks to all of you who participated in our survey.
The survey, which gathered almost 1,000 responses, ran from last Sunday to Tuesday evening. 78% of respondents were business owners or senior management.
The highlights from the survey are as follows:
1. Cumulatively, over 85% of people expect that we will be fully or partially back to office-based working by the end of the July.
2. Despite expecting a partial easing of restrictions by the end of the Summer most people (70%+) don’t expect a return of mass gatherings until at least September.
3. There is a definite expectation of increased remote working post-Covid-19 with over 75% of respondents expecting increased remote working and 85% of respondents expecting to use online video solutions more.
4. Only 18% plan to travel significantly less.
5. More than half (58%) of respondents expect business performance in 2021 to either be a little or significantly worse versus their 2019 business performance.
6. Meanwhile, 28% of respondents expect 2021 performance to outpace that of 2019 while 14% are expecting performance to be similar.
More details on responses are on link below.
https://go.renatus.ie/e/
Deal Details: E-learning company Logicearth Learning Services has been acquired by Huntsworth plc subsidiary, The Creative Engagement Group (TCEG). Financial details of the deal were not disclosed.
Dublin and Belfast-based Logicearth provides blue-chip companies with online training programmes to drive business performance from within.
TCEG, owned by Huntsworth plc., is a multidisciplinary communications business that provides a number of services, including employee engagement, event marketing, training and interactive content.
Huntsworth itself is currently in the process of being acquired by PE firm CD&R in a deal reported to be valued at £524m (€600m). Huntsworth is a London-listed healthcare and communications group, whose other businesses include PR firm Grayling.
Advisers: None mentioned.
Renatus Comment: This acquisition represents a huge success for both Peter Carlin and Paul McKay, who set up the business back in 2009 and have since grown to a team of 25 people across two locations – Dublin and Belfast. The acquisition looks to be a classic example of the founding shareholders monetising some of their success while the purchaser is backing a strong management team and looking to drive on growth as both Peter and Paul will stay on and continue to lead the business while joining The Creative Engagement Group’s leadership team.
Given the current circumstances, it is likely that a business of this nature has a real chance to drive on and grow, potentially both during and after the Covid-19 crisis, as more and more people look to online resources to help drive on the growth of their business.
Source: Huntsworth Press Release
Deal Details: Businessman, Larry Goodman, is increasing his shareholding in the Blackrock Clinic to 84%. Mr. Goodman is buying out Dr George Duffy’s 20% stake in the clinic. .
Goodman previously bought a 28% stake in the Blackrock Clinic from one of the co-founders, Joe Sheehan. It is reported that Goodman is also in a separate process to buy-out the shareholders of the Hermitage clinic and has also recently acquired 100% of the Galway Clinic.
Dr George Duffy is one of the co-founders of the Blackrock Clinic. The remaining 16% of the Blackrock Clinic is owned by another co-founder, surgeon Jimmy Sheehan.
Advisers: None mentioned
Source: The Sunday Times
Stobart Air is reportedly to be acquired by Stobart Group
UK’s Stobart Group is reported to be considering buying Aer Lingus Regional service operator Stobart Air following its holding company Connect Airways falling into administration in March 2020.
It is reported that the UK’s Stobart Group would look to buy a 49% stake in Stobart Air from accountancy firm EY, which is the administrator to UK-based Connect Airways. Stobart Air is part of Connect. The other 51% of Stobart Air is owned by its more than 400 staff.
Connect Airways is 30% owned by the listed UK Stobart Group. Virgin Travel Group, a subsidiary of Virgin Atlantic, also has a 30% stake, while US firm Cyrus Equity Partners owns 40%.
If Stobart Group could buy the 49% stake in Stobart Air from EY, it might be able to prevent the carrier from falling into examinership here.
Source: Independent
Interim examiner appointed to CityJet
Details: The High Court has confirmed the appointment of an interim examiner to CityJet.
The Dublin-based regional airline, best known for its flights to London City Airport, employs 1,175 people with more than 410 who are based in Dublin.
Kieran Wallace of KPMG has been appointed as interim examiner to CityJet DAC.
The judge mentioned that while the company was insolvent and unable to pay its debts, it does have a reasonable chance of surviving, granted certain steps are taken. The steps include a successful restructuring of the airline as well as an arrangement with the company’s creditors. CityJet has already implemented cost-cutting measures which it expects to save millions of euro.
Wallace now has 100 days since his appointment to complete a “complex” process.
Source: RTE News
Free Now plans to merge with French app Kapten
Free Now, previously known as My Taxi, a taxi app run by Daimler and BMW announced a corporate restructuring and plans to merge with French app Kapten.
The Free Now company said in a statement that its restructuring was aimed at reducing costs in order to offset the hits to its business caused by the coronavirus crisis, which has hurt transport companies around the world.
Source: Irish Times
Flutter and Stars merger approved by CCPC
The proposed merger of Flutter Entertainment plc and The Stars Group Inc., has been cleared by the Competition and Consumer Protection Commission.
The deal, expected to be finalised in 2020, has been cleared by a number of other countries’ regulators and still needs to win approval of Flutter and Stars Group shareholders.
Source: CCPC
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.
ASA appoints new board member
Kyla O’Kelly has joined the board of the self-regulatory body Advertising Standards Authority for Ireland. Ms O’Kelly is also currently a board director at advertising agency Javelin Group. She is also a board director for the Young Social Innovators, a charity working with young people in schools. Prior to Javelin, she worked in Brussels training at the European Commission, followed by a communications role at an independent EU public affairs conference specialist.
Hibernia REIT appoints Head of Sustainability
Neil Menzies has been named as sustainability manager with Hibernia REIT, which owns and develops property and specialises in Dublin city centre offices. Mr Menzies will lead the firm’s sustainability strategy, cutting energy consumption and water usage across its property portfolio. He joins from Transdev, operator of the LUAS, where he was environment and sustainability manager.
New CIO appointed at Initiative Ireland
Declan O’Brien has been appointed as chief investment officer with property finance and impact investment firm Initiative Ireland, which helps investors to co-fund the construction of energy-efficient social and affordable housing projects nationwide. Mr O’Brien has over 25 years of investment management experience, working in senior management roles at international banks such as JP Morgan, HSBC, and BNP Paribas. As group CEO of the Barak Fund Management, a trade finance and private debt fund management company based in Mauritius, he grew the business from $100m into $1bn of assets under management. Initiative Ireland is based at NovaUCD and is supported by Enterprise Ireland.
ILIM appoints Head of Responsible Investment
Kathy Ryan has been named as head of responsible investment with Irish Life Investment Managers. A senior sustainable investment specialist, Ms Ryan is experienced in environmental, social, and governance factors in investments. She joins from Aviva Investors, where she was a product strategist in the same field. She has also been an executive director at Global Green Investments. Ms Ryan has also worked with the World Bank, attracting private capital for renewable energy projects. She has also advised the European Commission on green bond development and carbon tracker and the UN Principles for Responsible Investment on climate risk.
BHSM makes Senior appointment to Private Clients Team
Trea McGuinness has been appointed as a Senior Associate of the Private Clients Team in BHSM. Trea specialises in the areas of Wills and estate planning, Trusts and the administration of estates. She advises domestic and international clients, both private and professional, in the administration of estates and on related taxation and any resulting litigation.
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.
Pharmapac Holdings Limited, which is registered in Co. Armagh, and trades as PharmaPac. The company also has operations in England based out of Birkenhead. The business is a pharma packaging specialist which provides turnkey solutions including manufacturing, filling and packing of pharmaceuticals. The financial year to June 2019 was a transformative year for the business as revenues rose by 177.1% to c. £63.7m while EBITDA increased by 187.0% to c. £6.5m. The growth was driven by a strategic pivot into e-liquid sales as PharmaPac developed into a full-service manufacturer, packer and distributor to the e-cigarette or vaping industry. This increased business came with lower gross margins, which was 22% in 2018 and 17% this year. EBITDA converted to a net cash increase of c. £931k after c. £1.8m was spent on fixed assets, primarily plant and machinery likely to do with the business pivot. Working capital also acted as a significant draw on cash. PharmaPac is owned by Elliot family members Geoffrey, Mark and Keith along with Andrew Sampson and John Pugh.
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Nostra Technologies Limited, which trades as Nostra, is a managed services provider based in Dublin with services including: Managed Print Services; SharePoint; Cloud Solutions; Disaster Recovery; Security Training; Latest Cyber Threat Information; Hardware; Consulting. The company had a strong year in FY19 which saw revenue increase by 21.3% to c. €11.2m while EBITDA increased 75.6% to c. €0.9m. The jump in EBITDA was largely due to the well managed cost of sales during the year despite the increase in turnover, in turn, increasing gross margins. The company employed an average of 72 employees in FY19 at a cost of c. €3.8m. There was a net cash increase during the year of c. €235k after working capital movements consumed c. €650k of cash while the company also received c. €210k from the disposal of fixed assets. Cash on the balance sheet stood at c. €800k.
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J.J.F. Limited, which trades as Fields Supervalu, is a supermarket, coffee shop and bakery group located in Skibbereen, Co. Cork. Despite a marginal increase in turnover by 3% to c. €26.2m in FY19, EBITDA declined by nearly 10% to c. €1.1m versus the prior year. Roughly 96% (c. €25.1m) of revenue comes from the operation of the Supervalu store with the remaining 4% (c. €1.1m) coming from the bakery operation. The decline in EBITDA can be traced to a slight deterioration in gross margins to under 27% coupled with a c. €250k increase in administrative expenses. The business employs 257 staff at an annual cost of c. €4.8m. Roughly €1.7m of CapEx was spent during the period, c. €1.4m of which went into freehold land and buildings. Cash decreased by c. €840k during the period to end at c. €1.83m against a closing debt balance of nil. The group is 100% owned by the Field family.
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Who: Stripe has raised additional funding.
What: $600m (€552m) funding round, which now values the company at almost $36bn (€33bn) on a ‘post-money’ basis, is being raised from US-based venture capital investors including Andreessen Horowitz, General Catalyst, GV, and Sequoia.
Why: The additional cash is being raised for increased product development, global expansion and strategic initiatives.
Source: Independent
Who: Avectas, an Irish medtech company that hopes to revolutionise the treatment of cancers, has raised funding.
What: $20m (€18.3m) funding round is led by serial entrepreneur Séamus Mulligan. Mr Mulligan is already the largest shareholder in Avectas, having led a $10m investment round for the business last year with Eunan Maguire and David Brabazon, who have both increased their investment in the latest funding round. The other investors are Mary Martin and Barry Leonard.
Why: The funding will allow Avectas to add up to 10 people to its existing 29-strong workforce and to see the company through to commercial operation.
Source: Irish Times
Who: Screen Ireland announced additional funding.
What: €2m boost to its initial budget of €1m for slate funding, regarded as the screen industry’s equivalent of R&D, from Screen Ireland’s capital budget of €17.2m.
It will also receive an additional €1m in enhanced development supports for feature film, television and animation.
Why: The aim is to help production companies develop a strong slate of projects so that the industry is as well-placed as possible to scale-up production activity when the crisis is over.
Source: Irish Times
Who: Early-stage investor National Digital Research Centre (NDRC) unveils accelerator programme for six start-ups.
What: Each successful Dublin-based venture will get an investment of up to €130,000, of which €100,000 is cash.
Why: The support is for transforming a start-up from an idea into commercially investable business.
Source: Irish Examiner
Who: Hibergene Diagnostics, a portfolio company of the Bank of Ireland Kernel Capital Funds, secures funding.
What: €1m comes from the EU Funding. This is the 18th programme EU is supporting following its recent call for research and innovation into Covid-19.
Why: The funding is for developing ‘Hg nCoV19’ test, a rapid diagnostic test, which is expected to deliver results within 60 minutes.
Source: Kernel Capital
Who: Dublin-based Reagent Genie, who is known for being the maker of a 15-minute Covid-19 test, has received backing from Peter Trill, a Scottish health and biotech investor who sold Iomet Pharma to Merck in 2016.
What: The amount has not been disclosed but it is understood that Reagent Genie raised a Series C round of funding in December and it is reported that the firm had not previously raised more than €10m.
Why: The company distributes and sells antibodies, Elisa kits and assay (testing) kits – including the one for Covid-19 – and it is expected that funding may go towards progressing the Covid-19 testing kit as well as growing the business with new partners in Indonesia, Russia, New Zealand, Israel and Switzerland.
Source: Sunday Independent
Who: Renewal Diary, a tech start-up which helps its users manage utility, broadband and insurance contract renewals, is preparing for a funding round.
What: The company is seeking to raise €500k to bring its total amount it has raised to over €1m.
Why: The funds are expected to be used to help grow its user base to one million and boost its employment number to 12.
Source: Sunday Independent
Who: Dublin-based SoapBox Labs, an award-winning AI company specialising in the development of automated speech recognition (ASR) for kids has secured funding.
What: The company has raised €6m in funding.
Why: The reasons for the funding have not been disclosed but it is understood that investors include the US angel investment group Astia Angels and Dublin-based Elkstone Capital.
Source: The Sunday Times
Who: Echelon, an Irish data centre developer founded by Dublin property Developer Niall Molloy, has sold a 15% stake of the data centre to company to Pioneer Point Partners.
What: The financial details have not been disclosed but Pioneer Point Partners are due to take a 15% stake in the data centre business while Nimol Holdings, Niall Molloy’s company, will retain an 85% stake in the company.
Why: The funding is expected to help progress civil works and the building of substations and power connections at the Clondalkin site, with the proposed 100MW data centre scheduled to be up and running next year.
Source: The Sunday Times
Without stating the obvious and while the current shutdown is unprecedented and plenty of people are economically hurt, there seems to be a feeling among the business community of a kind of a calm ahead of a storm. There is currently economic life support from Governments for many people and corporates. Many are scared to think about the twilight period between a release of lock down and resumption of full speed economy via vaccine or other means. As fixed costs return, government support may disappear and top line revenue may not appear.
Two quotes from two different articles in yesterday’s FT suggested same and the fear of this:
– Hakan Samuelsson, chief executive of Volvo Cars, said the following:
“It’s easy to shut down, it’s much more complicated to open up,”
– Another CEO of a small retailer told the FT:
“Month by month, my P&L looks worse in the six months after lockdown than it does for the three months of it”
80%
The number of Northern Ireland’s firms that are planning to use the Government’s job retention scheme to furlough staff, according to the survey carried out between April 8 and 11.
@BelTel_Business
4.2%
The year-on-year increase in the number of passengers passing through the main Irish airports for 2019 amounting to 38.1m passengers, according to @CSOIreland
43,400
The number of Irish employers that have so far (April 15th) registered for the new Temporary Wage Subsidy scheme, according to the Government. @irishexaminer
42.6
The KBC Bank Ireland’s consumer sentiment index for April 2020 falling from 77.3 in the previous survey conducted between March 3-10 signalling the sharpest decline since the survey began.
@irishexaminer
7% & 7%
The year-on-year decrease in the Irish goods exports and increase in the imports, respectively, for February 2020 amounting to €11,600m & €6,991m, according to @CSOIreland
€1.3bn
The Irish government surplus for 2019, up from €0.4bn in 2018. This represents 0.4% of Irish GDP. @CSOIreland
4.8%
The year-on-year decline in the volume of goods travelling through Dublin Port for Q1 2020 down by 470K tonnes vs Q1 2019, according to the Dublin Port Company. @IrishTimesBiz
94.86%
The year-on-year drop in the new car registrations for the first 9 days of April 2020 amounting to 118 registered compared to 2,296 cars registered for the same period in 2019, according to @IrishTimesBiz
2.6% & 2.6%
The year-on-year increase in the Irish agricultural price output and decrease in the input, respectively, for February 2020, according to @CSOIreland
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