Renatus’ Weekly M&A Newsletter – 12/06/2022
June 12, 2022Renatus’ Weekly M&A Newsletter – 26/06/2022
June 26, 2022
Renatus Weekly M&A & Company Performance Private Equity Newsletter 19/06/2022
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
THOUGHT OF THE WEEK
To continue our theme in recent weeks of looking at the glass as half full as opposed to half empty, there are lots of positives for the Irish public’s finances.
1. In a clever move by the NTMA, the most recent €47bn debt raised by Ireland is locked in at 0.22% at a weighted maturity of 12.6 years. If the Irish government were to buy a ten-year bond today, it would cost 2.5%. Less than 15% of total bonds mature in the next three years.
2. Inadvertently, we could get a windfall of up to €20bn if the Apple Corporation case goes against Apple and the European Commission come out with the eventual result they are seeking. Ireland is not seeking this and values the Apple relationship higher but it could hop our way. Apple has €13bn in escrow pending the outcome. On the same theme, we continue to get the benefit of extra corporation tax from the giants which has surprisingly boosted our coffers in recent years.
3. We have historically looked on with envy at the oil-rich Nordics and the Middle East pumped oil and printed money. Our ownership of our patch of the Atlantic Ocean and other surrounding waters could yield huge dividends as the world shifts to renewables. Where better to generate it than off the coasts of Ireland which could result in billions upfront or annually depending on how we monetise our resource.
M&A ACTIVITY
Tricel acquires MID GlassFibre Supplies
Deal Details: Tricel Composites, part of the larger Tricel Group, has acquired Dublin-based MID GlassFibre Supplies.
The Tricel Group, which has its headquarters in Killarney, comprises of 12 companies across Europe, with six manufacturing operations. It manufactures composite, fiberglass and glass-reinforced plastic products. The business is led by managing director, Mike Stack and is owned by the Stack family. It does not report turnover or EBITDA information and empoys c. 600 staff.
MID GlassFibre Supplies (T/A Marine & Industrial Distribution) supplies fibre glass and ancillary materials to a customer base including roofing contractors, government departments and boat owners. It is based in Dublin and owned by Liam & Jacqueline Phelan. It does not report turnover or EBITDA information.
Advisers: None mentioned.
Renatus Comment: This acquisition is Tricel’s third in 2022, having acquired Biokube A/S and AJ Environment in the last three months.
The acquisition represents a focus on cementing Tricel’s position as an industry leader in Ireland, with the last two acquisitions having focused on the business’ expansion in mainland Europe.
Source: Irish Examiner
Pexlify acquired by Merkle
Deal Details: Dublin-based Pexlify has been acquired by Merkle. Deal details have not been disclosed.
Pexlify was founded in 2015 and employs 150 staff across offices in Dublin, London and Frankfurt. Its clients, which include insurer AA, New Ireland Assurance, Volkswagen Financial Services and Funding Circle, use it to integrate their existing tech set-ups with Salesforce. Based in Dublin, the business had FY21 turnover of c. €13.4m, which converted to an EBITDA of c. €3.5m. The business’ largest shareholders are Stephen Lambert and Russel Keenan.
Merkle is a customer experience transformation business partner. The business’ focus is in the areas of CX consulting, data transformation, and digital transformation. It operates as a subsidiary of Dentsu Group. The Dentsu Group had FY21 revenues of c. €7.6bn, which converted to an EBITDA of c. €1.4bn.
Advisers:
Pexlify
Legal: Kieran Regan and Deirdre Potenz of ReganWall
Corporate Finance: Equiteq led by Jerome Glynn-Smith and Emmanuel Kostucki.
Tax: BDO
Renatus Comment: Large digital agencies and consulting companies see digital enablement consulting services as a major growth area as they look to be partners to businesses as they build out their organisational software stack. This acquisition appears to fit within this trend.
In Ireland, we have seen evidence of this with some of the larger consulting practices demonstrating their focus on digital services. In March of this year, EY acquired Client Solutions, a domestic enterprise technology firm to sit within EY’s consulting arm while in 2020, Deloitte acquired Irish cloud services provider DNM, to name just two.
Source: Pexlify Press Release
PIB acquires Fingal Insurance Group
Deal Details: PIB Group Ltd has acquired Fingal Insurance Group. Deal details have not been disclosed.
PIB Group Limited offers insurance brokerage services, providing advisory, analytics, claims management, premium funding, and risk management solutions. The business is based in London and owned by Paisley EquityCo. It had FY20 turnover of c. £152m, which converted to an EBITDA of c. £24m. It is led by CEO, Brendan McManus.
Fingal Insurance Group is one of Ireland’s leading commercial insurance brokers known for its expertise in the construction and transport sectors. It is based in Dublin and had FY21 turnover of €2.7m. It is led by Managing Director, Conor McCarthy.
Advisers:
PIB Group
Legal: A DLA Piper team of Matt Cole, Dara McDonald and Maria Hickey.
Fingal Insurance Group
Legal: Power & Co.
Renatus Comment: Consolidation has been the major theme of the insurance space for some time now, with PIB proving very active.
Prior to the announcement of this acquisition, PIB has announced 6 acquisitions in 2022 alone, following a total of 10 in 2021. Of these, 4 have been Irish deals, with PIB acquiring Alan Tierney & Partners, Campion Insurances, Oliver Murphy Insurance, and Creane & Creane Ltd.
Source: PIB Press Release
COMPANY PERFORMANCE
Mulllingar Autos Limited is a motor dealership supplying Volkswagen, Skoda and FIAT vehicles. The business is based in Westmeath and owned by James, Eugene and Daniel Bourke.
In its financial year to December 2021, Mullingar Autos had a turnover of c. €18.2m, a 25% increase year-on-year. This converted to an EBITDA of c. €1.1m, a rise of 88.1% year-on-year. This is largely attributable to an improvement in gross margins from 7.6% to 9.8%.
The business finished the year with a cash balance of c. €2.9m, an increase of c. €1.0m year-on-year. Mullingar Autos employed an average of 33 people at an annual cost of c. €1.5m.
Diamond Glass Limited is a glass processing company delivering high-quality glass products for a range of high-end corporate and residential clients. The business is based in Dublin and owned by Patrick Carolan, Michael Kelleher and James Crumlish.
In its financial year to March 2021, Diamond Glass reported turnover of c. €11.7m, a decrease of 16.3% year-on-year. However, this converted to an EBITDA of c. €1.0m, an 8.8% increase year-on-year. The rise in EBITDA is largely attributable to an improved gross margin, rising from 50.5% to 53.7% year-on-year.
The business finished the year with an overdrawn cash balance of c. €300k, but generated c. €677k of cash over the year. Significant post-EBITDA cash movements included a property acquisition, along with an inflow of cash from two new loans. The business employed an average of 85 people over the year at an annual cost of c. €3.1m.
RECENT FUNDRAISINGS
Who: BloXmove, a shared B2B mobility blockchain platform, has raised funding.
What: The business has reportedly raised funding at a post-money valuation of €14m. The identity of the investors was not disclosed.
Why: The funding will be used to further develop the business’ technology.
Source: CapitalIQ
Who: Chrysea Limited, a biotechnology company based in Dublin.
What: The business has raised €3.7m in a funding round led by PME Investimentos.
Why: The funding will be used to develop and commercialise one of Chrysea’s core products.
Source: CapitalIQ
Who: Act Venture Capital, the Dublin-based, technology-focused VC fund.
What: The business has raised a €140m fund to focus on early-stage technology companies.
Why: The funding will be used to make investments of up to €10m into around 35 companies.
Source: Irish Times
Who: Pitchbooking, a Belfast tech company operating a platform that enables the instant, online booking of sports facilities.
What: The business has raised £500k in funding from Vertex Albion Capital and Co-Fund NI, among others.
Why: The funding will be used to create new jobs within the business, with the aim of doubling the team over the first year post-investment.
Source: Belfast Telegraph
Who: Webio, a Dublin-based start-up whose AI platform helps credit and payments businesses across Europe to communicate with customers.
What: The business has raised $4m in funding in a Series A funding round led by Finch Capital.
Why: The investment will be used to grow the business’ R&D team, and expand its customer success and sales & marketing team.
Advisors: On legals, Philip Lee, led by Eoghan Doyle and Andrew Tzialli, alongside Hugo Grattirola and Patrick Egan.
Source: Business Post
Who: Swoop, an online platform designed to simplify access to loans, grants and equity funding for SMEs. The business was founded inn 2018 by Andrea Reynolds, daughter of former Taoiseach Albert Reynolds, and Ciaran Burke.
What: Swoop has raised close to €10m in a Series A funding round at a valuation of €30m. €3m was raised from RBS in the UK, and €6.3m was raised from Arab Bank Ventures, US fund WeHo Ventures, VC fund Velocity and the firm’s seed investors, as well as Italian angel fund IAG.
Why: It is reported that the business plans to scale into the US, Canada and Australia.
Source: Sunday Independent.
Who: Papercup, a speech recognition business that uses AI to dub videos with high accuracy. The London-based business was founded by Founded in 2017 by Jesse Shemen and Jiameng Gao.
What: The business has raised c. $20m in funding in a round led by Octopus Ventures with participation from Sky, Guardian Media Ventures, John Collison of Stripe, and Des Traynor of Intercom along with other investors.
Why: The funding will be used to continue research and development of Papercup’s technology.
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.
@RenatusCapital Tweets
34%
The proportion of Ireland’s electricity provided by wind energy in May, up 9% on May 2021. According to @WindEnergyIRL
26%
The average rise of Irish family farm income in 2021, amounting to an income of €34,300. According to @teagasc
177.8%
The rise in the price of fertiliser in April 2022 when compared to the same month last year, according to @CSOIreland
29%
The current number of people in energy poverty in Ireland, exceeding the previous record of 23% in 1995. According to @ESRIDublin
14.2%
The national rise in the Residential Property Price Index in the twelve months to April 2022. Prices in Dublin alone rose 11.5%. According to @CSOIreland
4.7 million
The number of passengers which passed through the five main airports in Ireland in Q1 2022. This is more than 11 times that of Q1 2021. According to @CSOIreland
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ABOUT RENATUS
Renatus was 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:
- Succession planning
- Management buyouts
- Management buy-ins
- Growth financing – both organic and acquisition growth financing
- Full and partial share sale.
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