Renatus Weekly M&A & Company Performance Private Equity Newsletter 19/12/2021

Deal Details: Agilitas, the pan-European mid-market private equity firm, has backed the buyout of Prodieco Advanced Engineering Solutions. The transaction details were not disclosed.

Dublin-headquartered Prodieco, founded in 1962, is the largest independent global provider of high-performance blister tooling change parts for the pharmaceutical industry.

Prodieco employs over 230 highly skilled people globally and provides its products and services to customers in over 55 countries across multiple continents.

Agilitas, headquartered in London, was founded in 2011 by a team of former colleagues. The firm’s main targets are mid-market businesses with enterprise values between around €50m and €300m across Western Europe in a range of sub-sectors such as environmental technologies and services, education or essential infrastructure.

Advisers:
Prodieco Advisers:
Grant Thornton- Paddy Dillon, Ann-Marie Costello, David Cole and Michael Hogan.
McCann Fitzgerald provided legal advice.

Agitas Advisers:
Deloitte- Jan Fitzell, James Toomey and Aine Sheehan.

Renatus Comment: Prodieco was acquired by the late Robin Rennicks, a serial entrepreneur in 1999. The business has grown exponentially under the stewardship of Robin, his wife Maureen and his sons Andrew and Conor who grew the business internationally where it now serves customers in 55 different countries. Agilitas has had an extremely active 2021. The pan-European private equity player closed its third fund which amounted to €565m earlier in the year. Prodieco is its fourth deal since this new fund was launched.

Source: Agilitas Press Release; PENews.com

Deal Details: Phoenix Labs has acquired RiceSteele for an undisclosed sum.

RiceSteele is one of Ireland’s leading manufacturers of OTC pharmaceutical products. It is best known for its range of paediatric analgesics and a range of effervescent multivitamin products. It has a manufacturing focus, producing own-brand products, and providing contract manufacturing services from its Dublin manufacturing facility. Prior to the deal, the business was owned by John McCormick and Brice Pharmaceuticals Limited.

Phoenix Labs is an integrated healthcare company operating in the prescription and OTC market segments. Its products are marketed globally, including countries across Western Europe, Scandinavia, the UK, and Eastern Europe. The business had turnover of €27.8m in FY20. The business is owned by Larry McGowan.

Advisers:
RiceSteele advisers:
IBI Corporate Finance- Raymond Donegan and David Banks.

Renatus Comment: Pharmaceuticals, medical, and biotech have been the second-largest sector for M&A, by value, in Ireland during H1 2020. Phoenix Labs was founded in 2000 and has become one of the biggest players in the pharmaceutical space with Uniflu, Eputex, Arthrimel, Bloateze, Casacol, Paracetamol and Nasosal in its stable of OTC brands. The business also produces a variety of prescription products.

Source: IBI Corporate Finance Press Release

Deal Details: Meteor Mobile Communications Limited is to acquire certain assets of Synchro Managed Services Limited. Deal details have not been disclosed and the deal is subject to approval by the Competition and Consumer Protection Commission.

Meteor is a subsidiary of Eircom Limited. Eircom Limited is owned by the eir group, providing a range of voice, broadband, and television services to retail, residential and enterprise customers.

Synchro Managed Services has been operating and managing a network of eir branded retail outlets, previously branded as Meteor, for eir since 2011. Synchro Managed Services had a turnover to March 2020 of €28.1m. Synchro Managed Services is owned by Brendan O’Hagan and Ian Gavin.

Advisers: None mentioned.

Renatus Comment: Synchro was established in 2010, in a partnership with eir and is currently operating 41 eir stores around the country, to provide service and support to customers at a local level. As retailers increasingly move their presence online following changes in consumer trends during the pandemic, eir’s focus on their physical retail presence demonstrates that they still consider it to be a key route to market, with online sales not being fully substitutable for the in-person services which many broadband and phone customers require.

Source: CCPC

Deal Details: MML Growth Capital Partners has acquired a minority stake in Dublin-based, Cruinn Diagnostic for a reported €12m. The deal is subject to approval from the Competition and Consumer Protection Commission.

MML’s investment is being made through the MML Growth Capital Partners Ireland Fund 2. The €145m fund is backed by the Irish Strategic Investment Fund among others.

Cruinn Diagnostics, established in 1998 and based in Dublin, is one of Ireland’s leading suppliers in the laboratory, medical and healthcare markets. Its product portfolio includes a range of diagnostics including Clinical Chemistry, Immunoassay, Haemotology, Microbiology, Auto Immune Seroology and Real Time Molecular Diagnostics. The business is led by Jack Nolan, Managing Director, who co-founded the business with Vincent Foley and Peter Hussey. The business delivered average revenues pre pandemic of €20m in FY 18/19. This increased to €32m in 2021.

Advisers:
​​​​​Cruinn advisers:
Focus Capital Partners- Alan Kelly, Paddy Dooley and Dermot Brennan.
William Fry provided legal advice.

MML advisers:
Dillon Eustace provided legal advice.
Deloitte provided financial and tax due diligence,
PwC provided commercial due diligence.

Renatus Comment: This investment is MML’s third in the last 16 months, following investments in CG Power and Natural World Products. MML has enjoyed successful exits from its first fund including Lowe, H&MV, Ashdale, Sonas and Identigen.

Source: Irish Times

Deal Details: DCC, an Irish energy and services group, has acquired Almo Corporation for a reported $610m (€542m), on a cash-free debt-free basis.

DCC plc is a leading international sales, marketing, and support services group, based in Ireland. It operates through four divisions: LPG, retail & oil, healthcare, and technology. The group is led by CEO Donal Murphy. DCC plc had revenues to March 2021 of €15.6bn, which converted to an EBITDA of €791.5bn.

Philadelphia-based Almo was founded in 1945 by the Chaiken family, who have owned and operated the business for the last 75 years. It is led by CEO Warren Chaiken. Almo is one of the largest Pro AV businesses in the US and is a leading distributor of consumer appliances, consumer electronics and lifestyle products. In its financial year to April 2021, the business had revenues of $1.3m, which converted to an EBITDA of $75m.

Advisers: None mentioned.

Renatus Comment: DCC has announced 12 deals during 2021, across the US, Europe, and the UK. The group is increasing its North American focus and the Almo acquisition is a prime example of this. The combined entity will become the leading, specialist, Pro AV business in North America, significantly expanding DCC’s technology arm.

DCC is trading below the 10x Enterprise Value to EBITDA which is hard to understand relative to other plcs given the quality of management and earnings.

Part of the acquisition rationale may be the ESG drive and DCC’s fossil fuel interests. However, DCC’s Technology and Healthcare units are growing and it is focusing on positioning its Energy Division to show improvements in sustainability positioning.

Source: DCC Press Release

Deal Details: American car rental agency giant, Enterprise Holdings has announced its plans to acquire Dublin-based Walker Vehicle Rental through an Irish subsidiary. The deal consideration has not been disclosed and is currently subject to regulatory approval.

Walker Vehicle Rental was founded in 1991 and operates from six locations throughout Ireland including Dublin, Cork, Wexford, Limerick, and Antrim. The business employs c. 70 people and has a fleet of c.1,300 commercial vehicles. Walker Vehicles operating company, Eastcrest Ltd reported a turnover of c. €22.6m in 2019. Following completion of this acquisition, Walker will operate as part of Enterprise Flex-E-Rental Division.

Enterprise Holdings was founded in Missouri in 1957 and today operates under the brands Enterprise Rent-A-Car, National Car Rental, and Alamo Rent a Car. The business reported revenues of c. $22.5bn in 2020. Enterprise entered the Irish market in 1997 and operates from 24 locations throughout Ireland employing c. 200 people.

Advisers: None mentioned

Renatus Comment: Enterprise is a global player in the vehicle rental space and is an active acquirer having invested over $2.7bn on acquisitions throughout the past ten years. This is the business’s second transaction in the Irish market, following the acquisition of Dooley Car Rentals in 2017, a similar-sized business focused on general consumer car rentals. Acquiring Walker, a commercial vehicle-focused business, is a clear move to develop their alternative vehicle offering in the Irish market.

Since the business was acquired in 2004 by Declan Malone, Francis Cunningham & Dave McCormack, Walker has experienced steady yearly growth with a small drop in revenue in 2020, likely resulting from COVID disruptions.

Source: Enterprise Press Release

Deal Details: Nostra, a leading Managed I.T service provider has acquired Dublin-based Enclave Technologies for an undisclosed amount.

Nostra, headquartered in Dublin 12 and led by CEO Kevin O’Loughlin, specialises in outsourced IT for over 280 companies with 600 offices supported in 18 countries around the world. Following the acquisition Nostra will employ 200 people.

Nostra has the highest accreditations with leading innovators and is a provider of services and software created by the most successful names in global technology (Microsoft Gold Partner, SonicWall Platinum Partner, Datto Blue Diamond Partner).

Enclave Technologies is a supplier of IT support and IT managed services, providing end-to-end IT services to some of the most familiar businesses and brands in the country. Enclave’s 20 employees will join the existing Nostra team. Peter Hennessy was the sole owner of the business.

Advisers:
Nostra’s advisers and finance partners:
Grant Thornton deal advisory- Gareth Cosgrave.
McCann FitzGerald- legal adviser.
BCA Tax Advisors- tax adviser.
Bank of Ireland – debt funder.

Renatus Comment: Kevin O’Loughlin, CEO of Nostra was a finalist in the 2017 Ernst & Young Entrepreneur of the Year Awards. Nostra has just been listed in this year’s (2021) Deloitte Fast 50 – The 50 fastest growing tech companies in Ireland.

An Enterprise Ireland client, Nostra is forecasting double digit growth in the next few years and is on course to reach a turnover of €30 million by the end of 2022 and €100 million over the next five years via organic growth and further acquisitions. The company has recently undergone a complete rebrand and digital makeover and has invested over €500,000 in both a new premises and rebranding project. The brand-new state of the art office in Parkwest was designed to allow for virtual working and or ‘in office’ collaborations.

Source: Nostra Press Release

Deal Details: Irish vehicle leasing and fleet management group, Autolease Fleet Management, has announced a joint venture with AIB who will acquire a 50% stake in the business. The deal consideration was a reported €6m upfront with further investment from AIB over time. The deal is currently pending approval from the CCPC.

Autolease Fleet Management, trading as Nifti Personal Leasing (business to consumer’s arm) and NiftiBusiness (business to business arm) was founded in 2015 and is based in Dublin. The business offers fleet management and vehicle leasing with a focus on sustainability and hybrid/electric vehicles. As of 2019 the business employed a total of 27 staff and reported a turnover of c. €15.3m. The business is 50/50 owned by Irish Bison Limited, a private company that is engaged in various investments and controlled by Raymond Coyle, and Windsor Motors Group, the parent company of Autolease.

AIB Group is a financial services group that operates AIB, one of Ireland’s largest banks. The group is headquartered in Dublin and traded on the London stock exchange. The expressed purpose of this acquisition was to increase the adoption of electric and hybrid vehicles in Ireland. The group is currently trading at c. 188.75GBX.

Advisers: 
Autolease advisers:
Byrne Wallace- Neil Keenan, Eamonn Carey, Aisling Brennan and Tara O’Donohue.

Renatus Comment: This acquisition is likely on the back of AIB’s second green bond issuance in May of this year. The sale of green bonds requires the money raised to be put toward environmentally friendly investments and Autolease Fleet Management, with their focus on sustainability and electric vehicles likely fit these criteria. This deal comes just weeks after various media criticisms of the Irish government’s plans to reach ambitious electric vehicle targets. AIB was the first bank in Ireland to raise funds through a green bond sale.

Source: The Irish Times

Deal Details: Irish-based start-up ConX has been acquired by US-based Houzz for an undisclosed sum.

ConX is a SaaS platform offering simple, affordable estimating and tender management tools built specifically for builders and subcontractors. The company’s software allows contractors to generate professional estimates from simple on-screen construction plans up to 10x faster. The business was founded in 2014 by Dubliner, Annie Slattery, Kerry-man, Jonathan Clarke, and Keith Moore. The company is headquartered in Sydney, Australia.

Houzz develops an online home design and furnishings platform that connects homeowners, home design enthusiasts, and home improvement professionals. It enables local brands and businesses to advertise on its platform, whilst also allowing professionals to build their online presence with a professional profile. The company is led by CEO Adi Tatarko, who co-founded the business with Alon Cohen. To date the business has raised €542.41m in funding, valuing it at €3.57bn in its latest seed round.

Advisers: None mentioned.

Renatus Comment: The deal follows an emerging pattern of strong tech start-ups here in Ireland, with companies either being acquired by large US players, or achieving unrivalled valuations themselves.

Source: RTE News

Deal Details: OncoMark, a UCD spin-out, has been acquired by Cepheid Inc., a US molecular diagnostic company.  The transaction was completed in March for an undisclosed sum.

OncoMark, co-founded by Professor William Gallagher and Steve Penney, developed a novel test for early-stage Breast Cancer (OncoMasTR) that has the potential to reduce the number of breast cancer patients receiving unnecessary chemotherapy.

Cepheid is an American molecular diagnostics company founded in 1996. The California-headquartered company employs c. 6,000 people and has annual revenues of $531m.

Advisers: 
Oncomark Advisers:
Flynn O’Driscoll LLP provided legal advice.
Grant Thornton advised on tax aspects.

Cepheid Advisers:
Mason, Hayes & Curran provided legal and tax advice.

Renatus Comment: The spirit of entrepreneurship is alive and well in UCD with OncoMark being the sixth UCDNova-based business to feature in this newsletter since 2020. We are seeing lots of success stories from these on-campus R&D success stories and hopefully, these successes will create more in the future. We commented on this when Nutriband sold which was the commercialisation of a DIT thesis. Other company successes from this kind of model include Biosensia, Movidius, Swrve, Fieldaware, Glonav, and PolarLake. Following this transaction, the next stage of testing of OncoMarks breast cancer detection system will occur in Cepheid’s world-leading GeneXpert Platform through which various other tests including Covid and HIV tests were brought to market. The staff of OncoMark will move to a new venture, OncoAssure where various other cancer detection products will be produced with the latest focusing on prostate cancer.

Source: UCD; Cepheid Inc.

Deal Details: Belfast-based Crane Communications Limited has been acquired by British EA-RS Group. The deal consideration was not disclosed.

Crane Communications is a life safety, security, and communications company that operates throughout the UK and Ireland. The business is involved in the design, supply, installation, and maintenance of a range of technology systems including CCTV, lighting, entertainment, access controls, Alarms, and AV. The business is majority-owned by David and Nicola McConkey who acquired the business in 2000 from founder Roy Logan.

EA-RS Group is a fire safety and security services group made up of EA-RS Fire Engineering, Circum Fire Engineering, and CCSS Fire & Security. The business received investment from the Richardson family business (RCL Partners) and Rockpool Investments earlier in the year to finance various acquisitions.

Advisers:
Crane Communications advisers:
HNH (deal advisory)- Chris Hylands, Eamonn Donaghy, and Wayne Horwood.
A&L Goodbody (legal)- David Rowan and Laura Barron.

Renatus Comment: This acquisition is the fourth EA-RS have completed since receiving acquisition funding earlier in the year. Crane Communications joins West Midlands-based, CCSS Fire & Security, AST London, and the trade and assets of Essex Fire Sprinklers as new additions to the EA-RS group in 2021. Prior to this latest acquisition, EA-RS was completely focused on England, Scotland and Wales. Acquiring Crane Communications allows the business to expand its service offering group-wide and begin trading on the island of Ireland.

Source: EA-RS Press Release

Deal Details: Irish renewable energy business, Power Capital Renewable Energy (PCRE) has acquired six ‘ready to build solar farm’ sites from UK-based Renewable Energy Systems (RES). The deal consideration was not disclosed.

PCRE was founded by Peter Duff and Justin Brown in Ireland in 2011. The business specialises in developing large-scale solar farms and has undertaken projects throughout Europe. This latest acquisition will see PCRE invest c. €140m to develop fully functioning solar farms on the sites which are located in Galway, Waterford, Clare, and Kildare.

RES is a UK-based global renewable energy company that has been operational for almost forty years. Throughout 2020 the business employed c. 2,700 staff and reported a turnover of c. €970m.

Advisers:
Power Capital Advisers:
Philip Lee- Eoghan Doyle, supported by the Energy transaction team of Siobhan McCabe, John O’ Donoghue, Hugo Grattirola, Maeve Delargy and Elaine Whelan.

Renatus Comment: Paris-based Omnes Capital acquired a majority stake in PCRE in November of last year with the expressed intention of growing PCRE’s energy portfolio to 500 megawatts (0.5 gigawatts). PCRE has far surpassed this target with this latest investment bringing PCRE’s total energy portfolio to c. 1,100 megawatts (1.1 gigawatts). For context, in 2020 Ireland had a solar capacity of just 40 megawatts (0.04 gigawatts). While this is an impressive jump the Government’s targets of hitting 70% renewables on the power grid by 2030 will require a lot more continued investment into the renewables infrastructure. The renewable energy sector has been an active space for some time now with wind having been a dominant investment strategy, and solar now taking a bigger focus. To meet national targets, multiple sources of renewable energy generation will be required. It will be a space to watch for a long time to come.

Source: The Irish Times