Renatus Weekly M&A & Company Performance Private Equity Newsletter 20/03/2022

Deal Details: JP Morgan have announced the acquisition of Cork-based fintech, Global Shares. The consideration was a reported $730m (€665m). This transaction is subject to regulatory approvals and is expected to close later this year.

Global Shares is a market-leading provider of innovative software and services for employee equity share plan administration. It was originally founded by former Eir executive Maoiliosa O Culachain in 2005. Former IFG CEO Richard Hayes, was an early backer and chaired the company for a number of years. O Culachain exited the business in 2016 and prior to this transaction it was led by CEO Tim Houstoun. Global Shares reportedly has nearly c. €182bn in assets under administration across 650,000 corporates. The business headquarters will remain in Clonakilty following the completion of this transaction.

Since Global Shares was founded in 2005 it has grown and recorded over €25m of revenue in FY20 with revenues forecast to reach over €40m in FY21.

This acquisition marks one of the largest Irish fintech exits in history with beneficiaries of the exit including the likes of Motive Partners, Richard Hayes, Duke House Investments, Carrig Glen Investments, ISIF, Robert Neill, Gerry Wrixon, Brian McCarthy, Pearse Mee, among others.

JPMorgan Chase & Co. is an American multinational investment bank and financial services holding company headquartered in New York City and incorporated in Delaware.

Advisers:

Global Shares and its shareholders were advised by:

Lead financial advisor: Bank of America

Legals: Proskauer Rose, Arthur Cox

Vendor due diligence: EY Ireland (Marcus Purcell, Eanna Brennan, Dave Barry, Niall O’Lideadha)

Commercial due diligence: EY-Parthenon (Matthew Tucker, Giovanni Dellaselva)

Transaction support: EY Ireland (Robert Hussey, Michael Murphy)

JP Morgan was advised by:

Financial adviser: JPMorgan Securities

Legals: Freshfields Bruckhaus Deringer and McCann FitzGerald.

​​Renatus Comment: This is a fantastic success story and is one of the largest Irish fintech exits in history. It is also a great case study of how the right private equity partner can bring more than money to the table.

Motive Partners’ backing of Global Shares was described as  “a seminal moment” in its journey by early backer Richard Hayes. Hayes noted that stepping down as chairman in 2018 to make way for Motive partner Andy Stewart was “one of the best decisions of his business life”.

Motive brought more than cash to the table to help accelerate expansion. It focused the company’s thinking as to where the real value in the business lay, drove strategy and leveraged its network to bring in top talent to execute on this new direction.

Source: Irish Times

Deal Details: Belfast-based M.B McGrady & Co Chartered Accountants, has merged with Duffy & Co Chartered Accountants, with the merged entity coming under the overall M.B McGrady & Company Business. Deal details were not disclosed.

M.B McGrady & Co is a Northern-Irish accountancy practice specialising in online accounting, offering everything from help with business start-ups to business advice for owner-managed businesses and high-growth companies. In addition to auditing and accountancy, services also include succession and exit planning, advice on inheritance tax and capital gains tax, VAT, self-assessment, personal and corporate tax planning, and litigation. The business is led by Managing Partner, Malachy McGrady.

Duffy & Co. was established in 1994 by Chartered Accountant and former chairman of the Northern Ireland branch of the Chartered Institute of Taxation, Des Duffy, and Chartered Accountant, Denise Duffy. The company, formerly based on Eglantine Avenue, specialised in the delivery of accountancy and book-keeping services, taxation services, and business services.

Advisers: None mentioned.

Renatus Comment: The deal sees a continuation of the 2021 trend of consolidation plays within the financial services sector, as highlighted in the Renatus Blog in January. Duffy & Co has transitioned to offering more digital solutions, such as the introduction of ‘Making Tax Digital’, which should prove complementary to M.B McGrady significant focus on its online accountancy offering. Duffy & Co will benefit from the expertise of the M.B McGrady & Co team in the space.

Source: Irish News

Deal Details: UFP Technologies has acquired Advant Medical Ltd. According to S&P Capital IQ, consideration to the shareholders was a reported €19m.

Headquartered in the US, UFP Technologies is a Nasdaq-listed designer and manufacturer of components, subassemblies and packaging into the medical, aerospace, automotive, electronics and other sectors. UFP generated c. $206m of turnover and $30m of EBITDA in FY Dec 21.

Advant Medical is a developer and manufacturer of Class I, II and III medical devices and packaging. It is headquartered in Ireland and has operations in Costa Rica and Mexico. Latest CRO filings show that Advant Medical Limited generated c. €15m of turnover and c. €1.95m of EBITDA in FY Dec 2020. Prior to the transaction, Advant was wholly owned by Robert Di Petrillo.

Advisers:

Advant Medical were advised by:
Legals: MacSweeney & Company (Ray Darcy and Anthony Moloney)

Renatus Comment: In the last six months, UFP has completed three acquisitions (Advant, DAS Medical and Contech Medical), all of which operate in the medical space. UFP has been using these acquisitions as a way to increase medical exposure and acquire capabilities to better serve medical customers.

The Advant transaction very much fits this strategy. Advant will bring medical product development and clean room manufacturing capabilities in Ireland, a key strategic market for UFP.

Initial investor sentiment seems to be positive on the deal, with the share price rising c. 7% to $62.54 since the deal was announced on the 17th of March

Source: UFP Press Release

Deal Details: Care Property Invest has completed the acquisition of Elm Green Nursing home for a reported €26.7m of consideration.

Elm Green Nursing Home is a 120-bed care centre with 27 independent living apartments in Castleknock, Dublin. French operator DomusVi, one of the largest international players in the residential care space, will run the Elm Green nursing home.

Care Property Invest is a Belgian investor focused on investing in high-quality healthcare real estate for the elderly and disabled across Europe. The company has an international portfolio of 134 healthcare projects across Belgium, The Netherlands, Spain and Ireland. In FY Dec 2021, Care Property generated c. €43m of rental income off of Fair value property portfolio of c. €986m. It has a market cap of roughly €660m currently.

Advisers: None Mentioned

Renatus Comment: Care Property is one of three listed Belgian companies that are active players in the Irish Nursing Home market. Last month it completed its first investment in the market acquiring the 55-bed Ballincurring Care Centre in Cork for a reported €6.2m.

Two other Belgian investors active in the Irish market include Aedifica and Confinimmo. Since January 2021, Cofinimmo has invested a reported €94m across seven sites in Ireland. Aedifica has committed to investing a reported €179m in Ireland since its first acquisition last February

Source: Sunday Times

The Gibney Group (Moylagh) Limited is a holding company. It is the ultimate parent of Gibney Steel Products Limited, which manufcatures steel products ranging from builders trestles to ring feeders for animals, and Ag-Con Products Limited, a manufacturer of galvanised steel products  for the argiculutral and building sectors in Northern Ireland. The holding company is majority owned by Oliver Gibney.

In its financial year to March 2021, the business had turnover of €12.2m, an increase of 37.6% YoY, which converted to an EBITDA of €1.6m, an increase of 79.6% YoY. the majority of these profits were attributable to Gibney Steel. The business’ increased EBITDA can be partly explained by a rise in gross margin from 17% to 18%, along with increased revenues YoY.

The business finished the year with a cash balance of c. €2m, an increase of 14.7% YOY. The business spent a total €2.1m in staff costs during the year, although the average number employed is not stated.

Whitaker Poultry was established in Cork in 1905. The business hatches and rears chicks and turkey poults from its hatchery located in Cork city. Whitakers Poultry rears over 1m chickens a year and around 500k turkeys, most of which are for the Christmas season. The business offers a variety of breeds.

Whitaker Poultry reported a turnover of c. €20.5m in FY21 which converted to an EBITDA of c. €3.2m. This represented an increase of 14.3% and 12.6% respectively from the previous year.

Significant post-EBITDA cash movements included a dividend paid figure amounting to c. €500k, tax paid of c. €402k, movements in funding from connected parties of c. €375k, and a movements in provisions balance of c. €195k. The business closed FY21 with a net cash balance of c. €9.5m, an increase of c. €1.5m from the previous year.

The majority of Whitakers Hatcheries revenue came from Ireland with c. €20.4m coming from the Republic of Ireland and c. €78k coming from other European markets. The business employed an average of 15 people throughout FY21 at a cost of c. €620k. The business is majority-owned by William Whitaker with Gavin Whitaker and Julie Moynan both holding a minority stake.