Renatus’ Weekly M&A Newsletter – 27/06/2021
June 27, 2021Renatus’ Weekly M&A Newsletter – 04/07/2021
July 4, 2021
Renatus Weekly M&A & Company Performance Private Equity Newsletter 20/06/2021
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
THE RENATUS PODCAST
With our podcast series, we are endeavouring to unearth legendary untold business stories where all of us in this ecosystem of growing companies can learn.
This month we have a unique entrepreneur in Tipperary man Jimmy Martin who is leading one of Ireland’s most successful companies, AMCS, which is headquartered in Limerick but truly a global leader.
Jimmy left the world of secure employment with no crystal clear business plan and worked for a few years for no salary to get established. He was one of two men day one in AMCS and he is still captaining the ship as it dominates global markets.
His thought process around investment is interesting and insightful. His early stage investors Paul McKeon and the late Declan Hogan along with NCB Ventures knew tech and helped the Company as it grew the software proposition. Highland Capital then really helped them with their move to true SaaS and more recently ISIF and Insight have helped them go truly global.
It is a great case study of how to grow by acquisition.
He talks a lot about sales. His co-founder Austin Ryan upped sticks and went to base himself in the UK for the crucial early chapter of taking the business off this island.
Jimmy talks about how as founder and leader the transition to not touching every big sale was challenging, yet he managed it and it turned out not to be a blocker to growth. He also talks of how he has learned from expertise the business has tapped, sales and marketing can be a science and does not have to be a hit and hope art.
It is a very authentic listen and we thank Jimmy for obliging us with the interview. I think we can all learn from it.
Click the below link on our web to listen to it: https://renatus.ie/renatus-podcast/
M&A ACTIVITY
US PE Marlin acquires controlling stake in Learning Pool
Deal Details: Marlin Equity Partners has signed a definitive agreement with Carlyle Cardinal Ireland (CCI) to take over its stake in Learning Pool.
The financial details of the deal were not disclosed however the deal is reported to value the business at around €175m.
Derry-based Learning Pool is a full-service online training provider to workplaces around the world, offering learning courses, platforms, analytics and custom content development services to over 1,100 organizations and 5.1 million learners.
Marlin is a global investment firm with over $7.6bn of capital under management.
CCI is a €300m fund co-managed by the Carlyle Group and Irish asset manager Cardinal Capital. It acquired a controlling stake in Learning Pool in 2016, reportedly paying out an initial £25m in investment.
Advisers: Learning Pool and the management team were advised by Beltrae Partners, Millar McCall Wylie and Robert W. Baird & Co. Financial Due Diligence was provided by Deloitte and Tax Due Diligence by Grant Thornton.
Renatus Comment: Since CCI backed Learning Pool in 2016, the company has completed several acquisitions including US based Remote Learner and Scottish based MediaCorp.
The company recorded revenues of £18m for the twelve months ending April 20. The Company is likely to have experienced significant growth since then on the back of the US acquisition and increased demand for remote learning.
It is reported that Learning Pool’s entire executive management team have re-invested in the company. This is a great example of how a secondary private equity transaction can facilitate management to remain significant shareholders in the business and continue the growth journey with a new partner.
Source: Learning Pool; Irish Times
Synova acquires majority stake in D+M
Deal Details: London private equity firm Synova Capital has bought into Doran + Minehane (D+M), a Munster-based accounting services specialist to the global hedge funds industry.
The deal consideration was not disclosed.
The deal consideration was not disclosed.
D+M, founded in 2007, serves clients out of five offices in Ireland, Singapore, and most recently the Cayman Islands.
Advisers: Advisers on the transaction were David Lyons and Darragh Jones from IBI (D+M financial advisor), Key Capital (Synova financial advisor), KPMG (financial & tax due diligence), EY-Parthenon (commercial due diligence), Pinsent Masons (Synova legal), and Dentons (D+M legal)
Renatus Comment: The Company’s client base includes some of the largest investment managers and fund administrators globally.
Synova is headquartered out of london and was co-founded by Irish man David Menton. They specialise in four verticals including Financial Services. Synova has delivered stellar returns from its first three funds and is a great first generation Private Equity success story.
Source: Synova
MML backed Waystone completes a merger of four companies
Deal Details: Waystone, formerly DMS Governance, has announced a new compliance offering via the merger of four companies to create Waystone Compliance Solutions.
Waystone is backed by MML, led from the London Office.
The companies involved in the latest merger are Titan Regulation, Argus Global, CCL Compliance and ISAS, each an established and experienced provider of regulatory compliance services, based in North America, Singapore, the UK, the Middle East and Ireland, respectively.
Waystone is the leading provider of institutional governance, risk and compliance services to the asset management industry.
Advisers: Grant Thornton provided buy side support on financial (Dara Kelly) and tax matters.
Renatus Comment: Prior to the transaction, ISAS was owned by Conor Flynn, Sinead McDonald and Martin Kerrigan.
It was reported that ISAS was added to the Waystone group because of its specific technical expertise and its knowledge around the European Data Protection landscape.
Source: MML
Learnosity acquires Questionmark
Deal Details: Learnosity, a Dublin-based edtech company has acquired UK-headquartered Questionmark for undisclosed sum.
Learnosity provides the assessment infrastructure powering more than 120 of the world’s leading learning platforms and publishers. In addition to its Dublin headquarters, Learnosity has a R&D team in Sydney, Australia, and a US office in New York.
Questionmark, with offices in the UK, the US and Europe, was the first company to take assessment software online. Since then, it has developed a global reputation, counting 1 in 6 US Fortune 100 Companies as customers, with more than 600 customers worldwide.
Advisers: Wallace Corporate (Gar Smyth and Sean Hiney) advised Learnosity
Renatus Comment: Battery Ventures acquired a 40% stake in Learnosity in 2018 from 3P learning for a reported €16.3m.
It was reported that Questionmark generated £15m of revenue and c.£5-£6m of profitability.
Similar to Learning Pool, Learnosity has benefited from changing trends due to the pandemic with a decisive swing to online for education and workplace assessments. The newly enlarged group will now have scale, geographic coverage and capabilities to become a leader in the online assessment market.
Source: Learnosity, Irish Times
Datamars acquires HerdInsights
Deal Details: Datamars, a company specialising in identification products for livestock, pets and textiles have acquired HerdInsights based in Little Island in Cork.
Headquartered in Switzerland, Datamars operates 27 subsidiaries with 6 factories and a global network of distributors to serve vets, farmers and other customers all over the world.
Herdinsights (formerly Alanya) was established 10 years ago to improve the efficiency of farm breeding programmes. The smart collar is worn on the cow’s neck. Using multi metric analysis on each individual cows’ behaviour, the cloud based software enables more accurate and timely heat detection. Fertility is one of the major factors affecting the efficiency of any dairy herd. Herdinsights monitors both the reproductive and general health of the animal sending an alert directly to the farmers phone where there is a negative variance from the cow’s normal behaviour.
Prior to the transaction Herdinsights was majority owned by Patrick Jordan.
Advisers: Kieran Regan from Regan Wall acted for HerdInsights and DLA Piper acted for Datamars.
Renatus Comment: The wearable medical device market has been booming in recent years with products such as fitness monitors and sleep trackers becoming increasingly popular. This boom is not refined to human products as companies such as Datamars and HerdInsights have developed impressive products to reduce farm health care costs and improve the efficiency in farming.
The transaction greatly strengthens HerdInsights access to international markets and is a particularly good fit for this technology as Datamars have other products that operate in the move to Smart farms and the horsepower to make it happen.
Source: HerdInsights
Strikepay acquires UK rival
Deal Details: Irish fintech Strikepay has acquired UK competitor Gratsi for an undisclosed amount.
Strikepay was founded by Oli Cavanagh and Charles Dowd in late 2020 as a direct response to the challenges posed by the rapid acceleration to a cashless society.
Gratsi, also founded in 2020, has been growing its customer base in the hospitality and beauty industries.
Gratsi founder Jack Spargo will join Strikepay as Vice President of Engineering as part of the deal.
Advisers: None mentioned
Renatus Comment: The pandemic is likely to speed up the transition to a cashless society in next decade or two.
Our portfolio company, Kappture, is extremely busy helping clients transition to cashless systems as stadiums and education facilities reopen.
Source: Strikepay
Kerry agrees the sale of its Consumer Foods’ Meats and Meals business
Deal Details: Kerry Group plc has reached an agreement to sell its Consumer Foods’ Meats and Meals business in the UK and Ireland to Pilgrim’s Pride Corporation for a reported cash consideration of €819m (£704m).
The division, whose brands include Richmond, Denny and Galtee, reportedly earned profit before tax of €63m last year on revenue of €828m. Pilgrim’s Pride is a global food company with more than 58,000 team members and is one of the largest poultry producers in the USA and acquired Moy Park in 2017.
The proceeds from the sale will be used for general corporate purposes and the continued strategic development of the Taste & Nutrition business.
Advisers: Pilgrim’s Pride were advised by Rothschild (Corporate Finance Advisor), KPMG (Financial), Freshfields Bruckhaus Deringer LLP (Legal)
Renatus Comment: Beyond the Co-Op dynamic, Denny is probably the part of Kerry group closest to the DNA of the group. The business was one of the biggest employers in Tralee for years, the co-op supplied Pigs as at the time Pigs were useful to consume the then unwanted whey. It is fair to assume over the years it would have received disproportionate attention at board meetings relative to its contribution to the total group and selling off is an end of an era.
It is clear that Kerry’s strategy is to focus on the taste and nutrition business. Kerry stated it would now “separate and realign” the remaining dairy activities in the consumer foods division. Reportedly, talks with the Co-Op on a JV involving the diary business were suspended in April 21.
Reportedly, the purchase price represented an 8.5x multiple on implied standalone EBITDA for 2021. Kerry currently trades at c. 20x NTM EBITDA. It will be interesting to see if investors view the disposal of the meat business as a positive move and re-rate the business to a multiple closer to the c. 25x EBITDA competitor Givaudan SA trades at.
Source: Kerry Group, Irish Times
Vendek is acquired by Supreme PLC
Deal Details: Supreme (AIM:SUP), a leading manufacturer, supplier, and brand owner of fast-moving consumer products, has announced the acquisition of Vendek Limited (trading as Powerline), a leading Dublin-based distributor of batteries and lighting products.
Founded in 1996, Vendek operates exclusively within Ireland, distributing battery and lighting products under the Osram, Panasonic and Duracell brands and servicing some of the country’s leading retailers across DIY, hardware, convenience, and petrol stations.
The initial consideration is reported to be €1.07 million plus deferred consideration and a performance related earn-out of up to €0.75 million in aggregate.
Advisers: Eddie Darby (RBK) led on the Corporate Finance side for Vendek, Ryan Cannon Kirk also advised and Margaret Finlay advised on the legals for the Vendor.
Flynn O’Driscoll (Legal) and RSM (tax) advised Supreme.
Renatus Comment: Prior to the transaction, Vendek was owned by Hugh Fitzsimmons.
Supreme announced its flotation on the AIM market earlier this year in a move that raised £67.5m
Source: Investigate.co.uk, Supreme
DFP acquires Bridge Financial Services
Deal Details: DFP Pension & Investment Consultants has acquired Dundalk based Bridge Financial Services.
Established in 2000, DFP Pension & Investment Consultants, is one of the leading financial advisory firms operating in the Irish market with client funds under management now in excess of €450 million.
After 13 years of building a significant personal financial planning business, Pat Mackin, owner and MD of Bridge Financial Services, has decided to merge with DFP and join this well-established team of financial professionals.
Advisers: None mentioned.
Renatus Comment: This is DFP’s 8th brokerage acquisition in the last 15 years. Outside of the large players such as Davy, Goodbody, Irish Life and Brewin Dolphin, the market is highly fragmented and we expect to see further consolidation in the coming years.
Source: DFP
IMMAC acquires Beechwood Nursing Home
Deal Details: Healthcare investor IMMAC Group announces the acquisition of Beechwood Nursing Home, a 57 single-bedroom nursing home based in Carlow.
The IMMAC Group is a leading Healthcare investment company in Ireland, Austria, and Germany. IMMAC has to date made investments totalling €1.7 bn.
Beechwood is IMMAC’s 3rd acquisition in Ireland in the last 15 months and increases IMMAC’s investment portfolio in Ireland to 6 nursing homes.
Advisers: IMMAC was advised by Aidan Kearney and Alma O’Brien from Baker Tilly (financial) and Simmons & Simmons (Legal)
Renatus Comment: IMMAC first entered the Irish nursing home market in 2017 when they acquired Beechfield Care Group. Noel Boyle, Managing Director of IMMAC Ireland, stated that IMMAC have a healthy pipeline of carefully selected opportunities so we expect to see IMMAC continue the M&A strategy in the Irish market.
Source: IMMAC
Bidvest Noonan acquires Amber Support Solutions
Deal Details: Amber Support Solutions has been acquired by facilities management group Bidvest Noonan for an undisclosed amount.
Amber, founded in 2010, is the leading Northern Irish provider of industrial cleaning services.
As part of the acquisition Amber’s MD Scott Brannigan will become the managing director of Bidvest Noonan NI.
The Bidvest Noonan Northern Ireland business employs a total of 1,500 people and is already one of the region’s largest and most successful facility services companies.
Advisers: None mentioned
Renatus Comment: Prior to the transaction Amber Solutions was owned by Scott Brannigan.
This is Bidvest Noonan’s fifth acquisition in 2021. Last month Bidvest Noonan acquired UK competitor, Cordant Services.
Source: Bidvest Noonan
Deals in the Making & Other News
August Equity set to take stake in Integrity360
Deal Details: It is reported that August Equity, a UK private equity firm, is set to take a majority stake in Integrity360, a cybersecurity company based in Dublin.
The deal could value Integrity360, founded by the entrepreneur Eoin Goulding, at between €35 million and €40 million, according to the report.
It is reported that Integrity360 is looking for growth in the UK market.
Source: The Times
Lufthansa Technik reviewing its Irish business
Deal Details: German aviation group Lufthansa Technik is reviewing the Irish business following the impact of worldwide Covid travel curbs on its industry.
The company employs 503 people in Shannon Airport.
The review could involve a sale, restructuring or closure.
It is reported Atlantic Aviation Group, also based in Shannon Airport, could be a potential buyer for the business.
Source: Irish Times
Investec and Irish Life consider joint bid for Davy
Deal Details: It is reported that Irish Life and Investec are considering a joint bid for Davy which would probably lead to Davy being broken up, with Irish Life taking control of the wealth management division and Investec acquiring its capital market business.
Final bids in this competitive process are due by the end of the month.
Source: The Times
BoyleSports Considering William Hill deal
Deal Details: It is reported that BoyleSports is interested in buying some or all of the William Hill shops in the UK. William Hill’s 1,400 shops are being sold by Caesars Entertainment.
According to Analysts quoted in the report, the UK business could fetch as much as £1.5bn.
According to the Daily Telegraph, BoyleSports faces competition from Apollo, the Shaked family, 888 Holdings’ founding shareholders and Fred Done of BetFred.
Source: Sunday Independent
COMPANY PERFORMANCE
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
Based in Dunboyne, Meath, Floor Form has been supplying flooring solutions into the construction industry for over 30 years in Ireland the UK and Europe.
FY20 was a strong year for the business which saw revenue and EBITDA increase by c. 32% and c. 74% to €19.8m and €4.1m, respectively.
Cash decreased by c. €433k during the period to end at c. €4.4m. The big draws on cash were a €5.65m dividend payment and c. €2.1m of financial assets acquired during the period. These movements were partially offset by a c. €3.3m unwinding in working capital.
The business employs 19 staff directly at an annual cost of c. €1.25m. Sean and Bernadette Burns are the ultimate controlling parties in the company
Wilton Waste Holdings Ltd is the partent company of Wilton Waste Recycling and Wilton Scrap Metals. The business is Cavan-based and has been run by the Wilton family for over 20 years. They also conduct domestic wheelie bin collection for people in Cavan.
In its financial year to June 2020 the business recognised revenue of c. €23.0m (down 5.1% year-over-year) and EBITDA of c. €2.3m (down 18.1% year-over-year). EBITDA converted to a net cash increase of c. €837k during the year to leave a cash balance of c. €3.1m.
Wilton is wholly owned by Rodney Wilton. The business employed an average of 77 people during the year at a cost of c. €2.9m.
RECENT FUNDRAISINGS
Who: Stripe reported to have secured further investment.
What: $1bn (€830m) was reportedly generated via share sale where mutual fund giant Capital Group, venture capital firm Sequoia, e-commerce company Shopify and buyout firm Silver Lake were among those to make investments.
Why: The purpose of fundraise was not specified.
Source: Irish Times
Who: Construction tech augmented reality start-up XYZ Reality, founded by Irish-born David Mitchell, closes funding round.
What: £20m series A round was led by Octopus Ventures, with participation from existing investors Adara Ventures, Amadeus Capital Partners, Hoxton Ventures and J Coffey Construction. New investment also came from Activum SG, Optimas Capital and Tishman Speyer.
Why: XYZ reality is preparing for a launch in the US, and plans further investment in strengthening research and development, while also adding to its London team in technology, manufacturing, sales and marketing roles.
The company is also planning to use the funding to develop its second generation headset.
Source: Irish Times
Who: Belfast-based contractor Pure Fitout has secured funding.
What: £1.5m investment comes from Whiterock Finance’s Growth Finance Fund.
Why: The loan has been used to fund a new non-toxic fire-retardant treatment for timber and will also help further Pure Fitout’s growth plans.
Source: Belfast Telegraph
Who: SynergySuite, the restaurant management software company founded by siblings Niall and Suzanne Keane.
What: Received backing from Cross Group boss, Ken Keating.
Why: The specific use of the funds was not disclosed but they will likely be used to support SynergySuite’s continued growth.
Source: The Times
Who: Scurri, a Wexford-based software company founded by Rory O’Connor, closes investment.
What: €9m round was led by Gresham House Ventures which brings the company’s total funding to date to €15.3m.
Why: The latest round of funding will be used to accelerate growth in the UK market. The company also plans to triple its workforce over the next two years.
Source: RTE
Who: Spotlight Oral Care, founded by the Creaven sisters, which has developed a range of oral care products. The Company reported sales of €2.5m in 2019 and in a recent interview, Vanessa Creaven quoted sales of €5.9m for the year ending July 20.
What: Received another €1m from businessman, Dermot Desmond. The company reportedly received €2m from Mr. Desmond last year.
Why: The specific use of the funds was not disclosed but they will likely be used to support Spotlight’s continued growth into the US market.
Source: Sunday Independent
Who: Waterford-based virtual reality technology company VR Education has raised funding.
What: VR Education has raised €9 million in a share placing run by Davy and Shard Capital Partners.
Why: Applications have been made to Euronext Dublin and to the London Stock Exchange for the Placing Shares to be admitted to trading on Euronext Growth and AIM respectively.
Advisors: Alan Ryan, Michael Bambrick and Graham Coyne of Wallace Corporate Counsel acted as legal advisers. Davy and Shard are acting as Joint Bookrunners in respect of the Placing.
Source: VR Education, Irish Times
Who: Irish garment producer, Theya Healthcare, which specialises in post-surgery bras. The business was founded in 2012 by Ciara Donlon.
What: Raised €500,000 from the University of Vermont Health Network in the United States.
Why: Investment would assist Theya in accelerating expansion in the US and other markets, “to ensure access to our products by as many people recovering from breast, thoracic, pelvic or abdominal surgery as possible”.
Source: Business Post
EXECUTIVE AND BOARD APPOINTMENTS
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.
@RenatusCapital Tweets
66.4
The Ulster Bank’s construction sector PMI for May 2021, an increase from April’s reading of 49.3, giving the strongest reading in the index’s 21-year history. A reading over 50 signals growth. @IrishTimes
4.5%
The year-on-year increase in the Irish residential property (houses & apartments) price index for April 2021. The national median price paid for a home was €265K over the past year, in Dublin it was €390K, according to IrishTimes @CSOIreland
92.9%
The year-on-year decrease in the number of passengers handled by main Irish airports for Q1 2021 amounting to 418,954 passengers on just over 9,000 flights, according to @CSOIreland
13.6% & 5.6%
The year-on-year increase in the Irish agricultural output and input price indices, respectively, for April 2021, according to @CSOIreland
0.8%
The year-on-year decrease in the Irish services price index for Q1 2021 with the most notable changes in Air Transport (-15.6%) and Sea and Coastal Transport (+17.1%), according to @CSOIreland
10% & 45%
The year-on-year increase in the value of Irish goods exports and imports, respectively, for April 2021 amounting to €12.44bn worth of goods exported and €8.08bn worth of goods imported, 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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