Renatus Weekly M&A & Company Performance Private Equity Newsletter 20/08/2023

Deal Details: Nostra has acquired Voice & Data Solutions. Deal consideration was not disclosed.

Nostra is a Dublin-based IT services provider, with other offices in Galway and Cork. The business is majority owned by Kevin O’Loughlin, CEO, who co-founded the business with his brother Barry, Gary Byrne and Senan Finucane. Nostra is forecasting 2023 revenue of €50m.

Voice & Data Solutions is a Dublin-based telecoms consultancy company. The company was founded by Sydney Harman in 2010 and provides a fully managed telecoms solution to clients across the SME and corporate sector in Ireland. The business does not report turnover or EBITDA information.

Advisers:
Nostra:
Legal: McCann Fitzgerald led by Rory O’Malley and John Neeson.
Financial: Grant Thornton led by Gareth Cosgrove and BCA led by Caroline McGrath.

Voice & Data Solutions:
Legal: LK Shields
Financial: Obcom

Renatus Comment: This acquisition marks Nostra’s third acquisition in 2023 and its seventh since 2016 as the business continues to accelerate its growth by acquisition This deal marks one of two acquisitions earmarked to complete in 2023 by Nostra CEO, Kevin O’Loughlin, during his panel appearance at The Real Deal 2023 These acquisitions all come as part of Nostra’s core strategy to become the IT services player of choice across the UK. The pace of growth is likely to increase for the Group, with Nostra reportedly intending to invest a further €30m-€50m in acquisitions as it aims to grow into one of the largest IT services businesses across the UK & Ireland.

At The Real Deal 2023, Kevin O’Loughlin gave us a great insight into Nostra’s modus operandi for finding and minding deals – it can be listened to here.

Source: Business Post

Deal Details: Glantus has been acquired by Basware. Deal consideration was reported to be c. €20.6m. The offer of 33.42p per share represented a premium of c. 67% on Friday’s closing price of £31.50.

Glantus is a Dublin-based accounts payable automation company that is publicly listed on London’s AIM. It was established in 1994 before it was acquired by current CEO Maurice Healy in 2014. In FY Dec 22 the company reported a turnover of c. €10.5m.

Basware is a Finnish finance automation company established in 1994. In FY Dec 21, it reported a turnover of c. €156.3m which converted to EBITDA of c. €11.3m. A consortium led by US venture capital firm Accel-KKR acquired the company in 2022 for a reported sum of €477m.

Advisers: None mentioned.

Renatus Comment: Automation in accounts payable (“AP”) is still in a relatively early stage of adoption with only 9% of AP departments fully automated in 2023, according to the Institute of Financial Operations & Leadership. Developing technologies such as cloud, AI and Machine Learning are increasingly being utilised to allow firms to process invoices and payments more quickly, ensuring smoother processes and improved relationships with suppliers. The report further states that two-thirds of finance professionals expect their AP department to be automated by 2025. The most commonly cited issue in terms of efficiency is highlighted as being excessive amounts of time spent processing invoices, followed by the manual entry of data. It is a division of all businesses which is rife for automation and it certainly appears that this disruption is coming sooner rather than later.

Source: Business Post

Deal Details: Bauer Media Group, via its Irish subsidiary, has agreed a deal to acquire iRadio. Deal details have not been disclosed.

Bauer Media Audio Ireland is Ireland’s largest commercial radio group, with six stations including Today FM and Newstalk. The business is owned by Yvonne Bauer and headquartered in Hamburg. As of 2021, it had reported revenues in excess of €2.2bn.

iRadio is a radio station based in Roscommon, broadcasting to 15 counties across the North East, Midlands and Northwest of Ireland. The business’ primary backer is John Mannion. It does not report turnover or EBITDA information.

Advisers:
Bauer Media:
​​​​​Corporate Finance: Deloitte led by James Toomey, Philippa Reynolds and Dylan Gibbons.
Legal: Matheson led by Rob Barrett, Dan McAleese and Rachel Hodgins in M&A, along with Niall Collins supported by Simon Shinkwin in Competition.

iRadio:
Legal: Philip Lee led by Inez Cullen, Jonathan Kelly and Olivia Creaven in M&A, with Ronan Dunne and Daniel Hanrahan in Competition.

Renatus Comment: Since entering the Irish market in 2021 through the acquisition of Communicorp from Denis O’Brien, Bauer Media has cemented itself as a key player in the Irish radio market. On acquisition, Bauer took control of Newstalk, Today FM, Spin 1038, Spin Limerick and 98FM. In 2021, it then acquired Cork’s Red FM. While anecdotally it may seem that podcasts and other forms of audio content are on the rise in Ireland, the radio market remains an attractive space in terms of listenership, with live radio accounting for 74.3% of all listening in the Irish audio market, according to Radiocentre Ireland.

Source: Bauer Media Press Release

Deal Details: McGovern’s Pharmacy has been acquired by Pillbox. Deal consideration was not disclosed.

McGovern’s Pharmacy is a pharmacy in Derrylin, Co. Fermanagh. The business does not report turnover or EBITDA information. The pharmacy will be re-named Derrylin Pharmacy following the acquisition and will be managed by Conor McQuaid.

Pillbox Pharmacy is an Enniskillen-based pharmacy business. It is owned by Neill McConnell. The business does not report turnover or EBITDA information.

Advisers: None mentioned.

Renatus Comment: The pace of consolidation in Ireland’s pharmacy industry seems set to continue to accelerate. Recent deals include three acquisitions made by McCabes Pharmacy in Dublin, announced in June, with Uniphar also previously acquiring Hickeys and McCauley. Factors such as rising input costs such as labour and reductions to the fees paid through the State’s dispensing scheme, have made the operating environment for sole traders increasingly difficult. With a similar consolidation trend already evident across dental practices, veterinary clinics and nursing homes, it is likely that these challenges will force smaller players to sell to larger operators or groups who can leverage scale and optimise central overheads by extracting synergies.

Source: Business Plus

Deal Details: OneTouch Health has acquired AutumnCare. Deal consideration was not disclosed.

OneTouch Health provides a platform that allows providers to scheduling carers/client appointments to managing plans and invoicing. The business is owned by Dermot Clancy (CEO), Finín O’Connor (CCO), and various other individuals and investors. It does not report turnover or EBITDA information.

​​​​​AutumnCare is an Australia-based clinical management system for care providers. The business does not report turnover or EBITDA information.

Advisers:
OneTouch Health:
Debt: Deloitte led by Brian Fennelly, Ross O’Donovan and David Fitzgerald.

AutumnCare:
None mentioned.

Renatus Comment: OneTouch Health has grown from a technology ATU Innovation Hub in Galway to a business with offices and teams in Ireland, the UK and even Brazil. In October 2022, OneTouch Health acquired Signis Group, a provider of children and vulnerable adults’ welfare and safeguarding services. OneTouch represents a major solution in a space where staff capacity is a major issue, meaning that the digitisation of administrative elements can have an outsized impact on a care provider’s ability to serve its users.

The business has stated its ambition of becoming the market leading provider of care management systems in the UK, with a total market of 17k care home providers to be targeted over the next five years.

Source: OneTouch Health Press Release

Deal Details: Zevas has been acquired by ResultsCX. Deal consideration was not disclosed.

Zevas is a Dublin-based customer experience management company. The company has grown significantly since its foundation in 2001 with 3 centres across Ireland and over 130 employees. Zevas is owned by Con Lehane. It does not report revenue or EBITDA information.

ResultsCX is a customer experience management multinational headquartered in Florida. The company is backed by ChrysCapital. The business is supported by more than 23,000 colleagues across more than 25 engagement hubs worldwide. The business does not report revenue or EBITDA information.

Advisers:
Zevas:
Legal: ReganWall LLP led by Adrian Wall and supported by Neil Nolan.
Tax: Hughes Tax & Advisory led by James Hughes.

ResultsCX:
Legal: CMS led by Cameron McKenna.
Financial DD: KPMG

Renatus Comment: Earlier this year, Zevas expanded its operations, creating 50 jobs out of its new hub in Mitchelstown. Access to ResultsCX’s advanced platform, processes, and technology should boost the company’s operations significantly in terms of scale and effectiveness and further contribute to Zavas’s impressive growth. CEO and Managing Director of ResultsCX, Rajesh Subramaniam commented that this move is a ‘strategic next step as we build a strong service presence in Europe.’ This acquisition also enhances the company’s footprint in the FGT and Financial Services segments which are viewed as attractive in terms of growth opportunities.

Source: ResultsCX Press Release

Deal Details: Kyron Innovative Technologies has been acquired by AM Technical Solutions. Deal consideration was not disclosed.

Kyron Innovative Technologies is a Kildare-based business that offers construction quality and commissioning services. The business has clients across industries including semiconductors, life sciences, data centres, among others. The business is owned by Ciaran Brennan and it does not report turnover or EBITDA information.

AM Technical Solutions is a US-based proven and licensed architect, engineering, and construction business. The business does not report turnover or EBITDA information.

Advisers: None mentioned

Renatus Comment: Building Commissioning has advanced internationally with tightening regulatory standards, standardised protocols, and technological improvements. The acquisition of Kyron Innovative Technologies will expand commissioning capabilities for AM Technical Solutions in high-tech construction markets. With businesses’ acquisition strategies typically focusing on new market penetration, acquiring further market share or acquiring new capabilities, Kelly McAndrew, CEO, has emphasised that the acquisition will give AM Technical Solutions full end-to-end capability in a facilities lifecycle from early programming and design through the commissioning of the building.

Source: Cleanroom Technology

Deal Details: Accel-KKR has acquired a minority stake in Ocuco for €60m.

Ocuco is an Irish-based eyecare software company. The business was founded in 1993 by Leo Mac Canna. Ocuco reportedly had over €35m in revenue in FY21.

Accel-KKR is a technology-focused private equity firm with $19bn in capital commitments, based in Menlo Park.

Advisers:
Ocuco:
Legal: Pinsent Masons led by Neil Keenan.
Banking & Finance: ByrneWallace LLP led by Triona Ryan.
Corporate Finance: William Blair & Co

Accel-KKR:

None mentioned.

Renatus Comment: Funding from Accel-KKR will be used to accelerate Ocuco’s growth, with M&A poised to be a significant element of the business’ growth strategy. To date, Ocuco has completed over 15 acquisitions, having also previously received €15m in investment from (“ISIF”) the Ireland Strategic Investment Fund. Previous acquisitions by the business have focused on both geographic expansion and a broadening of Ocuco’s technical capabilities. It acquired OptiCommerce, a website and e-commerce provider to the eyecare market, and also acquired B&F Group which provided the business with an initial route into the Dutch market.

Source: Ocuco Press Release

Michael Lyng Motors Limited operates from two dealerships and is the main Hyundai Dealer for Carlow and Kilkenny and the main Ford Dealer for Kilkenny.  The business is majority owned by the Lyng family.

In its financial year to September 2022, the business generated a turnover of c. €38.7m, an increase of 5.1% year-on-year. This converted to an EBITDA of c. €1.6m, an increase of 9.4% year-on-year. EBITDA growth can primarily be attributed to revenue growth, with EBITDA, with margins remaining relatively constant year-on-year.

Significant post-EBITDA cash movements related to working capital investment of c. €2.1m. The business finished the year with a cash balance of c. €3.0m, a decrease of 18.9% year-on-year.

The business employed an average of 56 people in FY22 at a total cost of c. €2.4m.