Dear Reader,
You are receiving this mail every week as we see you as a key partner and we look forward to continuing to enjoy our journey with you over the decades ahead.
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
Deal Details: UK-based Greenergy has agreed to purchase 100% of the shares of Amber Petroleum, an independent fuel distributor and retailer based in Cork. The financial consideration of the deal has not yet been disclosed.
Amber’s operations include company-owned and dealer-owned forecourts, comprising a network of 35 sites nationwide, along with fuels distribution and home heating depots.
Greenergy is a leading fuel importer and supplier. Its infrastructure and supply chain expertise enables it to create cost and operating efficiencies and to provide low-cost, reliable fuel supply to our customers.
The acquisition comes after its recent investment in 230 retail sites in Canada.
Advisers: Lead sell side advisory services were provided by Cork-based Deloitte Financial Advisory Partner Ronan Murray and Associate Director Derek Murphy.
Legal advice on the sell side was provided by Partners John Fuller and Ray Shanahan of JW O’Donovan.
PwC and Arthur Cox acted as advisers to Greenergy
Renatus Comment: Greenergy has been on a recent acquisition charge as it looks to expand its global retail presence. This deal follows recent activity in the space including Tesco’s sale of its petrol stations to DCC and the sale of the Tedcastle group, which operates as the Top Oil brand, to Candian-based Irving Oil.
Source: Greenergy
Deal Details: Highfield Veterinary Group Ireland has acquired the O’Dwyer & Jones Veterinary Clinics in Clane, Maynooth and Edenderry. The financial details of the deal were not disclosed.
Highfield is Ireland’s largest indigenous Veterinary Corporate. This acquisition strengthens the Group’s foothold of the commuter belt in to Dublin, with close to 20 vets and over 40 staff at 7 sites.
Advisers: Highfield was advised by Patrick O’Shea of Wallace Corporate Council (legals) and Conor Woods of Woods and Partners (financials).
John Murphy of Murphy Power and Associates (financials) and Joseph Curran of Daniel J. Reilly and Co (legals) provided sell side support.
Renatus Comment: The Veterinary sector is experiencing significant change across Europe at present and this shows no sign of slowing down for the Industry here in Ireland, this being the 5th acquisition in 2 years for Highfield.
Source: Highfield Veterinary Group
Deal Details: Keywords Studios announced it has entered into a conditional agreement to acquire Heavy Iron Studios for a reported $13.3m(c.€11.2m). $4.5m of the consideration will be paid upfront, split between $4m of cash and the remainder through the issue of shares. The remaining consideration of up to $8.8m will become payable in 2 years post-completion based on performance targets and will be a mixture of cash and shares.
LA-based Heavy Iron, founded in 1999, is primarily focused on high-end console and PC games. Renowned as a high-quality studio, it has recently worked on Marvel’s Avengers with Crystal Dynamics and the Call of Duty franchise with Activision, as well as multiple ports and remasters, including the full series of Disney Infinity games.
This is the ever-expanding Keywords’ third acquisition since its recent £100m placing with more deals on the pipeline, according to reports.
Advisers: None mentioned
Renatus Comment: This acquisition signifies that Keywords Studios is one of the most active players in this market. Since its share placing in May, Keywords has acquired Coconut Lizard, Maverick and now Heavy Iron adding scale and widening its service offering to its clients. This acquisition is unique however as this is its first investment in the west coast of America which is a hub for gaming development companies and is home to a lucrative pool of talent. Keywords has utilised selective acquisitions to become the go-to provider of video game services. This strategy has been complementary to its organic growth and has been very rewarding to shareholders. Since the IPO in 2013, the shares have nearly 15x in value.
Source: Keywords Studios Press Release
Deal Details: Sunrise Medical has completed the strategic acquisition of paediatric industry leaders, Leckey and Firefly. The deal consideration was not disclosed.
Sunrise Medical, headquartered in Germany, is a world leader in the innovation, manufacture and distribution of advanced assistive mobility devices and solutions. It operates in 18 countries employing over 2,200 people. It distributes to more than 130 countries under its own 15 proprietary brands.
Established in 1983, Leckey is a globally recognised pioneer in the research and development of products that help children and adults with disabilities to go, do, enjoy and participate in everyday activities throughout the day and night.
Designed by Leckey, Firefly range of products provide postural support equipment for children with special needs.
Advisers: Deloitte Ireland Financial Advisory Transaction Services team, led by partner Marc Rogers, together with Tax team provided due diligence services to Sunrise Medical in relation to its agreement to acquire James Leckey Design Limited
Renatus Comment: Prior to the transaction James Leckey Design Limited was owned 100% by James Leckey. In FY19 the company generated a turnover of c. £19.3m and an EBITDA of c. £2.1m.
Source: Sunrise Medical
Deal Details: Crotty Insurance Brokers Ltd has been acquired by Global Risk Partners (GRP) for an undisclosed sum.
Crotty, founded by Finbarr Crotty in 1994, is one of the leading independent commercial insurance brokers in Dublin. Specialising in Renewable Energy, Construction and Professional Services industries among others, Crotty offers tailor-made insurance solutions and services.
GRP, founded in 2013, is becoming one of the UK’s leading independent insurance intermediaries with Gross Written Premium in excess of £800m and more than 1,600 employees.
In June 2020, Searchlight Capital Partners, a global private investment firm, acquired a majority stake in GRP.
Advisers: Crotty was advised by Key Capital (led by Jonathan Dalton) who acted as lead corporate finance advisor, Crowe who provided financial and tax advice and Wallace Corporate Counsel who provided legal advice.
Matheson provided legal advice and KMPG provided financial and tax advice to GRP.
Renatus Comment: This acquisition is a continuation of the consolidation trend that is playing out in the local brokerage sector. The most recent accounts for Crotty Insurance Brokers is for the period ending December 2018 and show the company generated an operating profit of c. €830k off c. €2.77m of turnover.
Source: Crotty Insurance
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 businesses EBIT or EBITDA less average Capital Expenditure are often better measures. YoY is an acronym for the year-on-year movement in turnover, EBITDA, etc.
Based in Galway, Barr Madra Limited is a highly specialised unified network solutions provider.The business primarily sells, installs and maintains IT networks and provides connectivity solutions to customers in Ireland, the UK and the EU. Barr Madra has a number of subsidiaries including PlanNet 21 Communications, Agile Networks, amongst others.
In its latest fiscal year, the company saw revenue decrease by 1.7% to c. €40.3m while EBITDA increased by 12.2% to c. €6.7m. Gross margins increased c. 5% to 37% in FY19 due a marginal reduction in the cost of sales.
The company had a net cash increase of c. €4.9m leaving an ending cash balance of c.€19.08m. The most significant cash movement was the €1.29m spent on acquiring a new business.
The company employed an average of 99 people in FY19 at a cost of c.€8.29m .Barr Madra Limited is owned by Peter Carroll (38.7%), Michael Hannon (31.3%), Denise Tormey (10%), Sean Ruane (10%), Naomi Mulchrone (5.8%) and Eyesp (Ireland) Limited (4.2%)
Headquartered in Dublin, Ocuco Limited offer a comprehensive suite of optometric and ophthalmic software products for eye care professionals, optical retail store and lab stakeholders.
In its latest fiscal year, the company saw revenue increase by 22.5% to c. €35.2m while EBITDA also increased by an impressive 49% to c. €9m.
The company had a net cash increase of c.€1.56m leaving an ending cash balance of c. €2.67m. The most significant drain on cash was the c. €2.92m of capitalised software development costs and c. 860k of Fixed asset purchases. The company also made €1.96m worth of term loan repayments.
The company hired an extra 29 people in FY19 bringing the total headcount to 237 at a cost of c.€15.2m. Leo MacCanna is referenced as being the ultimate controlling shareholder in Ocuco limited through the his ownership of MacCanna Holdings Limited, the ultimate parent company.
Ardan Advisory is an investment holding company that operates a number of popular bars and restaurants, nightclubs in Dublin. These include Opium, NoLita, Dame House, Cafe en Seine and the Mercantile hotel to name a few.
In its latest fiscal year, the company saw revenue increase by a marginal 0..4% to c. €29.8m while EBITDA increased by c. 2% to c. €5.2m. Gross margins remained at roughly 68%.
The company had a net cash increase of c.€291k leaving an ending cash balance of c.€3.2m. The most significant drain on cash was the c.€9.58m spent on purchase of tangible assets. This investment is part of the groups €30m strategic Capital Expenditure programme which began in FY17. The company took out c.€7.7m in bank and shareholder loans to facilitate this Capex.
The company employed 312 people FY18 at a total cost of c.€9.19m. The Parent company to Ardan Advisory is JT Magen (Capital Bars) LLC based in the US of which Maurice Regan and Michael Breslin are reported to be shareholders in.
Who: Digital marketing software company Xtremepush, founded in 2014 by former Connaught Rugby player Tommy Kearns and his business partner Kevin Collins, has raised funding.
What: €4.25m investment comes from boutique lender Beechbrook Capital.
Michael Neary and Paul Murray of Grant Thornton provided the financial due diligence advisory for Beechbrook. Cian Fenton of RDJ provided legal advisory for Beechbrook.
Why: The debt raised from Beechbrook Capital is intended to be used for bolt on acquisitions, to hire staff for a sales office in New York and to expand its European operation
Source: Irish Times
Who: Luxury yogurt business Clandeboye Estate raises funds to invest in a new factory in Co Down.
What: £470k (c.€513k) funding pledged by the Economic development agency invest NI will be used as part of the £2m (c.€2.18m) required to fund the project. The project is also part financed by the European Regional Development Fund under the Investment for Growth and Jobs Programme 2014-2020.
Why: The funding will go towards the new factory and machinery which will enable increasing the capacity to produce up to 80 tonnes of yoghurt per week, over four times what it normally produces.
Source: Belfast Telegraph
Who: Venture Capital firms have been invited to apply for additional capital to invest in Irish start-ups impacted by Covid-19.
What: €10m in additional funding is available from the Enterprise Ireland Seed and Venture Capital Scheme. This financing boost is an addition to the €175m it has already made available thought the scheme.
Why: The funding will be used for Irish venture capital funds to invest in portfolio companies that have been hit hard by the coronavirus pandemic.
Source: Irish Times
Who: Cavan-based building insulation giant Kingspan has raised funding through sales of ‘Green’ bonds.
What: €750m was raised through the sale of green bonds bringing its financial power to €2bn. The sale of these green bonds requires the money raised to be used for environmentally-friendly investments.
Why: The funding will provide long-term capital to further develop the overall business.
Source: Irish Examiner
Who: Webdoctor, a company founded by Oisin Kim and Sylvester Mooney that has developed high-definition video software for medical consultations.
What: The company has raised €1.85m in funding at a reported valuation of €20m from backers including James Meyler (Orix Aviation), Paul Collins’ family (Remcoll), Cyril McGuire (Trintech), Garry Lyons (former Mastercard chief executive) and Paul Lowry (Nexala)
Why: There was intended use for the funds stated.
Source: The Business Post
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.
Ian Kehoe wrote an excellent article in the Currency during the week indicating that sources suggest CGT reductions are coming possibly with short term life and possibly with conditions.
The Sunday Times today suggests any cut maybe in conjunction with a scaling back of entrepreneurs relief.
The Business Post claim the greens will veto any movement on the rate. Fianna Fail made clear in its manifesto that they were going to reduce it to 25% from the current punitive rate of 33%.
It was not made explicit in the program for Government, possibly not to disincentivise transactions between the publication of the programme and the next budget.
In 1997 Charlie McCreevy halved it to 20% and almost doubled the total tax take which shows that a material move should bring in more money via increased transactional activity and avoid a lot of off-shore activity.
A link to the Ian Kehoe’s article is here.
65.1%
The year-on-year decrease in the commercial traffic at State airports for August 2020, according to The Irish Aviation Authority (IAA). @irishexaminer
0.5% & 6%
The year-on-year increase in the value of Irish goods exports and imports, respectively, for July 2020 amounting to €13,4bn & €8,4bn. Exports of Medical and Pharmaceutical products accounted for 37% of total exports, according to @CSOIreland
35%
The year-on-year decline in the new mortgage agreements for July 2020 amounting to the total value of €556m, according to the Central Bank of Ireland. @RTEbusiness
3%
The year-on-year increase in the Northern Ireland’s average house price for Q2 2020 amounting to £141,130, according to @NISRA @BelTel
0.5%
The year-on-year decline in the Irish residential property prices for July 2020 with an average price of €259,000. This is the first annual fall since May 2013, according to @CSOIreland
3.2% & 1.8%
The year-on-year decrease and increase in the agricultural input and output price indices, respectively, for July 2020, according to @CSOIreland
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