Renatus Weekly M&A & Company Performance Private Equity Newsletter 20/11/2022

Deal Details: We are delighted to announce that Renatus Capital Partners, backed by a collection of successful Irish businesspeople and the Ireland Strategic Investment Fund, is now an investor and partner in Herdwatch, a livestock management platform. The partnership will allow us to support the management team’s exciting growth plans.

Herdwatch is a farm management software app and platform that digitises and streamlines livestock farming, helping farmers in Ireland and the UK save time, eliminate paperwork and make better decisions in their farming operations. The app saves farmers an average of 3 hours a week on paperwork, according to a recent member survey by the company which received over 1,600 responses. It is used on over 18,000 farms in Ireland and the UK at present. It is fully approved and integrated with the Department of Agriculture and fully compliant with ICBF and Bord Bia.

Earlier this year the company also launched Flockwatch, a platform allowing sheep farmers to track ewe and flock performance and streamline compliance. Plans are in place to launch Flockwatch in the US, Canada, New Zealand and Australia in the near future.

Herdwatch was founded in Roscrea, Co. Tipperary in 2011. Fabien Peyaud, co-founder and CEO, and founder member FRS Farm Relief Services, will remain significant shareholders in the business. Herdwatch currently employs 60 people and plans to increase this to 80 over the next 2 years to support its international growth and farm digitalisation efforts.

Advisers:
Renatus:
Legals: Wallace Corporate led by Sean Wallace and Alban O’Callaghan.
Tax: Hogan & Associates led by David O’Neill.
Commercials: IFAC led by David Leydon.

Herdwatch:
Legals: Hallissey & Partners Solicitors led by Paul Westcott.

Renatus Comment: This is Renatus’ ninth investment and its sixth from its second fund. Fabien Peyaud, CEO and co-founder of Herdwatch said: “We are extremely proud of our achievements to date, but there is so much more we can do to help farmers across the world. We have the ambition, fantastic people on the team, and now the balance sheet to match. This is the start of an exciting new chapter in the Herdwatch story. Watch this space.” For a brief explanation of what Herdwatch can do for farmers, visit here.

Source: Renatus

Deal Details: Suir Engineering has been acquired by UK private equity group Duke Street for an undisclosed sum. The completion of the transaction will be subject to regulatory approvals.

Suir Engineering is a Waterford-based provider of mechanical, electrical, and instrumentation engineering services and employs c. 1,300 people. In FY20, the business reported turnover of c. €156.8m which converted to an EBITDA of c. €13.6m. The business was owned by EDF Energy.

Duke Street is a private equity firm which has been investing in the European mid-market buyout space since 1988.

Advisers:
EDF Energy:
Corporate Finance: EY deal team from France (led by Arnaud De Giovanni & Aleks Stoilov) and Ireland (led by Martin Treacy).

Suir Engineering:
Corporate Finance: BDO led by Richard Duffy.
Tax: BDO led by Mark Hynes.
Legal: McCann FitzGerald led by Ben Gaffikin.

Duke Street:
None Mentioned.

Renatus Comment: Suir Engineering is no stranger to M&A activity. In 2007, Suir Engineering was bought by Imtech in a cash deal for a reported €30m. In 2017, EDF Energy Services bought Suir Engineering as part of the acquisition of the Imtech UK & Ireland group from Endless, a UK private equity group that backed a management buyout of the businesses in 2015. This Duke Street transaction includes investment by Suir Engineering’s senior management team. It will enable the business to consolidate its position in the provision of mechanical, electrical, and instrumentation engineering services.

Source: Independent

Deal Details: International insurance broker and consultant NFP has acquired Dublin-based health and life insurance advisors Tailored Finance Limited. No financial consideration was disclosed.

Tailored Finance is an Irish, full-service health insurance consultancy firm established in 2008. It is owned by Managing Director Jeremy Tucker. In FY21, it reported a turnover of c. €1.4m which converted to an EBITDA of c. €50k.

NFP is a global insurance business based in the USA. Its service offering includes brokerage, consultancy and wealth management. It has over 250 staff in the UK and Ireland. The business’ Irish operations reported a turnover of c. €1.9m.

Advisers:
Tailored Finance:
Corporate Finance: Grant Thornton led by Robbie Doddy and Michael Neary.
Legal: Dillon Eustace, led by Mark Thorne and Philip Lea.

NFP:
Legal: Flynn O’Driscoll LLP, led by Cian O’Leary, Julian Cunningham and Daniel Hackett.
Tax: Crowe led by Cormac Doyle and Niamh O’Grady.​​​

Renatus Comment: This is NFP’s fifth acquisition since entering the Irish market two years ago, following the acquisitions of Simon Shirley Advisors, ReSure, HMP Insurance and Pension Advisors and Aiken Insurance. NFP, backed by US private equity firms Madison Dearborn and HPS Investment Partners, has expressed plans to use the group’s new Irish holding company as an acquisition vehicle in the continental European market. The deal sees a continuation of the trend of foreign-domiciled consolidators in the Irish financial services space.

Source: Business Plus

Deal Details: Ergo has acquired BoatyardX in a deal reported to be worth more than €10m.

Ergo is a privately-owned IT services provider in Ireland, headquartered in Dublin, with offices in Cork and Limerick as well as the UK and US. The business was founded by John Purdy and Tim Sheehy in 1993. In FY21, the business reported turnover of c. €87.1m, which converted to an EBITDA of c. €2.8m. The business is owned by John Purdy, Marc Murphy, Audrey Purdy and various others.

BoatyardX builds native cloud applications for more than 20 clients. The business is part of Shipyard Technology Ventures, founded by Garry Lyons, the former global head of digital and innovation with Mastercard. In FY21, the business reported turnover of c. €4.4m. The business was majority owned by Garry Lyons with various other investors and individuals also holding stakes.

Advisers:
BoatyardX:
Legal: Taylor Wessing led by Adam Griffiths with assistance from Rachel Mc Causland (Corporate), Kevin Keenan (Corporate), Ameer Gazder (Corporate), Mark Owen (IP and Media) and Noelle Huang (IP and Media).

Ergo:
Corporate Finance: Grant Thornton, led by Paddy Dillon and Tom Roche.

Legals: Shaun O’Shea, Niall O’Brien, Damian Maloney, Deirdre Cahill and Emily Harrington of Beauchamps.

Renatus Comment: Although there has been negative sentiment surrounding many big tech companies recently, consolidation at the lower end of the market is showing no immediate signs of abating. This transaction marks Ergo’s fifth acquisition since 2010 as the business accelerates a new phase of growth. Earlier this year, Ergo acquired Limerick-based Asystec in a deal worth more than €25m. Over the next 3-5 years Ergo reportedly forecast revenues to rise to €250m based on organic and inorganic growth.

Source: Irish Times

Deal Details: Ayrton Group has acquired KTC Safety. Deal consideration has not been disclosed.

Ayrton Group is a workplace safety training and consultancy firm that offers a suite of safety and risk management resources to a client base in Ireland, Europe and the UK. The business was founded in Cork by Kieran Linehan, as Health & Safety Services, in 1993. The business is now headquartered in Dublin. The business does not publish turnover or EBITDA information and is owned by Kieran and Helen Linehan, Matthew Browne and Patrick O’Neill.

Kearney Training & Consultancy is an occupational health and safety services firm that offers its services to industries including quarrying, forestry, retail, education, transport, agriculture, rail, hotel and catering. The business was founded in 2019 by David Kearney, who also owned the business. It is headquartered in Laois. In FY21, the business had a turnover of c. €1.1m, it did not report EBITDA.

Advisers:
None Mentioned.

Renatus Comment: The field of safety and risk management has evolved in recent years. Historically, the focus of companies such as Ayrton and KTC was on traditional workplace safety in industries such as the construction and industrial sectors. Although this will remain a key offering, workplace safety now takes into account the employees’ physical and mental wellness. This marks Ayrton Group’s first acquisition, the first step in its wider growth strategy. As the demands for workplace safety and legal compliance evolve, it will enable Ayrton Group to diversify its product offerings and improve its capacity.

Source: Business Plus

Deal Details: Corlacky wind farm has been acquired by ERG SpA.

ERG SpA is an Italian PLC founded in 1938 that specialises in renewable energy projects. In FY21, it reported revenue of €625.8m, which converted to EBITDA of c. €393.8m.

Corlacky wind farm is a proposed 36.3MW wind farm at Corlacky Hill in Co. Derry. It will consist of 11 turbines and was granted planning permission in March 2021. It is controlled by Corlacky Energy Limited, a subsidiary of Renewable Energy Systems (RES), a UK-based renewable energy project developer led by CEO Ivor Catto.

Advisers:

ERG SpA:
Legal: Arthur Cox led by David White (Corporate and Commercial) and included Alastair Todd (Property), David Greatorex (Property) and Patrick Loughridge (Corporate and Commercial).

Corlacky Energy:
None mentioned.

Renatus Comment: ERG SpA operated as a traditional energy company for many decades, specialising in oil refinery. However, it exited this industry in 2013 and has since focused on renewable energy. It is now the largest operator of onshore wind projects in Italy and amongst the top ten in Europe. To date this year, it has acquired renewable energy projects in Italy, Spain and the Netherlands. According to Wind Energy Ireland, onshore wind farms supplied 32 per cent of the country’s electricity up to the end of August.

Source: Arthur Cox

Deal Details: Dental Care Ireland has acquired Beechwood Dental Limited. For an undisclosed sum.

Dental Care Ireland is a group of over 30 dental practices nationwide. It was established in 2014 by brothers Colm and Kieran Davitt. The business reported FY20 turnover of c. €11.7m. The business is majority owned by Nicholas Lowcock.

Beechwood Dental Limited is a seven surgery Dental practice in Ranelagh, owned by Peter Casey and Alex Creavin. The business does not report turnover or EBITDA information.
​​

Advisers:
Dental Care Ireland:
Legal: Eversheds Sutherland team led by Gavin O’Flaherty (Corporate) and included Joe de Paor (Corporate), Alan Connell (Tax), Robert Dever (Tax), Orlagh Caffrey (Real Estate) and Aidan Rafferty (Company Secretarial).
Financial: MedAccount led by Stephen Lynch.

Beechwood Dental:
None mentioned.

Renatus Comment: Insider reports suggest that this is one of the biggest deals in the Irish dental space to date. The dental sector has been slower to consolidate in recent years than many comparable sectors. However, with players such as Dental Care, Torquay/Alexandra Dental and a number of international players, it is likely to consolidate further in line with what we have seen in insurance, veterinary, pensions and others.

Source: LinkedIn

Deal Details: Celtic Sales has been acquired by Groupe Guillin.

Celtic Sales is a Dublin-based company that specialises in the distribution of food packaging in the form of plastic, cardboard, pulp, and wood on the Irish market. In FY21, it reported turnover of c. €9.2m, which converted to EBITDA of c. €0.2m. The business was owned by Sean Byrne, Adelaide Byrne, Patrick Byrne, Richard Walsh and Brian Walsh.

Groupe Guillin is a France-based public company established in 1972. It is a European leader in food packaging solutions and associated materials. In FY21, it reported revenue of c. €660.4m which converted to EBITDA of c. €122.6m.

Advisers: None mentioned.

Renatus Comment: This acquisition comes on the back of Groupe Guillin’s takeover of Ciesse Paper, an Italian food packaging business, in September this year. We have seen several large players pursue aggressive consolidation plays in what is a relatively fragmented market. Ireland’s own Zeus Packaging, led by Brian O’Sullivan, is a great example of this. You can listen to the Renatus podcast with Brian here.

Source: Groupe Guillin press release

Deal Details: UK-based AMT Coffee has been acquired by the SSP Group. The deal consideration was not disclosed.

AMT Coffee was founded in 1993 by three brothers, Alistair, Angus and Allan McCallum-Toppin. The business now operates nine coffee outlets in Ireland and eighteen in the UK. The business reported FY21 revenue of £7.6m and was majority owned by David Maxwell.

SSP Group is a British multinational contract food service company, with headquarters in London, England. It operates more than 2,800 branded catering and retail units at over 180 airports and 300 railway stations across 35 countries. The business reported FY21 revenue of c. £834m and is led by Patrick Coveney.

Advisers: None mentioned.

Renatus Comment: This deal comes on the back of AMT entering pre-pack administration and will see various AMT Coffee outlets close. SSP primarily focuses on the travel sector, with outlets in airports and train stations, servicing a number of prominent travel hubs. Therefore it is no surprise that the Irish outlets being acquired include Dublin Airport, Cork Airport, Heuston Station, Connolly Station, Kent Station in Cork, Colbert Station in Limerick and Pearse Street Station in Dublin, while Dun Laoghaire and Bray outlets are expected to close.

Source: The Independent

Deal Details: Smurfit Kappa has agreed to acquire Spanish Pusa Pack S.L. The deal consideration was not disclosed.

Smurfit Kappa, based in Dublin, manufactures, distributes, and sells paper-based packaging products. It operates through two segments, Europe and the Americas. The group is led by CEO, Anthony Smurfit, grandson of the original founder, Jefferson Smurfit. The business had FY21 revenue of €10.7bn, which converted to an EBITDA of €1.5bn.

Pusa Pack S.L is a bag-in-box packaging plant located in Onda, Spain. The business did not report turnover or EBITDA information and was previously owned by Vincente Salva.

Advisers: None mentioned.

Renatus Comment: Smurfit Kappa appears to be having an excellent 2022, with recent reports showing revenues of €9.7bn for the first nine months of 2022, an improvement of 33% year-on-year.

Its share price is down with the rest of the world, but the fundamentals of the business seem sound, and it also has a good position in the world of ESG.

Source: Smurfit Kappa Press Release

Rockpool Acquisitions propose the acquisition of Amcomri Group

Deal Details: Belfast-based Rockpool Acquisitions has agreed heads of terms to buy London-based Amcomri Group for £22.3m.

Amcomri Group is a UK-based acquisitive group of engineering and manufacturing businesses. It has a portfolio of nine SMEs that provide a range of specialist engineering and equipment services to the power, rail, petrochemical, process and production electronics industries in the UK and Ireland. The business was founded in 2017 and is led by Paul McGowan. The business does not report turnover or EBITDA.

Rockpool acquisitions is a special purpose acquisition company (SPAC) that was co-founded by Mike Irvine, Richard Beresford and Neil Adair. It was listed on the London stock exchange in 2017.

Source: Rockpool Acquisitions Press Release

Founded in 1964, the Agricultural Trust owns various publications, including the Irish Farmers Journal, Irish Country Living, The Irish Field, Irish Country Magazine, Irish Garden Magazine, Irish Dairy Farmer and the Irish Beef and Sheep Farmer. The company also holds a stake in Traction Media, Farmers Market, Martbids, Tullamore beef and sheep demonstration farm, and a range of strategic investments in ag-tech start-ups and property.

The business reported an FY21 turnover of c. €16.6m which converted to an EBITDA of c. €1.7m. This represented an 8.3% and 38.0% increase, respectively. The principal driver of this improved EBITDA margin was good control of operational expenses.

Significant post-EBITDA expenses included the purchase of plant and machinery amounting to over €630k and tax on operating activities of almost €270k. The business closed FY21 with a closing cash balance of c. €5.2m, an increase of €1.4m on the previous year.

Boran-Mopack Limited is the Northern Irish arm of Boran Packaging, a leading manufacturer of flexible packaging. It was formed in 2003 when Kildare-based Boran acquired Tyrone-based Mopack Systems Limited from owner Pat Blee. The business is currently owned by Mairtin Boran, Cathal Blee, Sean Boran and the reps of Cyril Doherty (RIP). Boran Packaging’s Republic of Ireland operations are controlled by Boran Plastic Packaging Limited and are not reflected in these accounts.

In its financial year to December 2021, the business generated a turnover of c. £21.7m, an increase of 26.2% year-on-year. This converted to c. £3.9m EBITDA, an increase of 19.4%. The increase in EBITDA was driven by the company realising operating leverage.

The business finished the year with a cash balance of c. £6.6m, a c. £1.3m increase on FY20. Significant post-EBITDA cash movements included an investment working capital and the purchase of tangible fixed assets.

The business employed an average of 85 people during the year at a total cost of c. £2.3m.