Renatus’ Weekly M&A Newsletter – 14/05/2023May 14, 2023
Renatus’ Weekly M&A Newsletter – 28/05/2023May 28, 2023
Renatus Weekly M&A & Company Performance Private Equity Newsletter 21/05/2023
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
Michael Dwyer who successfully exited Pigsback.com and is a good friend of Renatus, has recently published a book titled ‘from the arena’ drawing from Theodore Roosevelt’s famous speech about those who ‘dare greatly’ and ‘strive valiantly’.
Michael gave a very insightful interview about the book and his rollercoaster journey yesterday on Richard Curran’s show.
It is a great listen and it gives some very good insights into the mental health challenges surrounding entrepreneurs and why a life partner who understands the entrepreneurial journey, like Michael has in his wife Karen, is crucial. It is a very honest entrepreneurial story and well worth a read/listen.
The book can be bought here:
DCC plc acquires Alternative Energy Ireland
Deal Details: DCC plc has acquired Alternative Energy Ireland. Deal consideration was not disclosed.
DCC plc is an international sales, marketing, and support services group, based in Dublin. It operates through three divisions: Energy, Healthcare and Technology. DCC was founded by Jim Flavin in 1976 and was listed on the Dublin and London stock exchange in 1994. The group is led by CEO Donal Murphy. In FY Mar 23 the business reported turnover of c. £22.2bn, which converted to EBITDA of c. £800.1m.
Alternative Energy Ireland (‘AEI’) is a Dublin-based renewable energy specialist. The company’s services range from single technology installations to full energy audits and bespoke multi-solution installation. AEI was founded in 2007 by Steven Bray and currently employs c. 20 people. The business does not report turnover or EBITDA information.
Alternative Energy Ireland
Financial Advisor: PKF led by David Lucas and Conor O’Rourke.
Tax: PKF led by Kevin Quinn.
Legal: Philip Lee led by Inez Cullen and Eoghan Doyle.
Financial Advisor & Tax DD: PWC led by Orla Fisher.
Legal: Eversheds Sutherland, led by Gavin O’Flaherty and Alex Kirwan.
Renatus Comment: As part of its green energy services plan announced last year, DCC is aiming towards a net-zero carbon future and as part of this, the business is employing a clean energy acquisition play. It completed a series of bolt-on acquisitions in 2022, including that of PVO International, a Netherlands-based distributor of solar panels. In its financial results for year-end March 2023, released this week, it announced that the ‘Services and Renewables’ part of its energy division, now accounts for 28% of EBITDA (up from 22%). It will be hoping that by shifting the focus of the business away from oil and gas, it will improve the sub-8x EBITDA mutliple that it currently trades at, which lags most of its peers.
Source: PKF Press Release
MCR Group receives investment from Freshstream
Deal Details: MCR Group has received investment from Freshstream. Deal consideration was not disclosed.
MCR Group is a Dublin-based outsourced services provider. It was founded in 1996 by Douglas Taylor. The two other principal shareholders are Kealan Turley and Donall Barrett. In FY Dec 21 it reported turnover of c. €112.1m which converted to EBITDA of c. €15.2m
Freshstream is a UK-based mid-market investment firm established in September 2015.
Corporate Finance: Clearwater International led by John Sheridan, Michael Quinlivan, John Devine and Conor Kilgallen.
Due Diligence: KPMG led by Mark Collins (FDD), Alan Bromell (Tax), Gavin Hillery, Darran Woods and Domhnaill Drumm.
Corporate Finance: Grant Thornton (UK & IRE) led by Usman B Malik, Gareth Cosgrove, Chris Thompson, Safwan Chowdhury, Delphine Diers, Carl Parker, Harry Thorniley-Walker, Chris Sharpe, Jake Troughear and Edward Orme.
Renatus Comment: The Times reported back in February that MCR Group was pursuing a sale and that any deal would likely involve a consideration in excess of €100m. The price tag is warranted given its strong financial performance and blue-chip customer base that includes the likes of RTÉ, Google, Aer Lingus, Amazon and Ikea. Consolidation makes sense in this space as both high staff and borrowing costs continue to strain what is already a low-margin industry. Trade players such as Bidvest Noonan were tipped as likely suitors for the business given their acquisitive recent history. However, having now received fresh equity backing, MCR Group is probably more likely to be the acquirer than the acquired, over the next few years.
Source: Clearwater International Press Release
SPORIFY acquired by ArisGlobal
Deal Details: SPORIFY has been acquired by ArisGlobal for an undisclosed amount.
SPORIFY is a single solution to match, maintain, synchronise, and integrate SPOR (Substances, Products, Organisations, and Referentials). SPORIFY provides ISO IDMP-compliant SPOR data to feed regulatory activities across the health and safety sector. The business is owned by Conor Corr and Gary Wilson. It does not report turnover or EBITDA information.
ArisGlobal is a US-based drug development technology platform. Nordic Capital acquired a stake in the business from the founding Abbhi family in 2021. In FY22, it was reported that its turnover was c. €130m.
Legal: LK Shields led by Marco Hickey, Lester Sosa-Villatoro, Ruairi Mulrean, Aideen Burke, Elizabeth Mara, Jane O’Grady, Eimear McCluskey and Emer Wilkie.
Renatus Comment: The acquisition will provide ArisGlobal with high calibre data capabilities to facilitate data cleanup. IDMP is a suite of five standards developed within the International Organization for Standardization (ISO) to facilitate the unique identification of medicinal products. It is reported that the SPOR data solution is utilised by five of the world’s top 20 largest pharmaceutical companies and by a series of European regulators. With the life sciences industry advocating for the synchronisation of global data standards, SPOR implementation will facilitate the reliable exchange of medicinal product information.
Source: LK Shields Press Release
Solartricity receives investment from David Moffitt
Deal Details: David Moffitt has led an investment in Solartricity for an undisclosed amount.
Solartricity is a Dublin-based wholesale supplier of solar PV panels and is a subsidiary of Turbotricity Ltd. Quentin Gargan set up a solar division in 2014 and will be retaining a minority stake in the business post-investment. It was reported that the business has tripled its revenue in two years and a new Managing Director is to be appointed.
David Moffitt is an ex-senior Smurfit Kappa executive and experienced entrepreneur who founded Tech Group Europe, a drug delivery device manufacturer that he has successfully exited. David is currently CEO of Kayfoam Woolfson, a Dublin-based mattress manufacturer, and will now assume the role of Chairman at Solartricity.
Corporate Finance: Solara Corporate Finance led by Karl Cleere.
Legal: BHSM LLP led by Joe McVeigh, Sinead Mannion and Stephen McVeigh.
Tax: McCarthy Tax led by Darragh McCarthy and Jennie Faughnan.
Legal: Wallace Corporate Counsel LLP led by Darragh O’ Dea and Alban O’Callaghan.
Tax and FDD: PwC led by Paul Tuite and John Finnegan.
Senior Debt Provider:
Bank of Ireland led by Pat Purcell.
Legal: Field Fisher led by Paddy Smyth and Jamie Woodcock.
Renatus Comment: Solartrictity is a wholsale supplier of PV panels to both residential and business customers. Solar Photovoltaic (PV) panels convert sunlight into electrical energy. This space in Ireland has grown substantially over the last decade with many new companies having sprung up along the value chain from supply to install to energy management. Gargan described as a ‘game changer’ the recent ability of Irish households to sell electricity back to the grid under the Micro-generation Scheme. When you combine this with the availability of SEAI grants & removal of VAT on solar panel installation, we would expect to see a significant increase in the uptake of solar in the coming years. This has become even more likely given the the energy price volatility experienced by consumers over the past 12 months.
This equity investment will help Solartricity increase its inventory levels which had been a limiting factor that restricted growth, due to the long lead times of c. 6 months involved in importing some devices. The financial backing combined with Moffitt’s extensive experience in scaling operations and growing capacity, should stand the company in good stead going forward.
Source: The Currency
Robinson Quarry Masters acquired by Breedon Group plc
Deal Details: Robinson Quarry Masters has been acquired by Breedon Group plc. This deal was announced along with two UK acquisitions of Broome Bros Ltd and Minster Surfacing Ltd. The three deals were reported to be worth a combined value of c. £19m.
Robinson Quarry Masters is a Co. Antrim quarry business located on a 150 acre site between between Larne and Ballymena. It sells to housing, commercial and infrastructure end-markets. It was previously owned by Alexander and Stephen Robinson. The business does not report turnover or EBITDA information.
Breedon Group plc is a UK-headquartered construction materials company. The group was established in 2008 and is led by CEO Rob Wood. In FY Dec 22 it reported turnover of c. £1.4bn which converetd to EBITDA of c. £224.8m. It is publicly listed and just this week moved from the AIM to the London Stock Exchange.
Advisers: None mentioned.
Renatus Comment: In 2018 Breedon Group purchased the Lagan Group, a Northern Irish construction business, for c. £455m. Since then it has pursued a strategy of vertical integration, acquiring businesses along the value chain in building materials, from quarries to concrete manufacturers as well as other construction & material manufacturing businesses. Interestingly, CEO Rob Wood said after this week’s deals were announced that despite the move to London’s premier stock exchange, the key to their M&A success remains their internal knowledge of small, local, independent and family-owned businesses.
Source: Irish News
Allied Risk Management acquired by Arthur J Gallagher subsidiary Artex Risk Solutions
Deal Details: Allied Risk Management has been acquired by Artex Risk Solutions, Inc.
Allied Risk Management is a provider of captive insurance/reinsurance management services estd. in 1990. It was formerly known as Zurich International Services prior to its name change in 2002. It was owned by Larry Sherin and Frank Coyle. In FY Dec 21 it reported turnover of c. €1.2m.
Artex Risk Solutions is a manager of insurance and alternative risk transfer solutions. It was estd. in 1997. It is a subsidiary of US-based insurance giant. Arthur J. Gallagher. In FY Dec 22 Arthur J Gallagher reported turnover of c. $8.3bn which converted to EBITDA of c. $2.4bn.
Allied Risk Management:
Corporate Finance: FinRes led by John Hannon & John Lacy.
Legal: Walkers led by Eoin Ryan
Artex Risk Solutions
Legal: McCann Fitzgerald led by John Neeson.
Renatus Comment: Arthur J Gallagher established an on-the-ground presence in Ireland last year with its acquisition of Innovu in June and subsequent deal to acquire Doyle Mahon Insurances. Its global consolidation play continues having completed 10 bolt-ons in Q1 alone. Unlike some of the insurance roll-up plays we have seen, Gallagher is not just targeting brokers, with this acquisition adding to its captive and alternative risk unit.
The idea of captive insurance is to provide coverage for the risks faced by a parent company by assuming the role of the insurer and retaining the risks within a ‘captive’ entity. Allied Risk Management also provides actuarial services and will bolster Gallagher’s capabilities in this regard.
Source: Cap IQ
Imperial Hotel Cork acquired by The Louis Fitzgerald Group
Deal Details: Imperial Hotel Cork acquired by The Louis Fitzgerald Group, subject to CCPC approval. Deal consideration was not disclosed.
The Imperial Hotel Cork is an historic 19th century hotel with 123 guest rooms. It has been part of the Flynn collection for the past 15 years. It does not report turnover or EBITDA information.
The Louis Fitzgerald Group is one of the largest family-run hospitality groups in Ireland and has over 19 pubs, restaurants and hotels. It is owned by Louis & Helen Fitzgerald. It does not report turnover or EBITDA information.
The Imperial Hotel:
Legal: RDJ led by Diarmaid Gavin, Maria Walsh, Liam O’Keeffe (Corporate and Commercial), John Dwyer (Real Estate), Cian Fenton (Banking) and Mark Ludlow (Tax).
The Louis Fitzgerald Group:
Renatus Comment: The Imperial Hotel is steeped in Cork history and has hosted many famous guests over the past 200+ years including Daniel O’Connell, Frederick Douglass, Charles Dickens and Grace Kelly. Infamously, it is also the place where Michael Collins spent his last night before he was killed in an ambush at Béal na Bláth in 1922.
The iconic hotel now has switched hands to another seasoned hospitality operator in the Louis Fizgerald Group who also operate well-known Dublin pubs Kehoes and Bruxelles, as well as The Louis Fitzgerald Hotel and The Arlington Hotel.
Source: RDJ Press Release
Strathroy Dairy Limited is an Omagh-based provider of private label dairy products. The business is majority owned by Ruairi Cunningham and Patrick Cunningham.
In its financial year to July 2022, the business generated a turnover of c. £118.7m, an increase of c. 25% year-on-year. This converted to an EBITDA of c. £2.2m, an increase of c. 4% year-on-year.
Significant post-EBITDA cash movements include payments to acquire tangible assets of c. £1.2m and working capital investment of c. £2.7m. The business finished the year with a cash balance of c. (£4.3m).
The business employed an average of 154 people in FY22 at a total cost of c. £5.6m.
Impact Ireland (Metals) Limited is a company that specialises in the importation and distribution of steel and other metals. It is based in Tallaght Co. Dublin and also operates facilities in Cork and Belfast. It is owned by Daniel Clarke and Bernard Foley.
In its financial year to Apr 2022 the business generated a turnover of c. €38.9m, an increase of 46.1% year-on-year. This converted to c. €4.5m EBITDA, an increase of 117% year-on-year. The increase in EBITDA was driven by gross margin expansion and operating leverage realised in the business.
The business finished the year with a negative cash balance (overdraft) of c. €2.9m, a c. €2.5m decrease on FY21. This was primarily due to significant working capital investment totalling c. €5.6m.
The business employed an average of 74 people during the period at a total cost of c. €4.9m.
Who: Nory, the Dublin-based company that uses AI and automation to manage labour, inventory, marketing and other costs in the hospitality sector.
What: The business has raised €7m in a round co-led by Triple Point Ventures and Samaipata VC, with participation from previous investors Playfair Capital, Cavalry VC, and Circlerock Capital.
Why: The funding will be used for marketing and continued product development.
Advisers: Legal: Wallace Corporate Counsel LLP led by Alan Ryan, Graham Coyne, and Glynn Ladley.
Source: Irish Times
Who: Stafford Bonded, a provider of post-distillery whiskey solutions, based in Wexford and Waterford.
What: The business has raised €1.25m in a funding round that valued the business at c. €5m. Investors in the business included Rob Kearney and Tadhg Furlong.
Why: The funding will be used to launch the O’Driscoll’s Irish Whiskey brand.
Source: The Currency
Who: Senoptica, a Trinity College spin-out business focused on sensor technology that aims to combat food waste.
What: The business has announced a first close of €550k on its €1.5m funding round..
Why: The latest raise will allow Senoptica to gain regulatory approval, complete the retailer pilot and make its first sales.
Source: Business Plus
EXECUTIVE AND BOARD APPOINTMENTS
We in Renatus believe that more important than the deals are the people and we are pleased to provide you with details of key recent executive and board-level appointments.
The number of consecutive months in which construction activity in Ireland has declined, according to the PMI from @BNPParibas
The increase in advertised monthly rents in Q1 this year (vs. Q4 2022) to €1,750, according to @daftmedia
The rate of inflation in the Eurozone in April, according to @ECB
The number of housing construction commencement notices between January and April this year, a 6% increase on the same period last year, according to @DeptHousingIRL
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