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Renatus’ Weekly M&A Newsletter – 14/08/2022
August 14, 2022
Renatus’ Weekly M&A Newsletter – 28/08/2022
August 29, 2022
August 21, 2022

Renatus' thoughts on the public markets, Three Rock Group acquires Chrome Insurance, Press Up Group acquires a hotel and more in our latest M&A newsletter.

Renatus Private Equity Dublin, Ireland

Renatus Weekly M&A & Company Performance Private Equity Newsletter 14/08/2022

Dear Reader,

Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.

THOUGHT OF THE WEEK

 

While there is a mood of negativity around the economy with the various headwinds, it is notable that there have been a lot of positive movements in recent weeks in the public markets.

We have plotted the movements of Ireland’s, the UK’s and the USA’s primary indices. They are all up from a recent correction – ranging from 8% to 15% increases.

It should also be noted that the Irish and UK indices are broadly on par with where they were in the calm waters pre-Covid while the US’ S&P500 is 27% ahead.

There is a quote that says “If you don’t follow the stock market, you’re missing some amazing drama” – that has certainly been true in recent times. It has been a rollercoaster. Our takeaway is that the net position is that the markets say the world is in at least as good a place as it was pre covid.

P.S. – shares may fall as well as rise!

M&A ACTIVITY

Three Rock Group acquire Chrome Insurance

Deal Details: Three Rock Group has acquired Chrome Insurance. The deal details have not been disclosed.

​​​​​Three Rock Group is a private equity-backed insurance company. The business was formed in 2020 following Livingbridge’s investment in Chill Insurance. Chill Insurance was founded by Seamus and Padraig Lynch in 2006 and grew to be Ireland’s largest independent intermediary, with a c. 6% market share. Since the investment, Three Rock has added Ivernia and Quote Devil to the Group. The group raised €5.0m from an issue of share capital in 2020.

Chrome Insurance is an Irish-owned insurance brokerage that offers home, motor and travel insurance. The business was founded in 2009 by Barry Sheridan, Gerard McCann and Emmet Graham. It is headquartered in Dublin and currently employs 10 staff. In FY21 the business had a turnover of c. €1.6m, which converted to an EBITDA of c. €563k.

Advisers:
Three Rock Group:
FDD: BDO, led by Rory O’Keeffe.
Tax: BDO, led by Angela Fleming.
Legal: Flynn O’Driscoll, led by Alan O’Driscoll and supported by Deirdre Walsh.

Chrome Insurance:
None mentioned.

Renatus Comment: Consolidation plays in the insurance market are showing no signs of slowing down this year. This is the fourth insurance deal in the last month with Arachas acquiring Glennon Insurance, Aviva acquiring Azur Underwriting and Aston Lark acquiring Sparrow Insurances.

Financial services continue to be one of the busiest sectors for M&A in Ireland, continuing the trend highlighted in the Renatus H1 Deals Review.

Source: CapitalIQ

Press Up Group has acquired the Butler Arms Hotel

Deal Details: Press Up Group has acquired the Butler Arms Hotel in Waterville, Kerry. Deal details have not been disclosed.

Press Up Group is an Irish hospitality company that owns over 115 restaurants, bars, hotels, cinemas, golf clubs and gyms. The group was founded by Paddy McKillen Jr and Matt Ryan in 2009 and is headquartered in Dublin. In FY20, its most recently filed accounts, the group reported a turnover of c. €99.6m, which converted to an EBITDA of c. €9.1m. The Butler Arms Hotel is the fourth acquisition Press Up Group has made outside of Dublin, with it already owning the Dean hotels in Galway and Cork as well as Glasson Lakehouse in Westmeath.

The Butler Arms Hotel in Waterville is a 60-bedroom hotel located on the Ring of Kerry coastline. The business was founded in 1884. It was taken over by the Huggard family in 1915 and has been run by four generations of the family since. The business does not publish turnover or EBITDA information.

Advisers:
Press Up Group:
None mentioned

The Butler Arms Hotel:
Real Estate: JLL led by Daniel O’Connor

Renatus Comment: The hospitality sector was one of the most severely affected by the pandemic, particularly those with exposure to the city centre and not benefiting from the staycation. The sector is certainly recovering, but tourism numbers for July were still down 11% from the same month in 2019, according to the Irish Tourism Industry Confederation. However, there are some headwinds emerging with rapid inflation, shortage of key staff, the loss of the wage subsidy scheme and the temporary cut to a 9% VAT level for the sector expiring in February 2023.

Source: Business Post

Aspira merges with ProData Consult

Deal Details: Aspira has merged with ProData Consult. Deal details have not been disclosed.

Aspira is a Cork-based consulting and technology business that operates across consulting, resourcing, training, software development and managed IT services. It was founded by Pat Lucey and Colum Horgan in 2007. It currently has offices in Cork, Dublin and Amsterdam and employs c. 225 people. In FY21 the company had a turnover of c. €14.9m, which converted to an EBITDA of c. €1.3m.

Prodata Consult is a business and IT consultant with competencies ranging from software development to business management. It was founded in 1993 and is headquartered in Denmark. Anders Gratte leads the business as CEO. The company had a reported turnover of €452m in 2021.

Advisers:
Aspira:
Corporate Finance: Davy CF, led Michael Hussey and Lauren O’Sullivan
Legal: Flynn O’Driscoll, led by Pat Flynn, Cian O’Leary and Aonghas Keane.
Tax: Mazars, led by Gerry Vahey.

ProData Consult:
None mentioned.

Renatus Comment: Aspira has likely been a beneficiary of the strong demand for digital transformation services in recent times. This deal marks the first major move for Aspira’s new executive team, having appointed Peter Ryan as the business’ new CEO in March of this year.

Founders Pat Lucey and Colum Horgan are now taking more strategic roles in the business, having overseen its growth into an international operation from its founding 15 years ago. Pat Lucey was previously selected as an EY Entrepreneur of the Year finalist in 2020.

Source: Aspira Press Release

Bimeda acquires Afrivet

Deal Details: Bimeda has acquired Afrivet Southern Africa Proprietary Limited. Deal details have not been disclosed.

Bimeda is a global innovator, manufacturer and marketer of veterinary pharmaceuticals and animal health products. It was founded in 1960 by Dr Dan Tierney and is headquartered in Dublin. It has expanded to having a global network of over 800 employees across 11 countries in Europe, America, Africa and Asia. In FY20 the business reported a turnover of c. €40.8m, which converted to an EBITDA of c. €5.7m. Having been acquired by its current owners from the original founders in 1973, Bimeda has grown from being part of a three-company merger which included Constant Chemical Ltd and Osmond & Sons Limited to an international force in the veterinary medicine space.

Afrivet is a provider of animal health products and services for animal owners, farmers and veterinarians in Africa. Following the acquisition, Bimeda will have the largest footprint of any animal health company in Africa. It was founded in 2000 by Peter Oberem and is headquartered in Faerie Glen, South Africa. The business was reported to have a turnover of c. €25.0m last year.

Advisers: None mentioned.

Renatus Comment: Throughout the 1970s to 1990s, the business expanded organically into East Africa, the UK and North America. Bimeda’s more recent growth has been driven by a clear acquisition strategy post-2010, acquiring medical and vaccine businesses in Kenya, Brazil, the US, UK and France.

One of the most significant was the acquisition of the veterinary medicine portfolio of Grupo Unipharm in Central America in 2019, which coincided with a rise in revenues from €19.6m in 2018 to €34.3m in 2019.

Ireland has a strong group of family owned animal pharma companies with a global reach. Norbrook and  Chanelle are two others along with Bimeda who are leaders in a space normally dominated by multinationals.

Source: Bimeda Press Release

Connacht Hospitality Group acquires Galway Hooker

Deal Details: The Connacht Hospitality Group has acquired craft brewery, the Galway Hooker. Deal details have not been disclosed.

The Connacht Hospitality Group is a family business that owns The Connacht Hotel, The Hyde Hotel, The Residence Hotel, Galway Bay Golf Resort, An Púcán, 1520 Bar, Hyde Bar and Active 24. The group is owned and run by the Fitzgerald family from Clarinbridge, Galway. In FY20 it reported a turnover of c. €8.6m.

Galway Hooker is a well-known brewery based in Oranmore, Galway. Hooker Irish Pale Ale is the brewery’s flagship product. It was founded by Aidan Murphy and Ronan Brennan in 2006 who will remain in the company post-acquisition. The company is undergoing a period of expansion with plans to introduce new product lines, rebrand the business and expand into new export markets. The business does not publish turnover or EBITDA information.

Advisers: None mentioned.

Renatus Comment: Ireland is home to 16 of the top 20 global technology businesses as well as the top 3 providers of enterprise software. Irish IT companies are vying to grow and remain competitive which has led to the consolidation trend we have seen in the Irish market recently.

Logicalis reportedly aims to extend its specialist Microsoft and data-centric IT services capabilities across the UK and Ireland through this acquisition. Both companies have a wide variety of strong capabilities and blue-chip business partners hence the acquisition will yield both economies of scale and increased client satisfaction.

Source: Real Wire Press Release

COMPANY PERFORMANCE

McCarthy Plant & Agri-Sales Limited (T/A MCCARTHY) is a family-owned agricultural machinery dealership. It was founded in 1994 by John McCarthy. Its head office is based in Carrigtwohill, Co. Cork. It is owned equally by Timothy McCarthy and Fidelma McCarthy.

In its financial year to September 2021, the business had turnover of c. €18.2m, an increase of 14.7% year-on-year, which converted into EBITDA c. €0.9m, an increase of 18.6% year-on-year. The increase in EBITDA is almost entirely attributable to the business’ increased sales, which arose solely in Ireland.

The business finished the year with a cash balance of c. €0.2m. Significant post-EBITDA cash movements included a working capital investment of c. €342k and a fixed asset purchase of c. €776k.

The business employed an average of 24 people over the year at an annual cost of c. €921k.

Leinster Reinforcements Ltd supplies reinforced steel and prefabricated reinforced cages. It operates out of its premises in Barrowford Industrial Estate, Athy, Co. Kildare. The company is owned by Frank Brazil, Pat Delaney and Eileen Walsh.

In its financial year to December 2021, the business had turnover of c. €101.1m, an increase of 77.3% year-on-year, which converted into an EBITDA of c. €7.0m, an increase of 77.5% year-on-year. This growth in EBITDA is almost entirely attributable to the rise in revenues, with gross margins remaining flat year-on-year.

The business finished the year with a cash balance of c. €1.0m, a fall of c. €0.8m year-on-year. The business employed an average of 183 people at an annual cost of c. €9.3m.

RECENT FUNDRAISINGS

Who: 3D Issue, a Donegal-based software company that assists marketers to distribute their content online through e-publications such as eBooks and digital brochures.

What: The business has reportedly raised €750,000 in a funding round participated in by Furthr VC and Western Development Commissions.

Why: The funding will be used to increase the workforce by 24 before the end of next year, support the development of new products and expand the business in key markets.

Source: Irish Times

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.


Maireadh Dale

Source:
(Google Images & LinkedIn)


Michael Stirling

Source:
(Google Images & LinkedIn)


Colm Brady

Source:
(Google Images & LinkedIn)

@RenatusCapital Tweets

41.8

The BNP Paribas Real Estate Ireland Construction PMI index for July 2022, a decline of 4.6 from June, representing a sharp decline in construction activity. This has been the sharpest fall since March 2020 and is linked to lower demand and higher costs. @RTEbusiness

3%

The decline in Irish retail spending in July 2022 when compared to June. Clothing purchases (10%), grocery purchases (1%) and overall card spending (1%) were all down during this period. According to @bankofireland

33%

The number of Irish employers that are planning to hire fully remote employees. This corresponds to a survey carried out by the NTA which indicated 77.9% of people have a preference to have some capacity to work from home. @HaysIreland @IrishTimesBiz

10%

The year-on-year increase in the demand for Irish gas as of July 2022. This increased demand was mainly attributable to air travel (95%), leisure/sports arenas (39%), retail (35%) and hotel sectors (20%). According to @GasNetIrl. @IrishTimesBiz

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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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    Adrian Stackpoole, Digital Marketing Associate

    • Adrian joined Renatus in 2018, initially as a Marketing Executive before moving into the role of Digital Marketing Associate. As part of his role, Adrian manages all the digital marketing aspects of Renatus as well as conducting digital research for portfolio companies.
    • Adrian holds with a BBS degree in Marketing and Entrepreneurship from the University of Limerick, as well as a Postgraduate degree from The Digital Marketing Institute.
    • Prior to joining Renatus, Adrian worked in New York with a start-up hospitality group, specalising in marketing and operations.
    TIERNAN O’HAGAN

    Tiernan O’Hagan, Associate

    • Tiernan recently joined Renatus Capital Partners as a Private Equity Associate. As part of his role, he researches and analyses the potential of new investments and acquisitions
    • Tiernan graduated with a B.Sc in business and law from DIT Aungier street & an MSc. in Entrepreneurship from Trinity College Dublin.
    • Previously worked with Capnua Corporate Finance for three months during a summer internship.
    • Tiernan is also in the process of sitting ACCA exams.
    Bronagh Kearns Renatus

    Bronagh Kearns, Associate

      • Bronagh recently joined Renatus as a Private Equity Associate. As part of her role, she will be researching and executing investment opportunities.
      • Bronagh holds a MSc in Quantitative Finance from UCD Michael Smurfit Business School and a BSc in Finance from University College Cork. Currently, Bronagh is in the process of obtaining the ACCA qualification.
      • Prior to joining Renatus, Bronagh worked as an Investment Banking Analyst in Rubicon Capital Advisors where she worked on M&A transactions on the execution side and financial modelling in the infrastructure sector. She also worked as an Investment Associate in River and Mercantile Solutions in London quantitatively screening different investment opportunities across all asset classes.
    Alan Manning Renatus

    Alan Manning, Associate

    • Alan joined Renatus Capital Partners in September 2021 as a Private Equity Associate. As part of his role, Alan researches and analyses potential investments and acquisitions.
    • Alan holds a B.Sc Finance from University College Cork.
    • Previously working in KPMG’s Consulting division, with the Financial Management Consulting team. During his time there he was engaged on a Finance Function Review for a European Travel Technology firm, and a review of the cash management strategy of an Irish Commercial Bank.
    • In the process of sitting ACCA exams.

    Conor Hall, Associate

    • Conor joined Renatus Capital Partners in June 2018 as a Private Equity Associate. As part of his role, Conor researches and analyses potential investments and acquisitions.
    • Conor holds an M.Sc. in Quantitative Finance from UCD Michael Smurfit Graduate Business School and a B.Sc. in Economics & Finance from UCD. He is currently working towards attaining the ACCA and CFA qualifications.
    • Prior to joining Renatus, Conor worked as an Analytics Analyst with Accenture, specialising in predictive modelling for fraud.

    Kyle Barry, Associate

    • Kyle joined Renatus Capital Partners in June 2016 as a Private Equity Associate. As part of Kyle’s role, he researches and analyses the potential of new investments and acquisitions.
    • Since joining, Kyle has worked on numerous transactions, including Simtech and Rennicks, and has worked with Renatus’ investee companies on a number of strategic projects.
    • Kyle holds an MSc. in Quantitative Finance (University College Dublin) and a BA Finance (Maynooth University). Currently, Kyle is in the process of completing the ACCA qualification.
    • Prior to joining Renatus, Kyle spent 15 months in Intel’s Finance department where he worked across the financial reporting, tax and capital financing teams.

    Philip Gardiner, Associate Director

    • Philip is an Associate Director with Renatus Capital Partners, having first joined the firm as its first employee in 2014.
    • Philip has responsibility for screening, assessment and structuring of new acquisitions.
    • He has worked on a number of transactions at Renatus including Boojum Mexican Restaurants and Simtech Aviation. Philip works actively with the boards of Boojum and Simtech Aviation.
    • Prior to joining Renatus, Philip spent four years in AIB’s corporate banking team where he worked on a mix of real estate and cash flow lending deals.
    • Philip is a member of the ACCA and holds an MSc. in Financial Services and a Bachelor in Business Studies, both from the University of Limerick.

    Jane Martin, Marketing and Administration Manager

    • Jane joined Renatus Capital Partners in June 2019 as a Marketing and Administration Manager. As part of Jane’s role, she writes the weekly newsletter, works on the CRM and looks after the admin and ad hoc tasks
    • Prior to joining Renatus, Jane worked as a Senior Account Manager in Mace Promotions where she worked closely with many SMEs as well as large corporations on their marketing projects

    Mark Flood, Director

    • Mark co-founded Renatus with Brendan Traynor in 2014. Prior to establishing Renatus, Mark spent seven years on the senior management team of the Racing Post in various operational and commercial roles. Before founding Renatus, Mark was Managing Director of the Racing Post’s Irish operation.
    • Prior to his career in the Racing Post, Mark was the first employee of FL Partners, an Irish based international private equity firm, where he was actively involved in over €300m worth of transactions.
    • Mark combines his financial, operational and commercial experience to bring value and energy to all partner companies.
    • Mark is a Chartered Accountant and holds a Bachelor of Commerce and Masters in Accounting from NUI Galway.

    Brendan Traynor, Director

    • Brendan is a co-founder of Renatus. Prior to establishing Renatus, he was a Director in BDO Corporate Finance specialising in M&A, MBO’s/MBI’s, debt and private equity fundraising across a diverse range of sectors and clients.
    • His career focus and passion is the Irish SME sector and his deal expertise covers sectors such as retail, manufacturing, FMCG, healthcare, avaiation, media, medical devices, food and agriculture, construction, and hotels and leisure.
    • Brendan is a Chartered Accountant and holds a Bachelor of Commerce from University College Dublin

    Conor Mehigan, Associate Director

    • Conor joined Renatus Capital Partners in 2021 as an Associate Director. Conor has responsibility for screening, assessment and structuring of new investments and acquisitions.
    • Prior to joining Renatus, Conor spent five years in IBI Corporate Finance specialising in M&A, debt and private equity fundraising for private and public companies across a range of sectors. Prior to his career in IBI Corporate Finance, Conor spent four years in Deloitte’s Corporate Finance Division, specialising in Transaction Services
    • Conor is a Chartered Accountant and holds a BSc in Finance from University College Cork

    Greg Dilger, Strategic Advisor

    • Greg Dilger is a former Executive Director of NCB Stockbrokers and Investec Wealth & Investment.
    • He is an investor and advisor to Renatus and brings years of relevant experience to our team.
    • Greg is also currently a Non-Executive Director of Brewin Dolphin Ireland.
    Patrick Dooley Renatus

    Patrick Dooley, Associate Director

    • Patrick joined Renatus in November 2022 as an Associate Director. Patrick has responsibility for screening, assessment and structuring of new investments and acquisitions.
    • Patrick previously held leading positions in Focus Capital Partners, PKF O’​Connor, Leddy & Holmes & EY.
    • Patrick is a charted accountant and holds a Bachelor of Accounting and Finance degree from DCU, along with a Masters degree in Accounting from TUD.

    John Dwyer, Chairman

    • John joined Renatus in 2018 as a Chairman. Prior to Renatus, John spent 30 years at PwC in the UK, 20 years as a Partner, John led the UK and Global Deals business at PwC and was an executive board member of the UK firm.
    • Prior to that, John led the UK and Global Private Equity business at PwC and worked with firms including 3i Group, Apax Partners, CVC Capital Partners and Cinven.
    • John is married to Natasha and they have three children. John works between Dublin and London and his charity work includes chairmanship of Irish Youth Foundation UK.
    • He is an advisor and Board member of Irish digital marketing firm Pigsback and media firm Racing Post.
    • John is a Chartered Accountant and holds a Bachelor of Commerce from UCD.