Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
Deal Details: Swiftqueue Technologies Ltd has been acquired by leading healthcare solutions provider Dedalus Group for an undisclosed amount.
Dedalus Group, headquartered in Florence, Italy, is a leading healthcare and diagnostic software provider in Europe. Dedalus, owned by private investment
house Ardian, serves more than 5,000 private and public hospitals across 30 countries.
Dublin-headquartered Swiftqueue, backed by Kernel Capital, is a leading supplier of scheduling solutions for the healthcare sector. Its cloud-based software is extensively deployed throughout the UK, Ireland and Canada, where it has transformed access to care and diagnostic services.
Swfitqueue is Dedalus’ first Irish acquisition and, while the deal consideration was not disclosed, it was reported that Dedalus acquired 100% of Swiftqueue Technologies meaning a full exit for existing shareholders which include founders Brendan Casey and Declan Donohoe.
Financial DD: KPMG Italy
Tax DD: Caitriona McCann in McCann FitzGerald; KPMG and Gatti Pavesi Bianchi Ludovici.
Legal Advice: DWF team led by Corporate Partners Ross Little and Edon Byrnes with support from Sean Forsyth (Corporate), Alison Martin (Senior Associate, Employment) and Niall O’Brien (Associate, Data Protection)
M&A Advice: Sam Nolan, Jan Fitzell and Brian Simpson of Deloitte.
Tax DD: Karen Clarke and David Shanahan of Deloitte
Legals: Andrew McIntyre (Corporate Partner) with support from Ciaran O’Brien (Associate), Darragh Larkin and Declan Lavelle (William Fry Tax Advisors).
ReganWall acted for Kernel Capital on the transaction
Renatus Comment: Over the past few years, Dedalus has pursued an aggressive M&A strategy to become a leader in the healthcare ICT and clinical transformation solutions space. The group has completed a total of nine European acquisitions since 2016, including its latest acquisition of Swiftqueue.
This is a great example of a company that has great technology and was well run whose progress was then fast-tracked last year with a huge need for its services when the COVID pandemic hit.
Source: Dedalus Press Release
Deal Details: Limerick-based waste management and recycling software provider AMCS Group has acquired US-based asset and fleet maintenance software provider Dossier Systems. The deal consideration was not disclosed.
AMCS was founded in 2003 by current CEO, Jimmy Martin, and Austin Ryan. The business is based in Limerick with offices in the USA, Europe, and Australia employing over 700 people. AMCS is a global leader in the supply of integrated software and vehicle technology for the waste, recycling, and material resources industries.
Dossier Systems, led by CEO Jack Boetefuer, was founded in 1979 and is based in Philadelphia, USA. The business specialises in fleet maintenance and management software solutions targeting the surface transportation industry. Dossier’s entire team of c. 50 staff will integrate into the AMCS group along with its portfolio of over 750 customers.
Advisers: None mentioned.
Renatus Comment: AMCS has been on an outstanding growth trajectory over the past few years. In 2018, the business had a portfolio of 1,500 customers and employed a total of 450 people, these figures have grown to over 3,000 and 700 respectively.
While much of this growth has been organic, AMCS’ acquisition strategy has also been a key factor having acquired various related software providers such as Dataset Solutions earlier this year, TRUX Route Management Systems in 2020, and Recy Systems in 2019.
AMCS’ backers, including the Ireland Strategic Investment Fund (ISIF) and Insight Venture Partners, are enabling one of Ireland’s best software success stories to grow and grow whereas in years gone by it may have been the acquiree and not the acquirer.
We were fortunate enough to host Jimmy Martin on the Renatus Podcast where he shared some key lessons from his journey to-date with AMCS. You can listen to the full episode here
Source: Business Wire, LinkedIn
Deal Details: IBI Corporate Finance has acquired a reported 50% stake in M&A advisor Broker Exchange Ireland (BXI).
IBI is one of Ireland’s leading corporate finance advisors. It provides expert, independent advice to public, private and semi-state companies across a variety of complex domestic and international transactions. The firm is led by Tom Godfrey and Ted Webb.
BXI was founded in 2019 and advises on transactions between brokers working in the insurance and wealth management sectors. The company is wholly owned by Seamus Keane, who has a long career in the financial services sector working with companies including Mercer, Bank of Ireland Asset Management, and Irish Life.
Advisers: None mentioned
Renatus Comment: The transaction is the first which IBI has made since it completed its MBO from Bank of Ireland in 2017, and reflects the rapidly rising number of deals in the insurance and wealth management sectors. It sees a major M&A advisor following in a trend seen in the financial services industry in Ireland, with a high level of consolidation taking place in the industry. There are a large number of independent operators dotted around the country so there is likely to be more consolidation in the future.
IBI CEO Tom Godfrey has highlighted the increase in regulatory and compliance costs as a key driver of activity, with smaller owners looking to exit the market and a new generation of Irish players looking to consolidate in order to boost market share and achieve greater economies of scale.
The deal adds to an already busy year for IBI, who have advised Bank of Ireland on its proposed acquisition of Davy Group along with Communicorp’s sale to Germany Bauer Media group.
Source: Irish Times
Deal Details: Limerick-based waste management business BHSL has agreed a deal to acquire Glan Agua, a specialist water treatment firm, for a reported consideration in excess of €10m.
BHSL is an Irish agri-tech company that has developed a unique, patented system (Fluidised Bed Combustion) to convert the untreated poultry manure into energy for heating, cooling and electricity generation to meet the energy needs of the farms.
Glan Agua is an award-winning company that provides project solutions for the water and wastewater industry. Based in both Ireland and the UK, Glen Agua is considered an industry leader in the water and wastewater sector. The company is a subsidiary of the Mota-Engil Group, an MNC which focuses on construction and infrastructure management.
Holmes advised the BHSL Group. The deal was led by George Kennedy, Corporate Partner. Lisa Killeen, Banking and Finance Partner, Molly Burke, Solicitor and Ciara Downes, Trainee Solicitor, both Corporate also worked on the transaction.
Robert Adams and Martin Higgins of Focus Capital Partners acted as corporate finance advisers on the transaction.
Renatus Comment: BHSL chairman Denis Brosnan has highlighted how the acquisition of Glan Agua will support the business’ strategy to expand as an environmental solutions business which focuses on extracting value from waste products and supporting the circular economy. BHSL is no stranger to growth via acquisitions having previously acquired Glanway, a Waterford-based waste processor, in 2018.
Jimmy Martin, CEO of AMCS Group, mentioned in the podcast above that ‘there is no such thing as waste’, highlighting the value that is to be extracted from waste products as part of a circular economy.
Deal Details: Compass Informatics, within the Tracsis Group, has acquired Icon Group for an undisclosed amount.
Icon Group, founded in 1994 and headquartered in Dublin, is an interdisciplinary geoscience company specialising in earth observation (EO), geographical information system (GIS) and spatial data analytics.
Icon Group will be integrated with Compass Informatics to create an Irish-based data analytics centre of excellence specialising in providing location-related technologies and analytics solutions and services to government and commercial organisations.
Tracsis plc, headquartered in Leeds, is a technology company and a leading provider of software and hardware products, data capture and data analytics/GIS services for the rail, traffic data and wider transport industries.
Advisers: Crowe provided M&A advisory services to Compass Informatics
Renatus Comment: Since its IPO in 2007, Tracsis has completed over fifteen acquisitions. It appears to target well-run technology and software businesses with a history of profitability and recurring revenue. It also targets complementary businesses where there are cross-sell/up-sell opportunities.
Icon Group fits the bill, generating revenue of c. £2.8m and profit before tax of £0.8m in FY December 2020. Icon Group was owned by Tom McHugh and Veronica Lawlor prior to the transaction.
Source: Compass Informatics
Deal Details: Simply Blue Group and Shell have agreed a deal that will see Shell acquire a reported 51% stake of Simply Blue’s Western Star floating wind farm project.
The project, planned 35km off the Clare coast, aims to harness the vast floating wind potential in the Atlantic Ocean. The joint venture will seek to co-develop up to 1.35GW in total, which is an equivalent to powering over one million homes.
Shell plc, is an Anglo-Dutch multinational oil and gas company headquartered in The Hague in the Netherlands.
Cork-headquartered Simply Blue is a leading, early stage developer of transformative and sustainable floating wind, wave energy and low-impact aquaculture projects in Ireland, the UK and other jurisdictions globally.
Advisers: Feilim O’Caoimh led the Fieldfisher team involved in the transaction and was assisted by Elaine Traynor, Corporate and Renewables Partner and Jamie Woodcock, Corporate and Renewables Solicitor.
Renatus Comment: This isn’t Shell’s first partnership with Simply Blue. In January this year, Shell acquired a 51% in Simply Blues’ Kinsale venture.
Offshore wind is becoming a more favoured form of renewable energy and is expected to produce between 7% and 11% of the EU’s electricity demand by 2030. Simply Blue Energy is positioning itself as a leader in this space.
Deal Details: Berlin-based micro-mobility operator TIER is to take over the Belfast Bikes scheme from Nextbike. The deal consideration has not been disclosed.
TIER is a shared micro-mobility company that provides e-bikes, e-mopeds, and e-scooters. The business was founded by Lawrence Leuschner, Matthias Laug, and Julian Blessin in Berlin in 2018. Tier currently has operations in 16 countries across Europe and the Middle East.
The Belfast Bikes scheme, established in 2015, has 450 bikes available from 50 stations. The scheme has been operated by Nextbike since it was launched.
Nextbike was founded in 2004 in Leipzig, Germany, and is a leading provider of bike-sharing systems. The business operates in 28 countries, mostly situated throughout Europe with a minor presence in the Middle East, USA, India, New Zealand, and Africa.
Advisers: None mentioned
Renatus Comment: Nextbike has grown to become a European leader in bike-sharing systems mainly through exclusive operator partnerships with cities, which was the case in Belfast.
The integration of Nextbike’s offering into that of TIERs will add a large chunk of these exclusive operator contracts to TIERs bike and e-bike division making TIER one of the largest and most diverse micro-mobility operators worldwide.
Source: TIER Press Release
Deal Details: Flutter Entertainment is to acquire online bingo operator Tombola for a figure in excess of £400m (€478m). The deal is subject to approval in the UK from the Competition and Markets authority.
Flutter Entertainment PLC is a global sports betting, gaming and entertainment provider. Its brand portfolio includes Sky Betting, Paddy Power, PokerStars Betfair and Sportsbet. Led by Peter Jackson, the company had 2020 turnover of €4.4bn and operating income of €257m.
Tombola, an online bingo operator, is based in the UK and had revenue to year-end April 2021 of £164m which converted to an EBITDA of £38.5m. Tombola was founded by Phil Cronin 16 years ago as the first major UK-focused operator to introduce both mandatory staking and deposit limits. Cronin will exit the business after the acquisition.
Advisers: None mentioned.
Renatus Comment: Bingo is widely viewed as the friendly type of gambiling and will play to Flutters’ attempts to be seen as an entertainment provider rather than gambling operators / creator of addiction.
Source: Irish Times
Deal Details: Yew Grove Reit is to be acquired by Canadian property group Slate Office Reit for a reported c. €127.8m.
Yew Grove Reit is a Dublin-listed owner of office and industrial assets outside of Dublin’s city centre. It focuses on office and industrial assets let to state entities, IDA-supported companies and large corporates.
Yew Grove’s reported c. €49.5m of borrowings implies an estimated enterprise value of €177.4m. In FY20, the company had reported turnover of €11.4m, largely from rent, and net assets of €111.6m.
Toronto-listed Slate Office Reit will have income streams post-transaction of 17% from the Republic of Ireland, 18% from the US and 65% from Canadian assets.
Éanna Mellett led the DLA Piper team with Steve Duggan, Matt Cole, John Earle, Blayre McBride (Corporate); Conor Houlihan, Elaine Cummins (Finance); Graham Quinn, Barry Noonan (Real Estate)
Laurence O’Shaughnessy, Tom Godfrey of IBI Corporate Finance provided financial advisory.
Eavan Saunders, Jill Bradley of Dentons acted for IBI on the legals.
Yew Grove Reit:
Goodbody acted as financial advisor
William Fry provided legal support
Renatus Comment: Yew Grove has been a standout performer in the Commercial Property sector throughout the COVID pandemic. Yew’s strategy of focusing on asset’s outside of Dublin City Centre and industrial units, mostly let to State entities, IDA-supported companies and large corporates paid off in 2020.
Its rent collections ranged from 97% – 100% between the second and fourth quarter of 2020, among the highest rates across listed Irish and British property groups. In contrast, retail landlord and co-owner of Dundrum town centre Hammerson collected a reported 16% in the third quarter of 2020.
Source: Irish Times
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
MacCann & Byrne Limited is a family business over a 100 years old, based in Athboy, Co. Meath. They produce and distribute a range of construction products such as timber, sheet material, pine panels, roofing products and decking. It is co-owned by Richard and Ian MacCann.
In the financial year to December 2020, MacCann & Byrne generated turnover of c. €13.8m, an increase of 7.2% YoY, which converted to an EBITDA of c. €0.8m, an increase of 72% YoY. This increase can be partially explained by an increase in gross margins YoY from c. 33% to c. 36%.
The business finished the year with a cash balance of c. €298k, an increase of c. 11% YoY. Some of the most significant uses of cash were the repayment of loans totaling c. €467k and fixed asset purchases of c. €151k.
MacCann & Byrne is owned equally by Richard and Ian MacCann.
Howard Farms Limited is a family-run business that has operated from farmland in Killavullen, Cork for over 200 years. The business began by supplying animal feed to farmers and has expanded its offering to include animal-focused supplementation, seeds, fertilizer, and various agrichemical brands.
To December 2020, Howard Farms reported a turnover of c. €11.1m, which converted to an EBITDA of c. €1.0m. This represents a decrease of c. 10.4% and an increase of c. 17.8% respectively. Gross margin increased from c. 23.3% in FY19 to c. 26.3% in FY20 which enabled EBITDA expansion.
Significant cash movements included the repayment of bank loans of c. €509k and the payment of finance lease obligations of c. €210.4k. The business closed the year with a positive net cash and cash equivalents balance of c. €1.7m, an increase of c. 75k from the previous year.
Howard Farms Limited is owned by Ann, Patrick, Joseph and Denis Howard.
Who: Broadband provider & ESB-Vodafone joint venture Siro has secured debt-investment.
What: The company has secured a €125m debt investment from Macquarie Asset Management.
Why: The funding will be used to help finance the expansion of its fibre-to-the-home (FTTH) network.
Source: Irish Times
Who: Aarons Gym, a Mid-Ulster based gym chain founded by Aaron McGonigle in 2012. The business has two outlets based in Cookstown and Magherafelt.
What: The investment amount was not disclosed however it is reportedly somewhere in the region of six figures from Ulster Bank.
Why: This investment has been put toward buying its Cookstown premises and will provide capital for further expanding the brand and its services to the community.
Source: Belfast Telegraph
Who: Cross Rental Services, a market-leading provider of refrigeration, & catering and climate control rental equipment to blue-chip customers across a range of sectors.
What: The company has secured reinvestment from Lonsdale Capital Partners, following its sale of the business to Elysian Capital. Lonsdale’s investment was made alongside certain co-investors including Nord Holding and Literacy Capital PLC.
Why: The funding is to be used to support the continued expansion of Cross Rental Services.
Source: Private Equity Wire
Who: Imprint, a New York-based branded payments start-up co-founded and led by Irishman Darragh Murphy.
What: The business has raised a $38m series A funding. The funding round was co-led by Kleiner Perkins and Irish financial services and software as a service company, Stripe.
Why: The funding is to go toward continued growth, market expansion, and partnership development.
Source: The Irish Times
Who: Lintil, a proptech start-up launched in 2021, has raised funding.
What: €250,000 has come through Enterprise Ireland’s High Potential Startup (HPSU) programme.
Why: The HPSU is aimed at helping Irish companies scale internationally.
Source: Irish Times
Who: The Irish Strategic Investment Fund (ISIF), Ireland’s sovereign investment fund operating under the NTMA.
What: ISIF is to invest up to €200m into a climate portfolio.
Why: The investment will aim to reduce greenhouse gases and help achieve net-zero carbon emissions by 2050.
Who: West Cork Distillers, a leading producer of craft Irish whiskey and spirits, and the largest wholly Irish-owned distillery in the country
What: The company has raised a suite of bespoke working capital (ABL) and other debt facilities with Bank of Ireland
Advisers: Deloitte Debt & Capital Advisory led by Brian Fennelly, Rebecca Cuffe and Ross O’Donovan advised West Cork Distillers. Cian Fenton in RDJ also advised the company, while Padraic Kinsella of William Fry advised Bank of Ireland
Why: The funds will be used for refinancing existing facilities and to support the continued growth in the business.
Who: Irish-founded water utilities compliance start-up Klir secures investment. Klir was founded by David Lynch and Elaine Kelly in Dublin and is now headquartered in Toronto, Canada.
What: $16m (€14m) Series A round was led by Insight Partners, existing backers Bowery Capital, Spider Capital and SaaS Ventures also participated in the latest round, which was oversubscribed. Klir raised £3.1m in seed round 10 months ago.
Why: The funds will be used for product development and hiring of staff.
Source: Irish Times
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.
This week’s thought is inspired from a graphic included in the weekly email from our good friends in Kestrel Capital. The chart below plots the long-term performance of the S&P 500 and lifts out some of the major negative news headlines along the way (i.e. the “reasons to sell”)
At each point along the way there would have been a strong argument to sell but the market subsequently continued its upward stampede. The below quote from Michael Batnick explains this challenge well:
“The fact that bad news travels ten times faster than good news is what separates investors from market returns. You would think that keeping up with the market is as simple as buying an index fund and leaving it alone. And it is that simple, but it isn’t that easy, because bad news smashes your face against an amplifier, while good news just plays quietly in the background.
Doing nothing should be the default setting for most investors, but as the charts above show, that’s easier said than done.”
The YoY increase in the Irish residential property prices for September 2021. @CSOIreland
The YoY increase in Northern Ireland’s residential property prices, with the average home costing almost £199,000, according to the latest index from Ulster University. @BelTel
The YoY increase in the value of Irish exports for September 2021 amounting to €14,5bn. @CSOIreland
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.
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