Renatus’ Weekly M&A Newsletter – 15/05/2022
May 15, 2022Renatus’ Weekly M&A Newsletter – 29/05/2022
May 29, 2022
Renatus Weekly M&A & Company Performance Private Equity Newsletter 22/05/2022
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
THOUGHT OF THE WEEK
It clearly has been a turbulent few weeks in markets, with many comparisons to previous crashes based on stock selloffs. It is hard not to get worried when one sees the concurrent drop in bonds, geopolitical turmoil, incessant inflation, etc. However, it should all be put into context, the S&P 500 is still almost 20% higher than pre-Covid and the fall may speak to corrections to recent irrational exuberance in stock buyers rather than any looming depression.
M&A ACTIVITY
SMBC acquries Goshawk
Deal Details: SMBC Aviation Capital is to acquire Goshawk Aviation in a deal that values Goshawk at an enterprise value of $6.7bn.
SMBC Aviation is one of the world’s largest aircraft leasing companies. The business is based in the IFSC in Dublin. It was founded in 2001 by a Japanese consortium. The business is led by CEO, Peter Barrett. It recorded revenues of €982m in FY21.
Goshawk Aviation is a global aircraft lessor. The business was formed in 2013 and is owned by two Hong-Kong based enterprises. It is headquartered in Dublin and led by CEO, Ruth Kelly. The business had FY20 turnover of €152m.
Advisers:
SMBC:
Deal Advisory: Goldman Sachs
FDD: A PwC team of John Casey and David Connolly.
Legal: Cravath, Swaine & Moore LLP and Milbank.
Tax: A PwC team of Joe Conboy and Ronald Doyle.
Goshawk:
None mentioned.
Renatus Comment: This deal is a hugely significant transaction in the aircraft leasing space, following a flurry of M&A activity in 2021. AerCap acquired GECAS from General Electric for $30bn, while Carlyle Aviation acquired FLY Leasing and AMCK Aviation.
Scale has been highlighted as a hugely important factor in the aircraft leasing sector, with these larger lessors availing of greater insight into the market and dealing with OEMs rather than playing in the lower quality sale-leaseback market. Lessors accounted for 60% of all Boeing and Airbus orders in 2021, making it a highly lucrative space. This deal will provide SMBC with a greater platform to compete with these larger players in the market moving forward.
Source: SMBC Aviation Capital Press Release
Leo Lynch sells majority stake to Cathexis
Deal Details: Dublin-headquartered Leo Lynch has sold a majority stake in the business to US firm, Cathexis Holdings. Deal details were not disclosed and the deal is subject to approval by the competition authorities.
Leo Lynch is a specialist technical, mechanical, and electrical engineering contractor, based in Dublin, with sites in Kilkenny and Kildare. The business is majority-owned by Conor Lynch. The business had FY20 turnover of €44m, which converted to an EBITDA of c. €2m.
Cathexis Holdings LP is a private equity and venture capital firm, based in Texas in the United States. The business is the family office of the firm’s CEO, William Harrison.
Advisers:
Leo Lynch:
Corporate Finance: Anglesea Corporate Finance, led by Nicholas O’Gorman.
Legal: A Wallace Corporate Counsel team of Sean Wallace, Patrick O’Shea, and Sean Hiney.
Cathexis:
Corporate Finance: EY London.
Legal: A Pinsent Masons team of Neil Keenan, Gavin Hickey, and Gerry Beausang.
Renatus Comment: This acquisition speaks to the strength and recovery of the Irish construction industry, Leo Lynch’s main target market. After the delays and restrictions imposed by COVID and with certain sectors of the construction industry still struggling with hangovers from these restrictions, this acquisition speaks to the confidence that investors have in a full recovery in the near future.
Leo Lynch plans to use the funding to accelerate the scaling of the business, both through the addition of new services and a greater ability to tender for large-scale, complex projects along the business’ existing service lines. Cathexis has previous experience in the space, with the company also holding a stake in ISG Ltd, a UK engineering and construction services company, which generates c. £2bn in revenues.
Source: Leo Lynch Press Release
Bushmills Inn acquired by Wirefox
Deal Details: Belfast-based Wirefox has acquired Antrim-based hotel and restaurant, The Bushmills Inn. The deal consideration was not disclosed.
Located near attractions such as Royal Portrush Golf Club, The Giant’s Causeway, and Dunluce Castle, Bushmills Inn consists of 41 bedrooms, a restaurant, bar, private cinema, and conference facilities. The business is owned entirely by Zoe and Alan Dunlop and employs c. 70 staff. Based in Holywood,
Wirefox is a real estate investment and development company. The business was founded in 2014 and is led by BJ Eastwood, the grandson of well-known businessman and former boxing promoter Barney Eastwood.
Advisers: None mentioned
Renatus Comment: Wirefox was an extremely active acquirer of real estate assets throughout the UK and Ireland around 2016/2017, acquiring the likes of Castle Court Shopping centre for c. £125m, nine office blocks in Scotland for c. £35m, the Capella building in Glasgow for c. £43.5m, Southergate Centre in Meath, Longbridge House in Belfast and a 70,000 square foot location on Oxford Street, Belfast for undisclosed sums.
Source: Belfast Telegraph
Accuscience acquired by Diploma
Deal Details: Accuscience Ireland Limited and Medilink Services (NI) Limited (“Accuscience”) has been acquired by Diploma PLC in a deal worth €61m.
Diploma PLC is an international group supplying specialised technical products and services to a wide range of end segments across the Life Sciences, Seals and Controls sectors. The business is headquartered in London and is a member of the FTSE 250. The business had FY21 revenue of c. €902m, which converted to an EBITDA of c. €160m.
Accuscience provides complete solutions to a broad customer base of medical, surgical, life science, laboratory and pharmaceutical companies. The business is led by Managing Director, James McCann and is based in Kildare. The business does not report turnover or EBITDA information. It is owned by Pharmed Holdings, which lists Declan Devine as its largest shareholder.
Advisers:
Diploma PLC:
Legal: A Simmons & Simmons team led by David Brangam.
Deal Advisory: Eight Advisory.
Accuscience:
Corporate Finance: Capnua Corporate Finance.
Legal: Flynn O’Driscoll, led by David Ryan.
Renatus Comment: Accuscience aims to make lab automation readily available to labs of all sizes, with the business currently listing over 100 suppliers, whilst also providing a range of services to customers across the HSE in Ireland and the NHS in Northern Ireland. The deal is expected to add c. £35m per year to Diploma’s existing revenues, with Accuscience having also announced a distribution partnership with Flow Robotics in the past few days.
Source: Diploma PLC Press Release
Nurse acquires Balmoral Healthcare
Deal Details: Kieran McCormick, has bought Balmoral Healthcare. Deal details were not disclosed.
Balmoral Healthcare is a Northern Irish healthcare agency. The business was founded by Amanda McCully in 2000. The business does not publish turnover or EBITDA information.
Kieran McCormick is a registered nurse, working in the sector for over 14 years. He originally joined Balmoral Healthcare as operations director in 2019.
Advisers:
Balmoral Healthcare
Legal: A Tughans team of John McGuckian and Brendan Donnelly.
Renatus Comment: In this MBO, Kieran McGuckian is acquiring a business very much on the rise. The business has seen a 30% increase in turnover over the last 12 months and is due to open a second branch in the northwest of the country. As part of this expansion plan, the business is aiming to broaden its current offering of registered nurses, paramedics, and senior care assistants to include doctors and clerical staff.
Source: Irish News
DEAL UPDATES & OTHER NEWS
Euro Auctions acquisition terminated
Deal Details: The deal for Tyrone-based Euro Auctions to be acquired by Ritchie Bros has been terminated, due to an investigation by the UK’s Competition and Markets Authority. The deal, which was to be worth €900m, was flagged by the CMA due to the high market share of the two companies.
Euro Auctions was founded in Dromore, Co Tyrone, in 1998 by Derek Keys and other members of the Dromore family. The company, with more than 200 staff across 14 countries, buys and sells industrial plant, construction equipment and agricultural machinery all over the world. The business’ holding company, Gardum Holdings Limited, had FY20 turnover of c. £146n, which converted to an EBITDA of £30m.
Canada-based Ritchie Bros is a global asset management, disposition, and services company that, similar to Euro Auctions, sells items through a timed auction format.
Source: Euro Auctions Press Release
COMPANY PERFORMANCE
Brian Geary Car Sales Ltd is a Toyota car dealership based in Limerick. The business is owned by Brian Geary.
The business reported turnover in FY21 of c. €26.9m, an increase of 24.5% year-on-year. This converted to an EBITDA of c. €1.2m, an increase of 61.9%. The increase in EBITDA was primarily driven by the business’ increased revenue figure, with gross margins and overheads remaining effectively flat compared to the previous year.
The business finished the year with a cash balance of c. €2.2m, a decrease of c. €0.5m over the year. The business employed an average of 54 people at an annual cost of €1.8m.
Horgans Delicatessen Supplies Limited (T/A Horgans) specialises in the procurement and supply of a range of food products including meats, cheeses, and pates. The business is based in Knocknamuck, Co. Cork.
Horgans reported a turnover of c. €35.3m in FY22 which converted to an EBITDA of c. €2.1m, representing an increase of 27.9% and 71.9%, respectively. Significant post EBITDA cash movements included a working capital investment of c. €644k and payments to acquire tangible assets amounting to c. €805k. The business ended FY22 with a negative cash balance of c. €1.5m, an increase of c. €100k over the year.
The business employed an average of 57 staff throughout FY22 at a cost of c. €2.5m. The business is majority-owned by the founders Michael and Maura Horgan alongside other members of the Horgan family.
RECENT FUNDRAISINGS
Who: Keelvar, the Cork-based procurement technology firm, has raised funding.
What: The business has raised $24m (€23m) in a Series B funding round, led by UK VC firm, 83 North.
Advisors:
Legal: A Regan Wall team led by Adrian Wall, supported by Neil Nolan.
Why: The business plans to use the funding to scale up its offering in the United States.
Source: Business Post
Who: UrbanVolt, a global provider of light as a service, and solar as a service focused on improving energy efficiency and reducing energy costs. The business was founded in 2015 by Kevin Maughen, Graham Deane and Declan Barrett as a provider of energy-saving light equipment but pivoted to solar energy last year.
What: The business has secured €36m of debt from lenders such as Swedish-based PCP, Irish-based BVP, an Irish impact investment fund, and US-based Beach Point Capital.
Advisors:
Deal Advisory: Rebecca Cuffe and Brian Fennelly of Deloitte acted as debt advisors.
Why: The money will go toward installing solar panels throughout Ireland and the UK.
Source: Independent
Who: Vivasure Medical, a Galway-based MedTech company, has raised funding.
What: The business has raised €22m, as part of a planned €52m fundraise.
Why: The funding will be used to support the company’s push for regulatory approval of its portfolio of absorbable, patch-based devices for procedures.
Source: Business Post
Who: Ubotica Technologies, a developer of Artificial Intelligence for satellites. The business was founded in 2017 by Fintan Buckley, John Bourke, and Aubrey Dunne, and is chaired by Movidius co-founder Sean Mitchell.
What: The business has raised a seed funding round of c. €4m. The investment round was led by Atlantic Bridge Venture Capital with other participants including Dolby Family Ventures and Serpahim Space Investment Trust.
Why: The funding will go toward further developing the business’ technology and hiring additional staff.
Source: Ubotica Press Release
Who: Deciphex, an Irish digital pathology company, has raised funding.
What: The business raised $11.5m (€10.9m) in a Series B funding round, led by ACT Venture Capital.
Why: The funding will be used to drive the business’ global growth and to build out its network of pathologists.
Source: Irish Times
Who: Circit, an audit confirmations and Open Banking platform based in Ireland, has raised funding.
What: The business has raised €6.5m in a Series A funding round, co-led by Aquiline Technology Growth and Middle Game Ventures.
Advisors:
Legal: A Wallace Corporate Counsel team of Alan Ryan, Graham Coyne and Michael Bambrick.
Why: The business plans to use the funding to expand its offering to users on all sides of the platform and to invest in accelerating the network effects that have been created by global organisations joining as customers.
Source: Circit Press Release
Who: MyComplianceOffice, an Irish regtech company, has raised funding.
What: The business has raised $50m (€48.2m) in debt financing from a Silicon Valley investment firm.
Why: The funding will be used to part-fund the business’ acquisition of Schwab Compliance Technologies.
Source: Sunday Business Post
Who: TransferMate Global Payments, the Kilkenny-based global provider of business-to-business payments infrastructure, has raised funding.
What: The business has raised $70m in funding, bringing it total value to $1bn, becoming Ireland’s latest tech unicorn.
Why: The funding will be used to further accelerate the business’ growth plans.
Source: Sunday Independent
Who: sees.ai, a remote drone piloting software, co-founded by Declan McKenna, his wife, and former members of Apple and the McLaren F1 team.
What: The business has secured investment of €117k from Boeing, as part of Boeing’s UK start-up accelerator, Aerospace Xelerated.
Why: The funding will be used to help the business achieve the programme’s aim of using artificial intelligence (AI) and autonomous technology to solve key challenges across aerospace and defence.
Source: Sunday Independent
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.
@RenatusCapital Tweets
15.2%
The rise in property prices in Ireland in the year to March. This represents a seven-year high in annual price growth. According to @CSOIreland
5.4%
The expected growth rate in Ireland’s GDP in 2022, as outlined by the European Commission. According to @rtenews
9%
The annual rate of consumer price inflation in the UK in April, the highest annual rate since 1982. According to @ONS
52%
The proportion of Ireland’s electricity generated by gas in April, up from 27% in March as the supply of wind power declined. At times, gas powered up to 89% of the country’s electricity. According to @rtenews.
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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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