Renatus Weekly M&A & Company Performance Private Equity Newsletter 23/01/2022

Deal Details: Setanta Sports Ukraine, which was launched by Dwyer McCaughley and Michael O’Rourke, a subsidiary of Setanta Sports, is to be acquired by Georgian-based Adjara Media Group.  Deal details have not been disclosed.

Setanta Sports operates two linear TV channels and an OTT service in Ukraine. It was launched in 2019 by long-time Setanta Executive, Dwyer McCaughley and original Setanta founder Michael O’Rourke.  The channels are three years in operation and carry a stellar rights portfolio including the English Premier League, Bundesliga, F1, NBA, NHL, WTA, and UFC.  Both McCaughley and O’Rourke will remain on the Adjara board and continue to work with the CEO Giorgi Pruidze and the wider Adjara team.

Adjara Group, based in Georgia, already has a significant TV presence in Eurasia, in countries such as Armenia, Belarus, Estonia, Georgia, Kazahkstan and Lithuania. These operations are under the Adjara Sport and Setanta Eurasia brands. The Ukrainian channels will continue to be branded as Setanta Sports. Adjara Group is led by CEO Giorgi Pruidze.

Advisers:None mentioned.

Renatus Comment: While there have been different permutations of partners in various Setanta ventures over the years, Mickey O’Rourke has been the constant, and the list of Setanta exits includes this Ukraine business, a recent exit of a collection of Eurasian countries to the same buyer, Australian, Irish, Canadian and African. O’Rourke and his partners were right too early in the UK as they paid a fraction per game for the Premier League rights compared to what is being paid now. It is an amazing international success story for an Irish-based business and O’Rourke still holds the majority of the major sports channel, Premier Sports, in the UK.

Source: Setanta Sports Press Release

Deal Details: Torquay Capital, set up by Paul Meagher and Conor Duggan in 2021, has acquired Alexandra Dental, a group of dental clinics in Limerick, Shannon, Claremorris, and Roscommon. The buyout vehicle has raised debt and equity of over €5m to acquire the business and roll out the brand nationwide.

Alexandra Dental was originally founded by Dr. Annette O’Donovan in 2006 who grew the busines steadily over the years in Limerick city. Annette saw the consolidation opportunity in the market herself and subsequently added three additional clinics in the West of Ireland in the last few years.

Alexandra has a reputation for providing high quality dentistry and has been endorsed by some well-known personalities over the years which has helped grow its brand and social media following to one of the largest of any dental group in Ireland and the UK.

Advisers: Paul and Conor were advised by Bernard McEvoy (Legal), Anna Hickey (Legal) and Kate McNamara (Property) at Philip Lee. Marie Bradley, Bradley Tax Consulting, provided tax advice.

AIB South West, led by Diarmuid Leen, provided a debt facility to the acquisition vehicle which will be used to assist the future roll-out of the group.

The Seller was advised by Gearoid McGann, Sweeney McGann (Legal) and Brian Lonergan and Kevin Meade, Liston Lonergan Associates (Financial).

Renatus Comment: Dental consolidation is still in its infancy in Ireland compared to the UK and most European countries. With a fragmented market, the increasing awareness of oral health and the rise of cosmetic dentistry, this appears to be a great starting point for Paul and Conor to expand out a scalable platform with a well-known brand across the country. This is a great SME success story in the West of Ireland and Dr. Annette O’Donovan must take huge credit for building such an impressive business in an industry that has been slow to change.

Source: The Times

Deal Details: AMCS has acquired Utilibill, a leading Australian-based cloud billing platform, for an undisclosed amount.

Limerick-headquartered AMCS is a global leader of integrated software and vehicle technology for the environmental, recycling, and resource industries and offers optimization solutions to the broader transport and logistics market.
Its enterprise software and SaaS solutions deliver digital innovation to the emerging circular economy around the world.

AMCS, led by CEO Jimmy Martin, has offices in North America, Europe and Australia employing 800 people across 12 countries.

Utilibill is an Australian software company, based in Melbourne, providing a leading-edge, cloud-based utility billing platform.

The company was founded by Igor Green and Morgan Duncan. The company employs 100 people, with offices in the US and Philippines as well as Australia.

Unispace, based in Sydney, Australia, operates in 26 countries and employs over 600 people. It is a global leader in business interior space design and commercial interior design.

The business was founded in 2010 by Gareth Hales. It is now led by CEO, Steve Quick. The company is owned by PAG Asia Capital, having been purchased in 2020 for AUD300m.

Advisers: None mentioned

Renatus Comment: Acquisitions by AMCS have been a recurring theme in our M&A activity section in recent years, proving a key aspect of the company’s growth story. The ISIF-backed company has doubled its portfolio of customers since 2018, standing at 3,000 today. The deal follows on from AMCS’ acquisitions of Dossier Systems and Dataset Solutions in 2021, who provide fleet management and vehicle routing solutions respectively. Having acquired US-rival Trux Route Management Systems in 2020, AMCS’ recent acquisitions have shifted the focus to software providers which can enhance the company’s existing operations.
AMCS founder, Jimmy Martin, has also previously appeared on The Renatus Podcast.

Source: AMCS Press Release

Deal Details: Wicklow-based lighting and generator business Zilligant Limited, trading as Teach Solais has been acquired by MBS Equipment Europe, a subsidiary of movie/television studio management business MBS group. Deal consideration was not disclosed.

Teach Solais provides lighting and generator rental services to the Irish film and TV industry. The business has provided its services to many of Ireland’s biggest productions including Love/Hate, The Guard, Game of Thrones, and Star Wars.

MBS Equipment Europe is the lighting equipment, service, and support arm of MBS Group.

MBS Group, headquartered in the US, is a full studio management business with over 65 locations throughout four countries. MBS works with customers such as Marvel, Netflix, Disney, Amazon, and many more.

Advisers: Conor Mullaney (Managing Partner) and Elaine Keane (Solicitor) of Mullany Walsh Maxwells acted as legal advisers to the shareholders of Zilligant Limited.

Renatus Comment: MBS has been active in the Irish market over the past few months, with this latest acquisition of Teach Solais following the acquisitions of Ardmore Studios in Wicklow and Troy Studios in Limerick, both in 2021. They clearly want more control of their supply chain by acquiring this supplier to their other business.

 Source: MWMLegal.ie

Deal Details: Elgin Energy, an Irish renewable energy company, has sold a portion of its solar power assets to Scottish Power Renewables.
The portfolio sale marks the UK’s largest solar PV transaction to date, consisting of 12 projects across England, Wales and Scotland, with a combined capacity of 519MW.
The deal value has not been disclosed.

Elgin Energy is a full service, utility scale solar development platform. It has a portfolio of projects totalling over 5GW across three key markets of UK, Australia and Ireland.

The company was founded in 2009 and has been developing in Ireland since 2015. Led by Managing Director Ronan Kilduff, Elgin had net assets at December 2021 of £14.5m.

Scottish Power Renewables is a subsidiary of Iberdrola, one of the world’s largest energy companies and the leading wind energy producer.

The company’s growth plans include the expansion of its onshore wind portfolio, investment in new, large scale solar deployment and innovative grid systems. The company is led by CEO, Keith Anderson, and generated turnover and EBITDA in FY20 of £490m and £415m respectively.

Advisers: None mentioned

Renatus Comment: There has been a flurry of deal activity in the solar energy space in recent times, such as Pinergy’s acquisition of Solar Electric in July 2021, and EDF’s acquisition of Wexford Solar. Elgin Energy itself has raised significant funding in recent months, receiving €36m from Berenberg Bank and a €29.6m convertible loan note, in a fundraise led by Focus Capital. These fundraises have been used to help finance the company’s development of solar power projects in the UK and Ireland. The sale of some solar assets will allow Elgin to enhance its financial strength even further to complete its remaining developments in Ireland and Britain.

Source: Elgin Energy Press Release

Deal Details: Eames Solictors, the Dublin-based litigation specialists, has merged with US-based international law firm, Clark Hill. Deal details have not been disclosed.

Eames Solicitors provides legal services to both corporate and private clients. In particular, it caters to the diverse needs of technology, energy and innovative start-up organisations. Eames is led by Managing Partner, Aidan Eames.

Clark Hill is an international law firm, with a presence across the United States, Ireland and Mexico. Clark Hill employs a total of 650 lawyers in the U.S., Mexico and Dublin, where it first opened its office in 2018. The business is led by CEO John Hensien, with Kirby Tarrant leading the firm’s Dublin office.

Advisers: Eames was advised by a team led by Paul Wyse, along with Marc Lowry and Con Casey, of Smith & Williamson.

Renatus Comment: The deal will see Clark Hill expand its presence in Dublin, with the deal allowing Eames to broaden its service offering here in Ireland. The consolidation play is part of a strategy outlined by Clark Hill to expand its capabilities here in Ireland, with CEO John Hensien highlighting increased investment by multinational companies in Ireland as a result of Brexit as a key factor in the play. Clark Hill has also previously merged with an Irish-based firm, O’Grady’s solicitors, in 2019.

Source: Smith & Williamson Press Release

Deal Details: Dublin-headquartered notebook publisher Paperblanks has been acquired by Hachette UK. The deal consideration was not disclosed.

Paperblanks was founded by Vic Marks and Supriti Bharma in 1992 and was originally headquartered in Vancouver, Canada. The business moved its headquarters to Dublin in 2004, where it has been based since.

Paperblanks produces journals, notebooks, planners, stationery, and other related accessories. The business recorded a turnover of over €16m in 2020 and employed c.28 people.

Hachette UK, a subsidiary of French publishing giant Hachette, is Britain’s second-largest publishing group with 10 autonomous publishing divisions and also operates in the e-book and audiobook space.

Hachette UK has offices in the UK, Australia, India, Ireland, Hong Kong, Singapore, Jamaica, and New Zealand. Hachette UK recorded c. £275m of net assets in 2020 and employed c. 300 people.

Following the acquisition, Paperblanks will become a standalone business as part of Hachette UK and will be divided into two corporate entities: Paperblanks Journals Limited, based in Canada and Paperblanks Limited, an Irish company that will become the global headquarters for the organisation.

Advisers: None mentioned

Renatus Comment: The Association of American Publishers recently released their report on the literary publishing industry for 2020 and have shown yet another flat or slightly declining year for industry sales (down 0.2% compared to 2019).

With book publishing, the previous cash cow for businesses like Hachette UK and their owner Hachette no longer growing, they must look to other areas for growth. This has led to a highly active M&A market for adjacent businesses to the traditional publishing industry which includes areas such as e-books, audiobooks, stationery, gifts, and other digital assets.

This strategy has been followed by Hachette UK and the wider Hachette group with recent Hachette UK acquisitions including Laurence King Publishing in 2020, a children’s publishing house with an extensive children’s gifts and toys offering, Bookouture in 2017, a digital publishing company specialising in e-books and Neon Play in 2016, a mobile application development business. This latest acquisition of Paperblanks also follows this trend and gives Hachette UK a stronger position in the stationary market.

Source: Lagardere Press Release

Deal Details: British-based All3Media has acquired a minority stake in 3 Rock, the Irish production company. Deal details have not been disclosed.

3 Rock produces live broadcasts, documentaries, podcasts, branded content, and format development. The company was founded by Craig Doyle in 2018, and also listed Brian O’Driscoll as an investor, who is selling his minority stake as part of the transaction.

All3Media produces TV, film, and digital content, with its portfolio of companies based across the UK, USA, the Netherlands, Germany, and New Zealand. Its productions include Skins, Shameless, and Midsomer Murders. The company had FY20 turnover of £96m, which converted to an EBITDA of £6.6m. The company is part-owned by Discovery Inc., the mass media company.

Advisers: None mentioned.

Renatus Comment: The consolidation play is part of a wider growth by M&A strategy by All3Media, which has made multiple acquisitions in recent years, such as the acquisitions of NENT Studios and Studio Lambert in 2021. The expertise of 3 Rock in sports broadcasting will be hugely beneficial to All3Media. The deal will also help 3 Rock to expand its growth in live sport and documentaries.

Source: Sunday Business Post

Deal Details: Oroson, founded in Northern Ireland, has been acquired by US-based Ceros. Deal details have not been disclosed.

Oroson is a visual collaboration hub, describing itself as the go-to tool for client-facing people working in marketing, branding, or creative agencies to impress their clients and get feedback fast. The company was founded in Northern Ireland eight years ago by CEO Daniel McGlade and CTO Richard Davidson.

New York-based Ceros is a cloud-based experiential content creation platform. The platform is used to create and manage engaging marketing communications. The company was founded in 2007 by Simon Berg. To date, it has raised €118m in funding.

Advisers: None mentioned.

Renatus Comment: Having raised €86m in funding in July 2020 from Sumeru Equity Partners, Ceros has sought to accelerate its growth, with acquisitions forming a key part of this push. The deal to acquire Oroson is Ceros’ second since this funding round, having previously acquired Abdoc Technology in October 2021.

Source: Sunday Business Post

Hugh Boggan Motors Limited is a Toyota car dealership in Wexford. The company is owned by Mark, Hugh and Matthew Boggan.

In its financial year to April 2021, the business had turnover of c. €25.0m, an increase of 6.6% YoY, which converted to an EBITDA of €1.0m, an increase of 112.7% YoY. The rise in EBITDA was enabled by a combination of increased revenue, gross margin increasing slightly and administrative expenses decreasing by c. €260k. Most of the profit generated by Boggans was consumed in increased working capital investment.

The business finished the year with a cash balance of c. €1.4m, a c. €76k decrease YoY. The business employed an average of 51 people at an annual cost of €1.8m.

Kildare-based home heating oil provider, Naas Oil Company Limited, trading as Naas Oil, was founded in 1994. The business provides a range of oil-related products and services which include the delivery of heating oil for homes and SME’s, fuel cards, oil storage tanks, and oil-related products. ​​​​​

Naas Oil reported a turnover of c. €59.4m in 2020, a 3.2% decrease compared to the previous year. Despite a slight reduction in turnover, this converted to an EBITDA of c. €2.6m, which amounted to a 71.0% YoY. Significant post EBITDA cash flow movements include the purchase of tangible fixed assets for c. €2.2m, and a loan inflow of c. €1.0m. Naas Oil experienced a positive cash flow movement of c. €775k during 2020 and closed the year with a closing net cash and cash equivalents balance of c. €3.4m.

The business employed an average of 155 people in 2020 at a cost of c. €4m. Company directors, Brian and Sarah King are sole owners of the business with 50% ownership each.