Dear Reader,
You are receiving this mail every week as we see you as a key partner and we look forward to continuing to enjoy our journey with you over the decades ahead.
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
Deal Details: Great Point Partners (“GPP”), a Greenwich, Connecticut-based private investment firm focused on the health care industry, announced the growth recapitalization of SteriPack.
SteriPack was founded by Garry Moore in 1994 and is headquartered in Mullingar with facilities in Poland, Malaysia and the United States. It is a leading contract manufacturing and value-added services company serving the medical device and pharmaceutical industries.
Advisers: Conor Barry of XMS Capital Partners was the corporate finance advisor to GPP having advised Bemis Inc on the acquisition of the SteriPack Healthcare Packaging business in 2016. Maples Group led by partners Deirdre McCarthy and Will Darmody provided legal advice to GPP.
Renatus Comment: GPP and SteriPack look set to build on their existing success by acquiring a number of complementary bolt-ons, a path that can lead to exceptional growth. It is a great case study whereby the founder got a lot of chips off the table but stayed on to help the company realise its potential and make even more money in the process.
Deal Details: Cork-based life sciences software company Zenith Technologies is being bought by US firm Cognizant for an undisclosed sum.
The Ringaskiddy-headquartered firm founded by Brendan O’Regan specialises in implementing digital technologies to manage, control and optimise drug and medical device production. They recorded revenue of c. €85.5m and EBITDA of c. €9.9m for FY18.
New owner Cognizant, a multinational headquartered in New Jersey provides a range of IT services, including digital, technology, consulting and operations services. Cognizant recently acquired another Irish Company, Dublin-based financial services software firm Meritsoft. Cognizant had revenue of c. $16.3bn for FY18.
Advisers: M&A sell side assistance was provided by Deloitte’s Financial Advisory team in Munster led by Partner Ronan Murray with additional support from his M&A Partner colleagues Jan Fitzell & Anya Cummins. ReganWall, led on the deal by Adam Griffiths, provided legal advice. Cognizant were advised on legals by Arthur Cox.
Renatus Comment: Ever since Cork became a hub for pharma and related sciences, there has been a stream of successful indigenous companies who have scaled by finding a niche in the value chain or who have ultimately grown to challenge multinationals who took up residence there. As we have mentioned many times here foreign direct investment to Ireland can spawn world class indigenous entrepreneurs and companies in those sectors.
Source: Cognizant Press Release
Deal Details: Softcom has been acquired by US enterprise software giant ADP. No terms for the acquisition have been disclosed.
Softcom provides managed payroll services, human resource management, online payslips and P60 solutions to clients in the Irish and UK markets and previously had partnerships with ADP. At the end of FY17, Sotfcom were not obliged to file P&L statements but from reading the balance sheet, they clearly were making over €1m a year and had accumulated cash of €6.7m at December 2017.
ADP is headquartered in New Jersey, the company’s services include payroll management, HR outsourcing and compliance automation, with clients in 140 countries.
Advisers: None mentioned.
Renatus Comment: It’s unusual to see a share register for a technology company that is 100% owned by the same family. It is a great achievement by Gerry, Patricia and Patrick Reidy who own 100% between them.
Source: ADP Press Release
Deal Details: Slack has gone public on the New York Stock Exchange through a direct listing at $38.50 a share at the beginning of trading. Slack’s post-public valuation lies in the region of $20bn.
US-based Slack is a cloud based set of proprietary team collaboration software tools and online services.
Slack were backed by a16z venture investors as part of its Series B fundraise and by Stripe’s Collison brothers, John and Patrick, when they participated in Slack’s series C in 2014.
Advisers: None mentioned.
Renatus Comment: While it may be unusual too see a fundraise in this section, it is Irishman John O’Farrell’s investment in Slack that caught our eye. His company, a16z led the series B funding round in Slack and he recounts the journey in his blog here: a16z – Slack
Source: Bloomberg, a16z
Deal Details: Artelo BioSciences Inc., a clinical-stage biopharma company, has raised c. $8.0m through a listing of shares on the Nasdaq Capital Market. Artelo has offices in Dublin and San Diego.
Artelo focuses on accelerating the development and commercialisation of a diverse portfolio of novel, endocannabinoid system modulating therapeutics. Their aim is ultimately the delivery of new medicines to help with a wide range of diseases.
Advisers: Maxim Group LLC acted as sole book-running manager for the offering.
Renatus Comment: Artelo was founded by Peter O’Brien and Greg Gorgas just three years ago. This share offering marks another step in the company’s growth journey which looks set to kick on from here.
Source: Global News Wire
Deal Details: Up to 62% of shares in the iconic St. Stephen’s Green shopping centre are reportedly on the market at a guide valuation of €130m for the 62%. The shares in question are held by New York-headquartered Madison International Realty and businessman Pierce Molony, and comprise individual holdings of 35.4 per cent and 27 per cent respectively. It is understood that the remaining shares, reportedly owned by Irish Life, are not for sale.
Source: Irish Times
Deal Details: ESB is engaged in discussions with Coillte regarding the creation of a new joint venture focusing on renewable energy. According to ESB, subject to approval, construction of the projects would commence in the early 2020s.
Source: ESB Press Release
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 details of key recent executive and board level appointments
Deloitte appoints eight new partners in Ireland
Yvonne Byrne, Ciaran McGovern and Ruairí Mitchell have become partners in the Consulting practice; Matthew Dolan and Vincent McCullagh are partners in the tax practice; Brian Fennelly is now a partner in the financial advisory practice; John Kehoe is a partner in audit and assurance and Laura Wadding has become a partner in the risk advisory practice. This announcement follows Harry Goddard’s recent promotion to CEO of Deloitte Ireland at the start of June. Mr Goddard succeeded Brendan Jennings as CEO of Deloitte Ireland earlier this month and was previously head of the consulting practice at Deloitte, he has over 20 years’ experience in the professional services and consulting industries.
Holmes O’Malley Sexton Solicitors appoints six new partners in Dublin and Limerick
Holmes O’Malley Sexton Solicitors has announced the appointment of six new partners in Dublin and Limerick across the firm’s litigation, insurance, commercial property and private client practices. The new partners are Lorraine Power, Pat McInerney, Michael Murphy, Anna Owens, Wayne Finn and Piarais Neary. Following their appointment, the firm now has 14 partners across four offices, having opened a Cork office in 2018 and a London office in 2017. Ms Power and Mr McInerney have both been made partner in the firm’s property, corporate and commercial departments. Ms Power acts for some of Ireland’s leading developers, State and semi-state bodies and investment funds, while Mr McInerney specialises in commercial litigation and dispute resolution, data protection, regulation and defamation. Mr Murphy, Ms Owens, Mr Finn and Mr Neary have all been made partners in the firm’s litigation department.
CC Solicitors appoints Claire Dawson as partner
Specialist employment law practice CC Solicitors has announced the appointment of Claire Dawson as partner in the firm. Ms Dawson is the second partner to join the Dublin-based firm this year, following the promotion of Regan O’Driscoll to partner in February. She returns to Ireland from London, where she has practised for over 17 years
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 businesses EBIT or EBITDA less average Capital Expenditure are often better measures. YoY is an acronym for the year-on-year movement in turnover, EBITDA, etc.
The Irish operations of Boots, the health and beauty retailing giant, has filed accounts for its 2018 financial year. Boots showed resilience against increasing pressure facing high street retailers as it experienced top line growth of 2.0% to bring revenue to c. €386.2m which converted to c. €30.2m EBITDA, up 12.8% from a year previous. Boots has an 87 store estate in Ireland with the average store generating revenue of c. €4.4m. An average of 1,647 people were employed across Ireland by Boots during the year at a cost of c. €65.1m, an average cost per employee of c. €39.5k. There was a cash balance of c. €5.1m at the end of the year while net assets stood at c. €123.7m. Boots Ireland is owned by the Walgreens Boots Alliance Limited.
Cavan-based Wilton Recycling is a comprehensive waste management company which provides services including domestic bin collection, refined recycling services and skip hire to name a few. Wilton Recycling is a family-run business with Rodney Wilton the latest Wilton family member to steward the company. In their most recent financial year, Wilton Recycling experienced strong revenue and EBITDA growth with a 21.0% increase to c. €20.5m and a 12.2% increase to c. €2.6m respectively. Revenue is effectively evenly split between the UK and Ireland, not surprising given the company’s border location. Wilton Recycling recorded a c. €72k net decrease in cash for the year. Cash in the business was put to use as dividends of €1.0m were paid while c. €750k was invested in assets and c. €480k was spent in respect of loans and leases. Wilton Recycling is wholly owned by Rodney Wilton.
Manshire Limited trades as the Maryborough Hotel, a 4-star hotel set in an 18th century building in Douglas, just outside of Cork city. In a positive year for the company, revenue increased by 3.2% to c. €8.8m while EBITDA increased by 16.9% to c. €1.3m. Gross margins increased by one percentage point which, when coupled with steady overhead expenses, allowed the EBITDA expansion. The directors cited increased occupancy levels and demand for conferences and functions are primary contributors to the positive movement in revenue growth. The hotel is a likely beneficiary of the increasing number of domestic trips by Irish residents as well as the continued growth of tourism here. There was a net increase in cash of c. €280k which left an ending balance of c. €356k against a debt free balance sheet. The Maryborough Hotel is wholly owned by Josephine and Daniel O’Sullivan.
Who: Yew Grove REIT, the real estate investor which holds a diversified portfolio of Irish commercial property assets, has raised funding.
What: The company which is listed on both the Dublin and London stock exchanges raised €10m in a share offering. An Investec team led by Tommy Conway were Nomad and ESM adviser to the company and joint broker and bookrunner along with Goodbody on the transaction.
Why: The specific purpose of the funds was not disclosed.
Source: Yew Grove REIT
Who: Uniphar, the diversified healthcare services group, is set to raise funding.
What: Uniphar will reportedly raise funding by listing on the Euronext in Dublin at some point this year. It is understood that the flotation will net Uniphar c. €150m. It is reported that Davy and RBC have been appointed as joint book runners.
Why: The purpose us to fund further acquisitions and growth plans while also reducing debt.
Source: RTE
Who: UK-based transport booking app Trainline has raised funding by way of a public offering. Trainline is led by Irishwoman Clare Gilmartin.
What: Trainline listed on the London Stock Exchange at 350p a share.
Why: The fundraise will be used to raise the company’s profile and expand the business. It also marks a return for KKR who bought the business in 2015 from Exponent Private Equity.
Source: Sunday Independent
Who: Kidlare-based CathX Ocean, which specialises in the underwater imaging and measurement industry, has raised funding. The company was set up in 2009 by Michael Flynn and Adrian Boyle.
What: It is reported that Mel Fitzgerald, former Suretank chairman, has invested €125k while Hugh O’Donnell has also invested €125k.
Why: The specific reason or purpose for the fundraise was not made public.
Source: The Sunday Times
Who: Swoop, an Irish fintech start-up founded by Andrea Reynolds is a platform which helps businesses get access to loans quickly, has raised funding.
What: Swoop has been awarded a grant of c. €5.6m from a fund that was established by RBS as a condition of its bailout to promote the UK’s small business banking sector.
Why: The funds will reportedly be used to help Swoop expand its presence in Ireland and the UK.
Source: The Irish Times
I attended a very interesting breakfast seminar on branding hosted by The Pudding and Brand Finance
The Pudding are brand builders and Brand Finance help value brands.
Brand Finance have a Global Intangible Finance Tracker (GIFT™) which tracks public listed stocks Enterprise Value compared to tangible net asset value. They showed that 52% of the total value was intangible and a company’s brand would be a big part of that intangible value. It served to remind us that executed well, money spent on brand can be a game changing investment.
6.3%
The year-on-year decrease in manufacturing costs in May 2019. @CSOIreland
3.5%
The year-on-year decrease in granted planning permission for houses and apartments for Q1 2019, amounting to 7,493 total units.@CSOIreland
13.4%
The year-on year increase of domestic trips taken by Irish residents in 2018, meanwhile the outbound trips increased by 5.8%.@CSOIreland
3.03%
The average mortgage interest rate in Ireland in April 2019, the second highest in the euro zone, compared to the EU average of 1.7% according to the @centralbank_ie. @examinerbiz
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