Renatus Weekly M&A & Company Performance Private Equity Newsletter 24/07/2022

Deal Details: CastleGate Investments has acquired a stake in Gym+Coffee, following a €17m investment.

Gym+Coffee is an Irish athleisure clothing company. It was founded by Niall Horgan, Diarmuid McSweeney and Karl Swaine in 2017. Initially the brand was an online retail store but has since expanded, opening 12 stores across the UK and Ireland. The company does not publish turnover or EBITDA. Earlier investors into Gym+Coffee include Niall Horan, Brian O’Driscoll, and West Ventures. Gym+Coffee has achieved outstanding success in the Irish market since its founding in 2017 and has grown into a household name with eight stores throughout the country.

CastleGate Investments is a private family-owned fund.

Advisers:
Gym+Coffee:
FDD & Founder Support: BKK
Deal Advisory: Houlihan Lokey
Legal: Maples led by Will Darmody

CastleGate Investments:
Deal Advisory: KPMG
Legal: Eversheds Sutherland LLP

Renatus Comment: The business has very much focused on international growth in recent times with great success, having set up four stores in the UK and an e-commerce platform serving Europe, the UK, North America, Australia, and New Zealand as well as pursuing partnerships with various international celebrities and clubs including Joe Wicks and Aston Villa Women’s Football Club.

This is CastleGate’s third sizable transaction in recent months following the purchase of Sherry Fitzgerald and its investment in CWSI. This deal seems more core to the CastleGate team, given its e-commerce achievements, with founder Tommy Kelly having previously founded the billion-euro eShop World.

Source: Irish Independent

Deal Details: Premier Media Broadcasting Limited has been acquired by Viaplay Group in a deal reported to be worth £30m.

Premier Media Broadcasting Limited is a paid television sports channel that holds exclusive live TV rights to various sports leagues. It was founded in 2010, by Michael O’Rourke, joint CEO and partner of Setanta Sports and is headquartered in Dublin. The business had a turnover of €23.0m which converted to an EBITDA of -€2.9m in FY20.

Viaplay Group is a Nordic entertainment provider, streaming live sports, movies, series’, music and original shows. Viaplay Group is headquartered in Stockholm. It was founded in 2018 as a spinoff from MTG and is currently led by CEO Anders Jensen. The company went public in March 2019. In FY21 the company had a turnover of €1.2bn which converted to an EBITDA of €107m. Viaplay will see Premier Sports rebrand and in time include Viaplay’s film and series offering.

Advisers:
Premier Media Sports Broadcasting:
Legal: A&L Goodbody

Viaplay:
Corporate Finance: Inhouse
FDD: EY (Fredrik Steenberg, Maurice Kennedy, Sean O’Brien and Michael Mills)
TDD: EY (Dave Barry and Rachel Harvey)
Legal: Dentons

Renatus Comment: Premier Sports is an extension of the Setanta story having been founded by Mickey O’Rourke.

O’Rourke and his partners in Setanta were probably too early in the UK with their big bet on that market as the price they paid per Premiership game was a fraction of what they now trade for.

Premier Sports, while serving the same inauspicious UK market, competed away from the English Premier League. It has built up a highly attractive offering in recent years, with football rights including La Liga, the Coppa Italia, Scottish Cup and 60 UEFA European Qualifiers and UEFA Nations League Games from 2022. It also holds the rights to Top 14 rugby coverage in the UK. Premier has 220,000 paying subscribers at present.

This exit adds to O’Rourke’s/Setanta’s successful exits of other channels, namely Australian, Irish, Canadian, African and amazingly Setanta Ukraine in January this year (what timing).

Source: Viaplay Group Press Release

Deal Details: Cork based regtech Valid8Me has received a €12.5m capital investment from Grant Thornton.

Valid8Me has developed a SaaS platform that is transforming customer onboarding, making the Know Your Client (“KYC”) processes more user friendly, streamlined and efficient.

Grant Thornton is a professional services firm that provides assurance, tax and advisory services to privately held businesses, public interest entities and public sector entities. Grant Thornton Ireland is led by managing partner, Mick McAteer.

Advisers:
Valid8Me:
Legal: Ronan Daly Jermyn

Grant Thornton:
Legal: A McCann Fitzgerald team led by Aidan Lawlor and Louise Flanagan
Renatus Comment: This investment by Grant Thornton is another example of how Financial Services firms are enhancing  their service offering and customer experience through complementary tech platforms that both simplify the customer experience and save time and money.

The Valid8Me technology reduces KYC onboarding costs by 50% and can reduce the onboarding time by up to 90%. It also reduces risk and exposure for businesses around data privacy.

The Valida8Me technology will fit very well with key service verticals within Grant Thornton Financial Services, Legal, Tax, Wealth Management and Real Estate.

Source: EU-startups.com

Deal Details: Follow Leisure has acquired coffee chain District. Deal consideration has not been disclosed.

Follow Leisure is a multi-venue hospitality operator with a portfolio including Canteen, Output, Morning Martha and the multi-venue restaurant brand Slim’s Healthy Kitchen. The business is headquartered in London. It was founded by Gary McIldowney in 2017 and has expanded across Northern Ireland since. The company does not report turnover or EBITDA.

District is a Belfast-based coffee-shop chain that serves breakfast, lunch and homemade treats. It was set up in 2016 by David Rea and operated by hospitality professional Richard Stitt. It is headquartered in Belfast and currently operates in four locations across the city and employs 30 staff. The company does not report turnover or EBITDA.

Advisers: None mentioned.

Renatus Comment: The acquisition of District sees Follow Leisure expand its portfolio, bringing the total number brands being managed and franchised to 11.The addition of District will see Follow Leisure double its footprint in Northern Ireland. Having weathered the immediate Covid-impact, businesses such as District should begin to benefit from a shift to people returning to the office, which in combination with the delivery offering it has developed, should provide solid value to Follow Leisure’s portfolio.

Source: Belfast Telegraph

Deal Details: Stryve has acquired London-based Atticus in a deal reported to be worth up to €1m.

Stryve, based in Carlow, is a cybersecurity and private cloud company. It has data centres in both Ireland and Poland. The business is led by CEO Andrew Tobin who is also the largest shareholder. It does not report turnover or EBITDA information.

Atticus is a creative design agency specialising in brand, website design, email campaigns, video, print and marketing campaigns. The business is based in London and will rebrand to Stratticus following the acquisition. The business is majority owned by David Roland. It does not report turnover or EBITDA information.

Advisers: None mentioned.

Renatus Comment: This is one of a number of deals linked to the cybersecurity space in recent months. However, the focus of Stryve’s acquisition is on ensuring it can offer a more holistic solution to complement its existing cybersecurity expertise, given Atticus’ focus on website design.

The acquisition of Atticus provides Stryve with immediate access to the UK market and added clients, while furthering the business’ ambition of becoming Europe’s largest private cloud market.

Source: Irish Independent

Permanent TSB’s acquisition of Ulster Bank assets approved by the CPCC

Deal Details: Following a €7.6bn deal last December, the Competition and Consumer Protection Commission (CPCC) has approved the acquisition of Ulster Bank assets including performing non-tracker mortgages, non-performing non-tracker mortgages, the entire micro-SME business direct loan book and its asset finance loan business by Permanent TSB. It also includes 25 of Ulster Bank’s properties.

Source: Irish Independent

Filecloud aims to raise $50m

Deal Details: Filecloud, an enterprise file sharing, sync and backup solution that offers private, public and hybrid content services, is aiming to raise funding.

The business is aiming to raise $40m-$50m in a Series B funding round to help fuel new M&A growth for the business. The business has a number of blue-chip businesses including Disney. It has its European headquarters in Limerick. The business is led by CEO Ray Downes. The business does not report turnover or EBITDA information.

Source: Irish Independent

Headquartered in Duleek, county Meath, Leinster Farm Machines is a supplier of high-quality agricultural machinery, equipment, spare parts, and services. The business was established in 1979.

Leinster Farm Machines reported a turnover of c. €20.8m in FY21 which converted to an EBITDA of c. €2.5m. This represented a c. 40% increase in revenue and an over 80% increase in EBITDA. This margin improvement was driven by administrative expenses remaining relatively flat over the period while turnover increased significantly.

Significant post EBITDA cash movements included a working capital investment of c. €1.0m, dividends paid of over €11.0m, and the sale of assets amounting to c. €2.7m.

The business is majority owned by Philip O’Hara who is the ultimate controlling party. Leinster Farm Machines employed an average of 24 staff throughout FY21 at a cost of c. €1.2m.

E. McIntyre & Sons Limited/ t/a McIntyre’s Tools & Equipment and Frenstar Valves, imports and distributes tools and related equipment, with 3 retail stores. The business is based in Derry and owned by Fergal McIntyre.

In its financial year to October 2021, E. McIntyre & Sons Limited had turnover of c. £17.3m, a c. 24% rise YoY. This converted to an EBITDA of c. £3.6m, a c. 38% rise YoY. This increased EBITDA figure is largely attributable to the business’ increased revenues, with gross margins remaining relatively flat YoY.

The business finished the year with a cash balance of c. £3.0m, a c. 4% rise YoY. Significant cash movements included a tax payment of c. £707k, a loan repayment of c. £420k, and an asset acquisition of c. £295k.

E. McIntyre & Sons Limited employed an average of 76 people over the year at an annual cost of c. £3.1m.