Renatus Weekly M&A & Company Performance Private Equity Newsletter 24/09/2023

Deal Details: The Irish and UK arms of Global Infrastructure Group have been acquired by RSK Group. Deal consideration was not disclosed.

Global Infrastructure Group is a global specialist in organisation, construction and build solutions within a number of industries. The Group was established in 2001 by Marco Lombardelli and Ivan Holloway and operates across Ireland, the UK and Australia, with the Irish and UK elements being acquired by RSK..

RSK was founded in 1989 and has grown to more than 12,000 employees. It provides sustainable energy solutions in the energy, transport, property, government, manufacturing, healthcare, professional services, food and drink, waste, water and mining sectors. RSK is employee-owned. RSK reported turnover of £796.0m which converted to an EBITDA of £51.9m in FY Apr’22.

Advisers:
Global Infrastructure Group:
Corporate Finance: Montanum Advisory led by Jim Mulqueen and Fiona McGuire.
Tax: Grant Thornton led by Bernard Doherty, Una Ryan and Mark Bradley.
Legal: Mason Hayes Curran led by David O’Donnell, Anne Harkin, Dean Molyneaux and Andrew Tinker.

RSK Environment Limited:
Deal Advisory: Cortus Deal Advisory and UHY Hacker Young.

Renatus Comment: RSK continues to be highly acquisitive having purchased Sligo-based Jennings O’Donovan earlier this month. This deal will greatly expand the group’s capabilities in the rail industry with Global Infrastructure naming the likes of Network Rail, West Midlands Trains and Iarnród Éireann among its existing clients. The UK rail industry stands to receive significant investment in the coming years with Network Rail having published a £44bn spending plan earlier this year, for the period 2024-2029. Global Infrastructure’s core competencies should be well suited to help address the plan’s focus on upgrading the ‘operations, maintenance and renewal of England and Wales’ railway’.

Source: RSK Press Release & CCPC

Deal Details: Quintas has been acquired by Xeinadin Group for an undisclosed amount.

Quintas, a Cork based accountancy and wealth management firm, was formed in 2005. The company has a team of more than 70 employees and specialises in corporate finance, banking, debt resolution and M&A for SME’s. It is owned by Tim McCarthy, Fachtna O’Mahony and William Hogan.

Xeinadin, formed in 2019, operates across the UK and Ireland from over 130 offices with 1,800 employees across the Group. It is a business advisory and accountancy group working with business managers of SMEs in a wide range of sectors. Xeinadin received investment from private equity firm Exponent back in May 2022 that has supported Xeinadin’s growth plans. The firm reported £107m in turnover that converted to £10.8m EBITDA for FY May’22.

Advisers:
Quintas:
Legal: O’Connell & Co. led by John O’Connell.

Xeindain Group:
Legal: ReganWall led by Kieran Regan and Deirdre Potenz.

Renatus Comment:  The acquisition of Quintas adds to Xeinadin’s network of over 20 offices across Ireland and sees another Irish accountancy practice form part of a consolidation play by an overseas firm, with another recent example being the acquisition of Baker Tilly Ireland by Azets. While the accountancy market globally is dominated by a small number of large players, the SME market beneath this is extremely fragmented, lending itself to buy-and-build strategies by some larger players in this segment of the market. With 1,800 firms registered with Chartered Accountants Ireland, this is unlikely to be the last acquisition we see under this strategy. For smaller accountancy practices, coming under the remit of a larger parent presents some obvious benefits, with the synergies to be realised by availing of centralised resources removing some of the barriers to growth which many firms face.

Source: Business Plus

Deal Details: Bluestone Motor Finance has been acquired by Close Brothers for an undisclosed sum.

Bluestone is a provider of motor finance for customers across the credit spectrum offering competitive rates on cars and vans throughout Ireland. Founded in 2014, it is based in Dublin and works with over 650 trusted dealers. The company reported turnover of €15.4m in FY Jun’22.

Close Brothers is a commercial finance provider for asset and invoice finance that serves customers throughout Ireland in a range of sectors from agriculture to packaging. Close Brothers is part of Close Brothers Group PLC which is based in London. The group reported turnover of £1.1bn for FY Jul’22. Close Brothers has an enterprise value of £3.45bn.

Advisers:
Close Brothers:
Legal: Simmons and Simmons led by David Brangam, Alex Brown, Christine Quigley, Geoff Curran, Nick Mercer and Jananii Vanga.
Bluestone
Corporate Finance: Deloitte led by Anya Cummins, Richard Dennehy and Dylan Gibbons, along with Deloitte’s UK FIG M&A team.
Legal: McCann Fitzgerald.

Renatus Comment:  Bluestone Motor Finance has created a distribution network of over 650 dealer partners, focusing on the Irish motor finance market. Close Brothers had an agreement to provide finance to First Auto Finance, the car finance business of Finance Ireland up until last year. The business is now re-entering the Irish market as it had ceased to service new loan agreements through First Auto Finance from July 2022. Close Brothers UK&I CEO, Sean Kemple, has emphasised that the Irish motor finance market remains a priority for the business and that a re-entry had been under consideration for some time prior to the acquisition of Bluestone.

Source: Irish Times

Deal Details: Fitzgerald Insurances has been acquired by AssuredPartners for an undisclosed consideration.

Fitzgerald Insurances, based out of Kanturk, Co Cork, provides general insurance broking services across the region of Munster to a wide range of clients in the motor, home, corporate, agriculture and retail sectors. Fitzgerald is a family-run business owned by Kieran Fitzgerald and Marion Walsh who will remain in the business post-acquisition. For FY Jul’22 the firm had turnover of c. €656k.

AssuredPartners, an insurance broking firm based in Florida, was founded in 2011. It entered the Irish market in June 2022 having acquired the Irish platform, Gallivan Murphy Insurance Brokers Ltd (“GMIB”). AssuredPartners has, since inception, acquired over 450 agencies, with more than 10,000 employees part of the group. GMIB had FY Oct’21 revenues of €11.2m which converted to an EBITDA of €7.2m.

Advisers:
Fitzgerald Insurances:
Legal: Squire Patton Boggs led by George Kennedy and Claudia Kilpatrick.

GMIB/ AssuredPartners:
None mentioned.

Renatus Comment: The acquisition of Fitzgerald Insurances marks Assured Partners fifth deal since entering the Irish market via GMIB and using it as a platform for the acquisitions of O’Callaghan Insurances, O’Donovan Insurances and Sayers Insurances. With further acquisitions in the pipeline, AssuredPartners is aiming to add a further €75m in gross written premiums over the next year, emphasising that the roll-up of insurance brokers in Ireland remains far from finished, despite the level of deal activity in recent months.

Source: Irish Examiner 

Deal Details: Dubray Books has acquired the two stores of Gutter Bookshop. The deal consideration was not disclosed.

Dubray is one of Ireland’s largest independent booksellers. It was founded in 1973 in Bray, Co. Wicklow and is currently owned by Easons, which acquired Dubray in 2020. The company has 12 stores across Ireland and more than 70 employees. Dubray does not report on turnover or EBITDA.

Gutter Bookshop was founded and owned by Bob Johnston in 2009. He set up the first store in Temple Bar with another being opened in Dalkey in 2013. Both stores will retain the brand name, ‘The Gutter’, but ownership will be transferred. The business does not report turnover or EBITDA information.

Advisers: None Mentioned.

Renatus Comment:  The acquisition of Gutter Bookshop represents a continuation of Dubray Books’ strategy to open further stores across the island of Ireland, having opened 3 across the country in 2022. Dubray’s expansion follows its acquisition by Easons in 2020, with Gemma, daughter of Dubray founder Helen Clear, highlighting at the time that the deal would help to secure the future of the business as a specialist book retailer in Ireland. The demand for physical books appears to be returning after the initial emergence of the Amazon Kindle, with the American Booksellers Association reporting that a record 825m print books were sold in the US in 2021, with Barnes & Noble, Amazon’s largest retail competitor having opened 16 new stores in 2022, with a further 30 expected to follow in 2023.

Source: Business Post

Deal Details: Euro Touring Power (ETP) has been acquired by CES Power for an undisclosed sum.

ETP offers an electrical equipment and air conditioning rental service to touring productions. The business is based out of Dublin and provides its services throughout Europe. Managing Director Vincent Campion and the rest of the ETP management team will remain with the company. The business does not report turnover or EBITDA information.

CES Power is a global provider of sustainable mobile power generation, distribution and temperature control systems for large events and festivals. Founded in 2000 by Greg Landa under the name CAT Entertainment Services, the company rebranded to become CES Power in 2021. It is based in Memphis and is backed by Allied Industrial Partners. The business does not report turnover or EBITDA information.

Advisers: None Mentioned.

Renatus Comment:  CES is the centre of a global events roll-up play in the events equipment rental space, backed by Allied Industrial Partners. Euro Touring Power is its eighth acquisition since June 2021 but its first outside the US. This deal gives the Group a European base in Ireland from which it will likely target further expansion on the continent. ETP’s management team will remain with the business post-acquisition, presenting an exciting opportunity for the existing team to drive the next phase of growth as part of a global entity.

Source: Capital IQ

Deal Details:  EMPower has sold its portfolio of Irish onshore wind farms to Statkraft. Deal consideration was not disclosed.

EMPower was established in 2015 and is headquartered out of Dublin. It serves the renewable energy sector developing renewable energy assets. The CEO, Diarmuid Twomey, is the majority shareholder of EMPower. The business does not report turnover or EBITDA information.

Statkraft Group is Europe’s largest renewable energy provider operating within hydropower, wind, solar, gas and biomass renewable energy asset sectors. The Group is owned by the Norwegian government. Statkraft Ireland Ltd, the Irish subsidiary of the group, reported turnover of €7.2m for FY Dec’21.

Advisers:
EMPower:
Legal: McCann Fitzgerald led by Valerie Lawlor.
Financial: KPMG led by James Delahunt.
Tax: KPMG led by James Kelly.

Statkraft:
Legal: ALG led by John Dallas.
Tax: EY.

Renatus Comment: Ireland has been a key market for Statkraft since initially entering the market in 2018. Over the period, the business has more than doubled its workforce and tripled its development portfolio, with the aim of increasing its global portfolio to 6,000 MW of wind power assets and 2,000 MW of solar power assets by 2025. With the Irish government having a goal of installing 5 GW of offshore wind generation by 2030, investment by groups such as Statkraft in the Irish market will be key. Statkraft has also this week announced its intention to build a grid-scale battery energy storage system (“BESS”) at its Cushaling Wind Farm in Offaly, which at 4 hours of energy storage would be the first BESS to store energy for that duration.

Source: Independent 

Terra Solar has formed a new partnership with Ørsted

Deal Details: Terra Solar has partnered with Ørsted on a number of projects to develop 400MW of solar energy for Ireland. This has the potential to power over 90,000 Irish homes.

Advisors: 
Terra Solar :
Corporate Finance: IBI led by Laurence O’Shaughnessy, Pamela Clarke and Robert Coyle

Ørsted :
None Mentioned. ​

Source: Irish Examiner

KDM Hire Limited is a Tyrone-based business that provides plant hire and equipment services. The business is majority-owned by the McIvor family.

In its financial year to December 2021, the business generated a turnover of c.  £21.9m, an increase of 34.9% year-on-year. This converted to an EBITDA of c. £9.5m, an increase of 28.0% year-on-year. Revenue growth was the primary driver of performance, with gross margins having declined marginally year-on-year.

Significant post-EBITDA cash movements include a repayment of principal under hire purchase contracts of c. £3.7m and purchase of tangible fixed assets of c. £9.4m. The business finished the year with a cash balance of c. £3.5m, a decrease of 31.5% year-on-year.

The business employed an average of 156 people in FY21 at a total cost of c. £5.1m.