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Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
Deal Details: Ireland’s biggest pharmaceutical wholesaler and distributor Uniphar acquires EPS Group and Irish-based M3 Medical.
The total potential cost of the two acquisitions is €40m over four years, with the deferred consideration linked to the earnings performance of the businesses over the four year period.
Both EPS Group and M3 Medical deliver sales, marketing and distribution services to medical device manufacturers in the areas of interventional cardiology and vascular medicine.
The EPS Group comprises EPS Vascular AB and EP Endovascular AB, both registered in Sweden, and EPS Vascular OY registered in Finland, delivering these services services across Sweden, Denmark, Norway, Finland, Iceland and the Baltics.
On a proforma basis for the full year ending 31 December 2019 the acquisitions in aggregate are expected to deliver revenues of c. €22m.
The acquisitions were financed out of the proceeds of the placing completed alongside the listing of the Group’s shares on 17 July 2019.
Advisers: Capnua Corporate Finance advised Uniphar on the acquisitions. William Fry Solictors were the legal advisers on the M3 Medical acquisition.
Renatus Comment: Uniphar occupies, and in many cases dominates, most elements of the Irish Pharma and MedTech value chain from pre-wholesale to retail. Their ambition is to replicate this in Europe and eventually become the continent’s leading independent distributor of medical devices. Ger Rabbette and his team have been highly acquisitive and have a track record of delivering growth on the back of them. We expect to be reporting on more of these types of deals in the near future as Uniphar pushes for European dominance. The share price @ 1.24 is trading marginally ahead of its IPO price of 1.18
Source: Uniphar Press Release
Deal Details: Sage Group sells its payment division to US firm Elavon for €270m.
Elavon is a global merchant acquirer and subsidiary of U.S. Bank (NYSE: USB). Elavon employs more than 4,300 employees and has operations in 10 countries.
Sage Pay, a division of The Sage Group plc (SGE), is a well-known and established payments gateway business in the United Kingdom and Ireland.
Advisers: Rothschild & Co served as lead financial advisor and Allen & Overy as legal advisor, along with Morgan Stanley and Citigroup Global Markets as financial and corporate broking advisors to Sage.
Renatus Comment: Sage is the second largest listed software company in the UK with over three million customers in 23 countries and employing over 13,000 people. The company reported a 7.64% increase revenue of c. £1.85bn in FY18 with EBITDA up 21.92% to c. £495m.
Source: Elavon Press Release
The Paramount Hotel and its well-known bar, the Turk’s Head on Parliament Street in the heart of Temple Bar, have been put on the market for a guide price of €25m.
The 66 bedroom hotel has the potential to increase to 130 bedrooms. It has been brought to the market by agent CBRE.
Source: Irish Times
British construction materials group Breedon is pursuing a number of Irish bolt-on acquisitions.
Breedon trades under the Lagan name in Ireland and in the North as Whitemountain after entering Ireland in 2018 through the €500m takeover of housebuilding and aggregates business the Lagan Group.
Source: Irish Examiner
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.
MJ Flood Group Limited, which trades as MJ Flood, is a Dublin based company that was established in 1935. The company is the largest indigenous supplier of photocopiers, digital technology, office furniture and interiors for the modern office environment. In FY18, the company saw revenue decrease slightly by 1.6% to c. €81.7m although EBITDA increased by 5.4% to c. €13.3m. The company employed an average of 244 people at a cost of c. €16.5m during the year. The company purchased c. €5.7m of tangible fixed assets during the year, with the majority relating to new office equipment, and made a loan repayment of c. €480k leaving net cash on the balance sheet at c. €21.7m against a debt balance of c. €4.3m. Net assets stood at c. €56.7m at the end of FY18, up from c. €51.0m the previous year. The company is 100% owned by the Power family, with Michael Power Jnr and John Power the majority shareholders.
With nearly 40 years’ experience in the access business, Height for Hire is one of Ireland’s most prominent hire companies. The business now has 20 locations across 4 different countries: Ireland, the UK, Hungary and Slovakia. For FY March 2019, revenues for the group were effectively flat at c. €26.9m while EBITDA decreased slightly by 1.4% to stand at c. €7.7m. EBITDA converted to c. €1.2m of a net cash increase after c. €12.2m was spent on new fixed assets, offset by c. €5.9m of proceeds from finance lease payments. Height for Hire is owned by McArdle family members which includes Fergus, Cabrini, Henry, Lorraine and Frances among others.
Catering Disposables was established in 2003 and is a leading supplier of disposable products to the Catering & Retail industry. In a good year for the business, turnover rose by 3.8% to c. €14.3m while EBITDA increased by 26.7% to c. €1.6m as gross margins increased from 26.2% to 28.2%. The Dublin-based company employed an average of 31 people during the year at a cost of c. €1.4m. There was a net cash increase of c. €727k after c. €477k and €132k was spent on repayment of loans and puchases of fixed assets respectively. The business is owned by Dowling family members James, Sharon and Ursula.
Who: Waterford online waste marketplace provider Kollect seeks to raise funds from the initial public offering (IPO).
What: The company is hoping to raise more than €1m on the Nasdaq First North market in Stockholm on December 19. Kollect will use the ticker symbol KOLL. The subscription period will run from November 25 to December 10.
Kollect has been advised by Mangold FondKommission AB and Eversheds Sutherland in Stockholm and by Fóla Partners, Kiely Solicitors and Mazars in Ireland.
Why: The purpose of the fundraise hasn’t been specified, however it is understood the funding will be used towards expansion as Kollect plans to branch out to 75 cities across Britain.
Source: Irish Independent
Who: Louth-based ocean data firm Xocean, founded by James Ives in 2017, has secured funding. The company provides turnkey data collection services to surveyors, companies and agencies. Using Unmanned Surface Vessels (USVs), Xocean collects ocean data, from mapping the seabed to environmental monitoring.
What: The provider(s) of the €7.9m investment were not disclosed.
Why: The purpose of this funding is to support its plans for international expansion. Xocean also plans to build an additional 22 USVs over the next 12 months and hopes to recruit an additional 140 employees to service the market demand.
Source: Silicon Republic
Who: Galway-headquartered Bio-Medical Research Limited (BMR) has secured a financing.
What: €7.5m finance package has been provided by an SME private debt fund lender Beechbrook Capital. BMR was advised by DC Corporate Finance and Maples Solicitors. Beechbrook Capital was advised by Ronan Daly Jermyn Solicitors and Gilroy Gannon Chartered Accountants.
Why: The investment will support BMR to broaden and deepen its market-leading product suite which includes the well-known Slendertone and Flex Belt range.
Source: privateequitywire
Who: Irish Life Investment Managers (Irish Life), along with California-based financial services company Research Affiliates, is to launch a new environmentally sustainable, socially responsible fund.
What: The fund will have $100m (€90.6m) in initial funding. It is the first to be launched here based on Research Affiliate’s ESG (environmental, social and governance) indices.
Why: The Irish Life RAFI ESG Developed Equity Fund offers investors the opportunity to make socially responsible investments along with the potential for long-term market outperformance.
Source: Irish Times
Who: Yew Grove REIT plc, an Ireland-focused Real Estate Investment Trust, is looking to raise funds.
What: The company is aiming to raise €19.4m from a share issue.
Why: The money will be used to fund its pipeline of acquisitions.
Source: Irish Independent
Who: Dublin-based company Storyful, which uses social media feeds, user-generated content and proprietary technology to frame news reporting, has received further funding.
What: €4m cash injection comes from Rupert Murdoch’s News Corp bringing the total amount provided by its parent to nearly €40m since it was acquired in 2013.
Why: The funds are to support the loss-making company.
Source: Irish Times
Who: Castlewellan guesthouse Hillyard House has secured investment.
What: Over £3m (€3.49m) comes from a Co Down retail company Fresh Food Centres, Economic development agency Invest NI has also offered the business £300,000 (€349,000).
Why: The funds will be used for the redevelopment of the old guesthouse to include 20 ensuite bedrooms, a 90-seater restaurant and a bar, creating 37 jobs, and expects to open in February 2020
Source: Belfast Telegraph
Who: Northern Ireland funeral firm Norman McBriar & Son funeral directors in Saintfield has received investment.
What: £500,000 (€581,000) investment was supported by Ulster Bank.
Why: The funds were used to relocate the business to larger premises with better facilities to support growth.
Source: Belfast Telegraph
Who: Kerry Co-op Society is selling 800,000 of shares in Kerry Group.
What: The sales will raise about €90m based on a reported stock price of €112.50 per share, a 2.5% discount to the stock’s Tuesday close.
Why: The purpose of a fundraise was not specified.
Source: Irish Independent
Who: Greencoat Renewables is looking to raise funds. The company acquired Killala community wind farm in Co. Mayo earlier this week for €37.2m bringing its portfolio in Ireland up to 13 wind farms with a combined capacity of c. 450MW.
What: Targeted €100m is to be raised in a share issue programme. Up to 350 million new shares in the capital of the company will be issued in a number of tranches over a 12 month period. Greencoat intends to issue approximately 88 million placing shares at a price of €1.13 per placing share in the first tranche of the programme.
Why: The funds will be used to finance further merger and acquisitions opportunities.
Source: Irish Independent
Instead of ‘Thought for the Week’, we are bringing you a weekly tracker using odds from oddschecker and taking off bookmakers margin to come up with deemed percentage probability of outcomes.
There has been no movement in the past week in the probability of when some sort of Brexit occurs:
By 31 December 2019 4.5%
H1 2020 64% (49% Q1 +15% Q2)
H2 2020/2021 14%
Not before 2022 17%
——————————————————————————————
With regard to the outcome of the General Election the markets are guiding a 68% (9 to 4 on) chance of a majority Conservative government.
If you are not in agreement with any of above you can get the odds here and back your opinion: Oddschecker – Brexit
2.4%
The year-on-year increase in the employment in Ireland for Q3 2019 bringing the number of employed people to 2,326,900 people bringing the unemployment rate down to 4.9%, according to @CSOIreland
7% & -20%
3.2%
The year-on-year increase in the spend in Irish supermarkets for the first 10 months of 2019, amounting to €11.2b spent so far this year, according to Kantar research. @irishexaminer
2.4%
The year-on-year increase in the average salary in Northern Ireland for 2019, rising faster than the UK average increase of 1.8%, according to research from Hays.
25%
The average share of Irish homeowners’ after-tax income spent on mortgage repayments in 2019, compared to 40% in 2008, according to a new study published by the Central Bank. @IrishTimes
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