Renatus’ Weekly M&A Newsletter – 18/07/2021
July 18, 2021Renatus’ Weekly M&A Newsletter – 01/08/2021
August 1, 2021
Renatus Weekly M&A & Company Performance Private Equity Newsletter 25/07/2021
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
WELCOME MEL TAYLOR
We are delighted to welcome Mel Taylor as the newly appointed CEO to our portfolio company Kappture.
Kappture is a leading provider of EPOS and mobile payment software solutions to the stadia, retail and hospitality industries. Kappture solutions can be found in Croke Park, Ascot, Twickenham and the Ethihad Stadium. It is at the cutting edge of software innovation, supporting its clients in the move from cash to cashless. Mel brings a wealth of industry knowledge in Kappture’s markets and product suite.
His appointment will help our partners who founded the business to realise the full potential of the business internationally over the years ahead. You can find out more about Mel in our appointments section.
M&A ACTIVITY
Uniphar acquires CoRRect
Deal Details: Uniphar has acquired German group CoRRect Medical. The deal consideration has not yet been disclosed.
CoRRect Medical GmbH specialises in the commercialisation and distribution of medical devices for cardiology, vascular surgery and cardiac surgery across Germany and Switzerland.
Uniphar, founded in 1967, is an Irish-headquartered diversified healthcare services group.
The acquisition is forecast to deliver a return on capital employed to Uniphar in line with its target rate of 12% to 15% within three years.
In its financial year to December 2020, Uniphar reported revenue of c. €1.8bn and EBITDA of c. €66.7m.
Advisers: Davy, RBC Capital Markets and Stifel Nicolaus Europe were the joint brokers to Uniphar.
Renatus Comment: In recent times, Uniphar has been executing its plan to become a pan-European and US-focused business, growing from its established presence in the UK&I.
CoRRect are a German company which helps with its European ambitions while in 2020, Uniphar acquired four companies, 2 of which were based in the US. Uniphar are no strangers to acquisitive growth and are leveraging that strategy here again to grow quickly.
The public markets have reacted positively to Uniphar’s recent activity and the space it plays in with its share price having increased by c. 86% over the past 12 months.
Source: Irish Times
TQS is acquired by Cognizant
Deal Details: TQS Integration is acquired by Nasdaq-listed Cognizant for an undisclosed sum.
Based in Lismore, Co Waterford, TQS is a privately owned global industrial data and intelligence company.
Founded in 1998, TQS services clients in the life sciences, food and beverage, and energy and renewables industries.
Cognizant is one of the world’s leading professional services companies, transforming clients’ business, operating and technology models for the digital era.
Headquartered in the US, Cognizant is ranked #185 on the Fortune 500 and is consistently listed among the most admired companies in the world.
Advisers: None mentioned
Renatus Comment: TQS Integration Limited, known locally for sponsoring the Waterford hurling team, reported revenue of c. €18.2m and EBITDA of c. €2.8m in its most recently filed year to December 2020. Prior to the transaction, the business was owned by Maire Quilty and Tom Quilty.
The Munster couple founded the business from a kitchen table and led global big data solutions to the life sciences field from Waterford. A lot of its data scientists were based around Dungarvan which is a great story for how a global success story can originate and thrive from a rural setting.
Source: Cognizant
Davy is acquired in a 3 part deal
Deal Details: Davy has announced three agreements that will see the business being acquired by long-term strategic owners.
Bank of Ireland will acquire Wealth Management, Capital Markets and associated businesses for €440m, Davy Global Fund Management (DGFM), will be acquired by IQ-EQ for an undisclosed sum and Rize ETF will be acquired by AssetCo for £16.5m (€19m).
The deal, which is subject to regulatory approval, is expected to complete by the end of this year after which DGFM will rebrand to IQ-EQ. Ireland’s largest wealth manager Davy manages over €16bn of client assets.
IQ-EQ is a Luxembourg-based investor services group.
AssetCo is a UK-based asset and wealth management company.
Advisers: Alongside Rothschild, a Davy corporate finance team of John Lydon, Peter Bennet, Michael Hussey and Richard Dennehy advised on the complex hat trick of deals with Bank of Ireland, IQ-EQ and AssetCo.
An IBI Corporate Finance team of Tom Godfrey, Laurence O’Shaughnessy and Alex Penny advised Bank of Ireland.
Renatus Comment: This concludes what has been a whirlwind couple of months for Davy.
In 2006, Bank of Ireland, sold its 90.4% stake in Davy Holdings to the management and staff of Davy. Bank of Ireland had been the main shareholder in Davy between 1988 and 2006. Today, Bank of Ireland will bring the majority of the Davy business back under its umbrella for a reported €440m.
Notably, AIB and Goodbody, who are Ireland’s other primary pillar bank and stockbrokers respectively, recently completed a very similar transaction. AIB had owned Goodbody for 21 years until 2011, when they sold Goodbody to Fexco for a reported €24m. In April of this year, they repurchased Goodbody for €138m.
Source: Davy; Irish Times
Arise is acquired by ADEC innovations
Deal Details: Limerick firm Arise Europe is acquired by Swiss Company ADEC Innovations for an undisclosed amount.
Arise, based in Raheen, employs 30 staff who will join Adec’s 4,400 strong workforce.
Arise has provided both outsourcing services which included Customer Care, Technical support and Repair services as a key supplier to AST and later to Samsung in a multilingual environment. Arise subsequently developed a reverse logistics division becoming a key supplier to Dell Manufacturing in both Limerick and in the US running the test labs for manufacturing.
Geneva-headquartered ADEC Innovations is a world leader in designing, developing, and delivering innovative solutions and services in critical areas in sustainable development.
Advisers: A ReganWall team of Kieran Regan and Sarah Connolly provided legal advice to Arise while a Deloitte corporate finance team led by Derek Murphy provided financial advice to Arise.
Renatus Comment: Arise has an interesting history. The business was established in 1999 following an MBO of the remaining AST Ireland business.
AST was a global computer manufacturer that operated a plant in Limerick. AST moved the majority of its business out of Ireland in 1999 and stopped trading entirely not long thereafter.
Meanwhile, Arise has traded successfully for over two decades since that time. It is led by its managing director Joe Cahalane and operations director Ger Burke who are the main sharehodlers in the business.
In its most recently filed accounts to December 2019, the business reported revenue of c. €7m and EBITDA of c. €326k.
Source: Arise Europe
syncreon is acquired by DP World
Deal Details: Irish-founded logistics group syncreon has been acquired by Dubai-based DP World for $1.2bn (€1.02bn).
syncreon, led by CEO Brian Enright, was formed in January 2007 when Walsh Western International (WWI) and TDS Logistics, both leaders in their respective areas of global supply chain management, joined forces.
US-based syncreon has a global presence across 91 sites in 19 countries and services a large and diversified portfolio of customers made up of multinational companies.
DP World, the leading provider of worldwide smart end-to-end supply chain logistics, enabling the flow of trade across the globe.
DP delivers its services through interconnected global network of 148 business units in 60 countries across six continents.
Advisers: Citi acted as financial advisers and Hogan Lovells as legal advisers to syncreon.
Renatus Comment: Cork-native and University College Galway alumnus Brian Enright is the CEO and President of syncreon. Prior to that, he was the CEO of Walsh Western International between 1999 and 2007. In 2007, he led the acquisition of TDS Logistics which was based in Michigan USA. The businesses combined under the syncreon brand and established its HQ in Michigan.
It is a remarkable example of an Irish business acquiring a US one, and thereafter establishing the US as its centre of operations.
Source: syncreon
Principal Insurance is acquired by Aston Lark
Deal Details: Aston Lark Ireland has announced the acquisition of Principal Insurance Ireland DAC. Deal terms were not disclosed.
Dublin-based Principal Insurance was established in 2015 and has since grown to become a leading player in the Irish motorcycle insurance market, with a 30%+ market share.
Aston Lark entered Irish market with the acquisiton of Robertson Low and Wright Insurance Brokers in 2019.
In May 2021, both businesses merged to become Aston Lark Ireland, consolidating their resources, giving the company greater access to insurers and a wider range of products and markets.
Advisers: None mentioned
Renatus Comment: This marks another acquisition in the Irish insurance space which has been extremely active for a number of years now. The industry appears to be transitioning from what was traditionally a very fragmented market to a more consolidated one.
Aston Lark are one the companies leading this consolidation. This is its 5th acquisition of 2021 after acquiring North County Brokers, O’Loughlin Insurance Goup, Brady Burns & Associates and McMahon Galvin.
Principal Insurance Ireland Limited reported revenue of c. €6.6m in the year to October 2019, which is its most recently filed year.
Source: Aston Lark
NitroSell acquired by Volaris Group
Deal Details: Cork-based NirtoSell has been acquired by Volaris Group for an undisclosed sum.
Founded in 2005, NitroSell is an ecommerce platform that helps retailers drive sales and revenue through online channels. NitroSell delivers integrated ecommerce solutions for SMB to Enterprise-level retailers. Its mission is to turn brands into omnichannel retail operations. Its software enables “brick-and-mortar” retailers to sell online by providing a solution that integrates tightly into their existing in-store retail management system. NitroSell has customers all over the world from its base in Cork, Ireland. It also has offices in the US and Poland.
Volaris is an operating group of US-based Constellation Software Inc., which is focused on acquiring and growing global vertical market technology companies.
Advisers: A ReganWall team of Kieran Regan and Sarah Connolly provided legal advice to NitroSell.
Renatus Comment: NitroSell was established in 2005 and is led by its Chairman Charles Garvey and its CEO Donogh Roche. It had previously received investment from Enterprise Ireland.
NitroSell is another successful Irish business that is at the cutting edge of enabling eCommerce for retailers, providing solutions to customers globally. NitroSell can be added to the ever longer list of Irish-based global leaders in eCommerce alongside the likes of Stripe, eShopWorld and others.
Source: NitroSell
Hasting Insurance Brokers acquires Thompson Insurances
Deal Details: Hasting Insurance Brokers has announced the acquisition of a majority stake of Norman Thompson Insurances Limited and Norman Thompson Life and Pensions Limited (together, Thompson Insurances), one of the leading corporate insurance brokers in Ireland.
Hastings is a family-owned insurance broking group providing commercial and personal lines insurance solutions to business and retail customers. Established by David & Mary McDermott in 1980, the Mayo-headquartered business has successfully established itself as one of the largest providers of quality insurance services in Ireland with branches across 7 locations nationally.
Founded by Norman Thompson, Thompson Insurances is one of the leading independent corporate insurance brokers in Ireland with over 40 years of successful trading. It specialises in Construction and Infrastructure Projects, Renewable Energy, Professional Services, Manufacturing, Leisure & Hospitality, Technology, Communications & Media, and Aircraft Leasing. Thompson Insurances will continue to trade as normal, retaining its Dublin office and all staff will stay with the business.
Advisers: Flynn O’Driscoll provided legal advice for Hastings with a team of Pat Flynn, Cian O’Leary, Cian Durkan (corporate and banking), Julian Cunningham (property) and Claire McDermott (employment). RBK (Chris Ball, Jennifer Brennan, Jackie Masterson, Patrick Fannon) provided corporate finance, tax and financial due diligence for Hastings.
For Thompsons, Eversheds (Sean Ryan, Katie Haberlin) provided legal advice while KPMG provided Corporate Finance advice (David O’Kelly and Megan Smythe).
Bank of Ireland on the financing side were represented by Siobhan Durkan of P O’Connor Solicitors.
Renatus Comment: Add this to the long list of insurance market deals recently.
For Thompson, this marks the end of a 40-year career for Norman Thompson who built the business. He is able to crystalise the value he created while preserving the legacy in Thompsons with existing Managing Director, Shane Hennelly, increasing his shareholding as part of this transaction.
For Hastings, this will add sector expertise and regional breadth to its business and should set it up for future growth.
Source: Thompson Insurances
Power Capital acquires Terra Solar Portfolio
Deal Details: Power Capital Renewable Power has acquired a controlling stake in an extensive solar portfolio under development by Terra Solar.
The portfolio contains 400MW of solar capacity, to be located in Waterford and Cork, which is expected to start generating power by the end of 2023. For context, Ireland only has 40MW of solar capacity today.
Dublin-based renewables developer Power Capital Renewable Energy was bought by Parisian private equity firm Omnes Capital in November 2020. It estimates that c. €200m of CapEx is necessary to get the solar plants operational. Construction is expected to start next year with the first plants set to be operational in mid 2023 and the portfolio to be fully built by 2027.
Irish-based Terra Solar’s aim is to develop, finance, construct and operate solar farms on the island of Ireland. It will retain a share of the portfolio and develop them alongside Power Capital.
Advisers: Philip Lee provided legal advice to Power Capital. Its team was led by Eoghan Doyle who was supported by Siobhan McCabe, Hugo Grattirola, Elaine Whelan, Maeve Delargy, Alice Whittaker.
IBI Corporate Finance also acted for Power Capital.
Beauchamps represented Terra Solar on legals.
Renatus Comment: The renewable energy sector, particularly in wind and solar, has been an active space for some time. Significant capital and entrepreneurship is needed to achieve the Irish government’s ambition to have 70% of its power generation fleet based on renewables by the end of this decade.
Source: PV Magazine
Deals Updates & Other News
NatWest proposed deal with Ulster Bank
Deal Details: It is reported that Permanent TSB plans to acquire €7.6bn of loans and 25 branches from Ulster Bank, as the UK-owned lender retreats from the Republic.
PTSB and Ulster Bank’s owner, NatWest Group, said that they had signed a memorandum of understanding on the shape of a proposed deal, which would also see between 400 and 500 Ulster Bank employees transfer.
The proposal also sees NatWest taking up to a 20% stake in PTSB as part payment for a deal that is expected to increase the size of the Irish State-controlled bank’s loan book by over 50% to about €22.5bn.
Source: Independent
Bon Secours and Alliance Medical to acquire Barringtons MRI
Deal Details: The CCPC has been notified that Bon Secours and Alliance Medical will be taking joint control of Barringtons MRI.
Bon Secours is the largest provider of private healthcare services in the State and operates private hospitals in Cork, Dublin, Galway, Limerick and Tralee.
Alliance Medical is a leading provider of diagnostic imaging across Europe. In the State, it is headquartered in Limerick and operates 30 clinical locations in Dublin, Cork, Galway and Belfast.
Barringtons MRI provides diagnostic imaging services from a premises within the Bon Secours Hospital in George’s Quay, Limerick.
Source: CCPC
Kitman Labs looking to expand
Deal Details: It has been reported this morning that Kitman Labs is looking to add between 50 to 100 people to its team in Ireland over the next year. For context, the business currently employs c. 100 people.
Kitman Labs is an Irish-founded sports technology company. It provides customers, including Chelsea FC and others, with a performance intelligence platform to track and analyse athlete data.
The jobs will predominantly be Irish-based and in the areas of data science, engineering, product management, design, customer support and sports science.
Kitman Labs recently acquired Presagia Sports and is quickly becoming one of Ireland’s most exciting new businesses.
Source: Sunday Independent
COMPANY PERFORMANCE
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
Staunton Sports Limited, headquartered in Mayo, trades as sports retailer Intersport Elvery’s. At the time of filing the accounts, Intersport Elvery’s operating from 51 stores across Ireland.
For the year ending December’19, Intersport Elvery’s saw turnover rise by c. 12% to €86.4m and EBITDA rise by c. 97% to c. €4.1m. The outperformance in came from relative improvements in the overhead cost base.
The cash balance increased by just under €3m to end at €6.65m at the period end. The larger movers in cash were new loans drawn equating to a c. €8.3m inflow which were partially offset by (1) fixed asset purchases of c. €1.8m, (2) loans to subsidiary / group companies and (3) debt repayments of c. €1.4m.
The business has been impacted by COVID-19, having to close its stores. Despite this, the Directors’ Report mentions that the business expects to report turnover inline with FY19’s level and EBITDA in excess of €4m for FY20.
The business employed 650 staff during the period at a cost of c. €12.4m. The business is owned by Karen Hegarty (21%), Mike Feely (10%), Lorna Irwin (8%) and Dunkellin Investments Unlimited Company (61%).
King & Moffatt Ireland Limited is a Mechanical and Electrical contractor headquarted in Carrick on Shannon in Leitrim. The company has been operating for over 40 years and has worked with customers in a variety of sectors from Commercial and Industrial to Food, Health and Hotel.
For the period ending June’20, turnover decreased by 4% to €37.7m while EBITDA increased by c. 32% to €2.8m. Gross margins increased by 80 basis points during the period from 7.3% to 8.1%.
Cash decreased marginally during the period by c. €29k down to €3.74m. The big drain on cash during the period was a c. €9.7m investment into working capital and a €1.2m dividend paid during the period. These were partially offset by a loan received from a participating interest amounting to c. €7.9m.
The business employs 166 staff at an annual cost of c. €7.2m. King & Moffatt is owned by Karl Moffatt (20%), John Moffatt (20%), Padraic King (20%), Pat King (20%) and Ciaran King (20%).
RECENT FUNDRAISINGS
Who: Belfast firm ReformRX, founded by Neal and Yvette McGaffin, gets investment boost. ReformRX produces a smart reformer product, the primary piece of equipment used in pilates. ReformRX is akin to the Peloton of pilates.
What: The funding amount was not disclosed. NI offered ReformRX technical development support,
Why: The company aims to target the UK and Ireland markets as well as open a dedicated RX studio in London to offer a showroom like experience to further facilitate the sales process.
Source: Belfast Telegraph
Who: Highfield Solar secures financing.
What: €160m debt facility is provided by COOPERATIEVE RABOBANK U.A., LBBW & Norddeutsche Landesbank Girozentrale -NordLB-.
Why: The funding is for Rosspile and Gillinstown Solar Farms in Ireland. Currently in construction, the projects total 282MWp and will come online in July and October 2022.
Advisers: Colm O’Callaghan & Rebecca Greene of PwC worked with Highfield on the tax side while Arthur Cox LLP acted on the legals.
Lenders were represented by DLA Piper.
Source: LinkedIn
Who: Dublin-based fintech Soldo, founded in London by Carlo Gualandri, raises funding. The company, which relocated its corporate headquarters to Ireland two years ago, has developed an automated platform that enables businesses to manage company-wide expenses.
What: $180m (€153m) is raised in an oversubscribed funding round. The series C funding round was led by Temasek, a leading global investor headquartered in Singapore. It brings funding to date to more than $260 million with other backers including Accel, Battery Ventures and Silicon Valley Bank.
Why: The new funding is intended for ramping up entry into new markets and to increase headcount, including in Dublin, where it employs 12 people currently.
Source: Irish Times
Who: Irish biotechnology company RemedyBio secures new investment.
What: €8m comes from the European Innovation Council in addition to a €2.5m grant awarded by the council to the company last year.
Why: RemedyBio’s Nanoreactor platform is being tuned to respond to variants and future diseases. The aim is to create a rapid passive therapy against strains of Covid-19 and to control future pandemics more rapidly.
Source: Irish Times
Who: Smart Nano NI consortium, led by data company Seagate Technology, receives UK government funding. Queen’s University, Ulster University and North West Regional College and companies Analytics Engines, Causeway Sensors, Cirdan Imaging, Digital Catapult NI and Yelo are also part of the consortium.
What: £42m (€49m) is awarded through the UK Research and Innovation’s (UKRI) Strength in Places Fund. With additional support from other sources this brings the total value of the development project to almost £64m.
Why: The investment will deliver significant benefits for the economic growth of the region and the corridor of businesses from Belfast to Derry ensuring a levelling up of shared opportunities.
Source: Irish Times
Who: HaloCare, founded in 2020 by Netwatch founders Niall Kelly and David Walsh, and entrepreneur Dr. Johnny Walker, secures funding.
What: €200,000 investments comes from Enterprise Ireland.
Why: The funding will help company break into the US market.
Advisers: Alan Ryan & Graham Coyne of Wallace Corporate Counsel
Source: Business Post
Who: Lintil, online property platform founded by Emmet Creighton and Jonathan McLaughlin, secures funding.
What: About €1m is provided by several private backers.
Why: The purpose of funding was not disclosed.
Advisers: Alan Ryan, Michael Bambrick & Fran Keogh of Wallace Corporate Counsel.
Source: Irish Times
Who: Intouch has raised funding. The business has developed an AI-driven in-store customer personalisation platform. Customers include Musgrave, Circle K, RedBull and others. Its products allow brands to show dynamic promotions and ads in locations across Ireland.
What: The business has reportedly raised an undisclosed amount from backers including James Murphy who previously sold his hair restoration product, Viviscal.
Why: The use of funds was not disclosed.
Source: The Sunday Times
Who: Axonis Therapeutics has raised financing. The business develops therapeutics for epilepsy, spinal cord injuries and other neurogenerative diseases. Axonis is based in Cambridge, Massachusetts but was founded by Cork natives Dr. Shane Hegarty and Dr. Joanna Stanicka who met while doing research in University College Cork.
What: The business raised a reported $5m from backers including the Christopher and Dana Reeve Foundation, a vehicle establihsed by the late former Superman actor and his wife. Axonis previously raised $4m last year.
Why: The financing will be used to fund further product development in advance of a larger fundraising round in the near future.
Source: Sunday Independent
Who: Dublin-headquartered Antikytera which was founded by Kristian Karazisses and Paula Guimaraes. The business is aiming to bring augmented reality into video calls and other forms of remote communication to improve companies’ communications and interactions.
What: The business is reportedly planning a fundraise. It had previously raised €5m from an unnamed German fund last year.
Why: The specific purpose was not disclosed but the business is growing rapidly, now employing 20 people since its inception in 2017.
Source: Business Post
EXECUTIVE AND BOARD APPOINTMENTS
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 with details of key recent executive and board level appointments.
Ken McGrath
Source:
(Google Images & Irish Times)
John Noone
Source:
(Google Images & LinkedIn)
THOUGHT OF THE WEEK
The S&P500 index was last week tracking 40 times p/e which is nearly double its historical average.
Markets ended higher having wobbled earlier in the week. There is no doubt that everybody is watching, wondering if QE keeps the party going or whether there could be a correction in the coming weeks or months.
This week will be interesting in the public markets. The graphic below shows that a lot of companies are to report earnings. The effect of supply shortages, lockdowns, releases, new patterns evolving, old patterns returning will be very interesting to see the effect on individual and overall markets.
Source: Earnings Whispers Twitter
@RenatusCapital Tweets
€6.8bn
The Irish government deficit for Q1 2021, representing a 6.7% of quarterly GDP, according to @CSOIreland
3.2%
The year-on-year decrease in the goods handled by the main Irish ports for Q1 2021 amounting to 12.1 million tonnes of goods handled, according to @CSOIreland
5.5%
The year-on-year decrease in the value of products manufactured and sold by Irish based enterprises for 2020 amounting to €127.2bn worth of goods, according to @CSOIreland
31%
The Irish household savings ratio for Q1 2021 amounting to €10bn – 4 times more than what households usually save in Q1, according to @CSOIreland
5.3%
The year-on-year decrease in the Irish manufacturing prices for June 2021, according to @CSOIreland
SIGN UP TO OUR NEWSLETTER
ABOUT RENATUS
Renatus was established in 2014 to provide growth funding to growing Irish SMEs and to partner with ambitious management teams to help companies reach their full potential.
Renatus targets companies with sustainable earnings of €1m+ and valuations typically in the range of €5m – €20m. Our typical solutions include:
- Succession planning
- Management buyouts
- Management buy-ins
- Growth financing – both organic and acquisition growth financing
- Full and partial share sale.
OUR INVESTMENTS
LEARN MORE…
Renatus’ Knowledge Centre
Our Knowledge Centre is filled with insights from some of Ireland’s top business leaders on Succession Planning, Management Buyouts / Buy-Ins, Growth Financing and much more.
Subscribe to our Podcast
The Renatus Podcast, hosted by Renatus advisor and investor Greg Dilger, is a series of conversations with people in business – owners, operators, and investors.
Receive this Newsletter Direct to your Inbox
To receive the Renatus Weekly M&A & Company Performance Newsletter directly to your inbox, click the button below and subscribe.
