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: UK private equity firm, Elaghmore, has acquired English Architectural Glazing (EAG) for an undisclosed figure.
Founded in 1985, EAG provides envelope cladding packages to an established base of long-term clients across the UK. The business operates from three sites in Norfolk, Suffolk and Staffordshire, employing 125 people.
Elaghmore also owns Dublin-based glazing manufacturer Alucraft Group, which the firm acquired in 2018. EAG and Alucraft will run autonomously while retaining their own brand and management teams.
Advisers: Elaghmore was advised by Ernst & Young (Financial DD), Squires Patton Boggs (Legal), while EAG was advised by PEM Corporate Finance and Mills & Reeve (Legal).
Renatus Comment: This is the eighth acquisition made by Elaghmore’s debut fund, which closed in 2016 at £60m to be invested in small to mid-cap industrial companies headquartered in the UK. The fund is now 50 per cent deployed.
Source: Real Deals
Deal Details: Star Capital has acquired Windhoist Holdings for an undisclosed sum.
Originally founded in Ireland, wind turbine installation contractor Windhoist Holdings’ main business is now in the UK.
Windhoist works with all major wind turbine manufacturers, including Siemens Gamesa, Vestas, Nordex, Enercon and General Electric (GE). In addition to Scotland and Ireland, the company also has offices in Australia, South Africa and Morocco.
Windhoist has erected over 6,000 turbines with an installed capacity in excess of 11GW across the world.
This is the sixth investment by European investor Star Capital’s €800 million Fund III.
Advisers: None mentioned
Renatus Comment:
Hugh McNally (100% shareholder) pivoted the family engineering company into a wind specialist with the most recent reported turnover of £47m in Dec ’17 and reported EBITDA margins of c.15%.
It is a great Irish success story that ranks alongside the Mercury, KN, Kentz, Kentech, ESB International, H&MV and many more success stories of an Irish company going international with great engineers.
Source: Irish Times
Deal Details: Perwyn has acquired 49% stake in Westerwood Global in a deal reportedly worth tens of millions of Euros.
Westerwood Global is a low-profile Irish company that provides services to chipmakers such as Intel. Basil Holian, the founder and chief executive of Westerwood has retained a 51% shareholding in the business.
Westerwood employs more than 400 people in Europe and America and made €3.8m pre-tax profit on turnover of €17m last year.
Perwyn are a UK-based family-funded private equity firm.
Advisers: None mentioned
Renatus Comment:
We are increasingly seeing this type of deal where founders are chipping off half and rolling half. It makes so much sense as by selling all they are leaving value behind if there is momentum in the business and, by retaining 100%, entrepreneurs have portfolio risk and liquidity trapped in the busienss.
I think it is one of the best win-win deal structures out there and works beautifully for both sides. Expect to read a few such deals completed by us over the years ahead.
Source: The Sunday Times
Deal Details: The Hershey Company has made a minority investment in Fulfil Holdings Limited.
Dublin-headquartered Fulfil was launched in 2016 and has rapidly grown since. They are now outselling many traditional chocolate snack bar brands in the UK and Ireland and named a top 50 consumer brand in Ireland.
The Irish company is expected to expand beyond its current 10 countries – including European countries and Australia.
Advisers: Jefferies LLC acted as financial advisor to Fulfil Holdings Limited in connection with the transaction.
Renatus Comment:
The visibility of this growth has been screaming to anyone who has been at a till over the past year or two. Barry Connolly has pulled off a stroke similar to James Murphy in Lifes2Good. He has gone from super profitable distributor of brands such Red Bull, Peroni, Volvic and dozens more to owning a brand and going global with same.
Regardless of the money involved in the deal, the distribution Hershey will bring to Fulfil should make this brand global overnight.
Source: Hershey’s Press Release
Deal Details: Sisk is reportedly set to acquire Vision Built Manufacturing, an Oranmore, Galway-based business which had fallen into examinership.
Sisk, which is one of Ireland’s most successful and recognisable contractors, is reportedly committing an initial €487k in equity to keep Vision Built Manufacturing trading with future investments in the pipeline.
Vision Built Systems are specialists in light gauge steel structures for hotels and residential end-markets. The business was owned by Gerry McCarthy, Matthew Bartram and John Maynard with offices in Galway, London and Norwich.
Advisers: None mentioned.
Source: The Sunday Times
Deal Details: Ballymena manufacturer Wrightbus is reportedly in talks about selling the business to a major Chinese engineering company Weichai for around £50m (€55m).
Weichai, part of Shandong Heavy Industry, is said to be in discussions at Wrights’ headquarters in the Co Antrim town. According to a reports, Weichai would take around eight weeks to evaluate the business.
Source: Belfast Telegraph
Deal Details: The Competition and Consumer Protection Commission cleared the
proposed transaction, whereby Gowan Group Limited would acquire sole control of Opel
Automobile Ireland Limited.
Gowan Group, owned by the Maughan family, already holds the Irish franchises for the Peugeot and Honda motor brands.
Source: CCPC
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
MSD Ireland unveils first female plant lead
Healthcare company MSD Ireland has promoted Marie Martin to plant manager of MSD Carlow. Ms Martin succeeds Jean-Albert Pittaluga, who was plant manager since 2014. Mr Pittaluga has been appointed plant manager of MSD’s Mirabel site in France. Ms Martin’s appointment is the first time that MSD has appointed a female site lead in the 50 years since they set up in Ireland. She was one of the first employees when MSD opened its Carlow operation in 2008.
Revive Active appoints new Head of Retail Marketing
Revive Active has announced the appointment of Helen Mannion as Head of Retail Marketing. Ms Mannion will be responsible for both national and global marketing strategy for its range of super supplements sold in pharmacies and health stores nationwide. Ms Mannion has over 16 years’ experience in marketing with both an agency and company background. She has worked as senior client account manager in marketing agencies along with retail marketing roles in companies such as Smyths Toys, eMobile & Cuisine De France. Most recently she was the Irish Marketing Manager for Lifes2good.
New chair named at IT firm Arkphire
Irish-owned IT solutions and managed services company, Arkphire, has appointed Paul Nannetti as chairman of the company’s board. Headquartered in Dublin, Arkphire delivers IT procurement solutions to customers across more than 90 countries. Mr Nannetti has a wealth of international experience in the Technology industry, having served until 2017 as a member of the Group Executive Committee of Capgemini, the global Consulting and IT Services organisation.
Mindshare appoints new Strategy Director
Chris Cashen is to join the GroupM agency Mindshare as Strategy Director. A well-known figure within the industry, he joins the agency from Javelin where he has been Director of Media since March 2018. Mr Cashen will move to Mindshare following the recent departure of former Consumer Strategy Director Shane O’Leary, who has since joined Rothco | Accenture Interactive as its Strategy Director. Prior to Javelin, Mr Cashen previously worked for the Dentsu Aegis Network-owned Carat for nine years.
Higher Education Authority appoints new Chief Executive
The Higher Education Authority has announced Alan Wall, formerly the assistant secretary general of the Department of Education, as its new Chief Executive, more than a year after the resignation of Dr Graham Love from the role. Mr Wall will take over the position from Paul O’Toole, who has served as interim Chief Executive since October 2018.
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.
JDM Automotive Limited trades as Joe Duffy Group, one of Ireland’s largest new and used car dealership chains which has been trading in the country since 1972. FY18 was the 9th consecutive year of profit growth for the business as this year revenue increased by 4.1% to c. €294.0m while EBITDA increased by 3.8% to c. €11.9m. The directors noted industry headwinds which the business is currently facing as the economic effects of Brexit and the high level of VRT / tax being applied to new cars which is driving second hand British imports. Joe Duffy recorded a cash decrease of c. €1.7m for the year after c. €22.6m was spent on fixed assets and a c. €4.0m dividend was paid, while a new c. €15.0m loan was drawn down. The business opened five new facilities and acquired Motorpark Athlone during the year. Joe Duffy is predominantly owned by Gavin Hydes and had net assets of c. €33.0m at the end of FY18.
Sean Loughnane (Galway) Limited trades as Loughnane’s Family Butchers, a specialist for sausages and pudding, based just outside of Galway city. The business has recorded consistent top line growth over the last number of fiscal periods and continued the run this year as revenue increased by 20.1% to c.€40.8m while EBITDA increased by 14.4% to c. €2.4m in a great year for the business. There was a net decrease in cash of c. €191k which left an ending balance of c. €1.0m after c. €1.4m was used to pay down loans and interest while c. €872k was spent on new machinery. Founded by Ann and Sean Loughnane, the business remains in family hands and is currently being stewarded by Daire and Eoin Loughnane who now own the business between them.
Mespil Hotel Limited is a 4-star 254 room hotel set in Dublin 4 overlooking the Grand Canal. In the hotel’s most recent financial year, revenue increased by 8.1% to c. €11.6m while EBITDA increased by 7.3% to c. €4.5m at an EBITDA margin of 38.9%. The hotel employed an average of 78 people over the year at a cost of c. €3.8m. EBITDA converted to a net cash increase of c. €511k after the business spent c. €3.7m on upgrading 110 rooms and building a new entrance which had a slight knock-on effect on occupancy rates, according to the directors. At the end of FY18, the hotel had a net cash position of c. €266k against a loan balance of c. €4.1m while net assets stood at c. €23.0m.
Who: Value Asset Management PLC announces launch of equity private placement. Value Asset Management Plc is an Irish residential property developer. The company provides a universal funding solution to a select panel of development partners via its wholly owned subsidiaries in Ireland.
What: Equity private placement for gross proceeds up to £1m (€1.11m).
The private placement will be for up to 10,000,000 new shares in the company at a value of 10p each. Burlingtons Group, headquartered in London, have been formally engaged to conduct the placing which is intended to close by October 31st, 2019.
Why: The proceeds of the private placement will be used to add additional resources internally ahead of the company managing institutional capital during Q4 2019. The funding will also be used to support the role-out and distribution of the company’s new Innovative Finance ISA product to UK investors.
Source: Value Asset Management PLC
Who: Belfast-based Silform Technologies has raised funding. Silform has developed a system which changes the economics of pelletising and briqueting fues and biomass.
What: The £2m (€2.1m) funding round was led by the Bank of Ireland Kernel Capital Growth Fund (NI), there was also a significant private investment from Silform Technologies chairman, Mervyn McCall.
Why: The funds will be used to build a pilot factory in Northern Ireland for its unique process that turns coal mine waste into industrial fuel.
Source: Irish Times
Who: T.E. Laboratories (TelLab), based in Co. Carlow, is a chemical and research focused company which conducts analysis on oil, fuel and other environmental products while it also manufactures chemicals.
What: The business has raised a reported €1m from the EU.
Why: The funds will be used to commercialise Aquamonitrix, the company’s new water quality sensor product which was developed in house.
Source: The Sunday Business Post
Who: Co. Clare-based Flexibod, a producer of ‘active chairs’. Flexibod’s chairs are armed with smart sensors, which are targeted at active individuals and desk-bound workers to improve posture and reduce stiffness.
What: The business reportedly has raised funding of €300,000 from Patrick and Joseph Purcell’s family investment vehicle Kingbell. It is the second round of funding received from Kingbell after a €600,000 injection two years ago.
Why: The specific use of the funds was not disclosed.
Source: The Sunday Times
Who: Atlantic Bridge, a Dublin venture capital group has raised its fourth fund.
What: The group has raised a reported €150m from backers including ISIF and The European Investment Fund.
Why: The funds will be used to invest in early stage companies with significant growth potential, particularly in technology focused sectors.
Source: The Sunday Times
In spite of betting markets failing to call the original Brexit vote or Trump’s election we remain believers that it is one of the better guides to probabilities of outcomes of events. So instead of ‘Thought for the Week’, we are bringing you weekly tracker using odds from oddschecker and taking off bookmakers margin to come up with deemed percentage probability of outcomes.
The current markets read as follows:
Second Referendum – 7.5% chance (12/1) – no movement in the past week.
Some Sort of Brexit by Christmas – 56% chance (8/13) – This has come in from 67% last week.
A Second No Confidence Vote – 86% chance (1/14) – increasing in likelihood from 79% last week.
Odds of What the Next Step Will Be:
General Election – 42% (Even Money)
Exit Without an Agreement – 22% (14/5)
Article 51 Extended beyond October 31st – 14% (5/1)
All other next steps are sub 10% deemed probability.
A 22% probability of a hard Brexit means Sterling could yet have a long way to go in terms of devaluation, something that should worry UK-focused Irish exporters.
If you are not in agreement with any of above you can get the odds here and back your opinion: Oddschecker – Brexit
The percentage of surveyors that expect Dublin house prices to fall in the next 12 months, according to the Society of Chartered Surveyors Ireland’s latest property price survey.
@IrishTimes
The year-on-year decline in factory gate prices for the month of July, according to the CSO.
@CSOIreland
The year-on-year increase in Gross National Disposable Income for 2018 amounting to €250.9b.
@CSOIreland
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