Renatus’ Weekly M&A Newsletter – 19/02/2023
February 20, 2023Renatus’ Weekly M&A Newsletter – 05/03/2023
March 5, 2023
Renatus Weekly M&A & Company Performance Private Equity Newsletter 26/02/2023
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
SAVE THE DATE – THE REAL DEAL 2023
We are thrilled to announce The Real Deal conference is back, taking place on Wednesday, May 3rd, 2023 at Goffs, Co. Kildare.
Building on the success of previous events, The Real Deal is designed to bring together industry leaders, entrepreneurs, and professionals to network, share insights, and explore emerging opportunities.
The Real Deal will feature a diverse range of expert speakers and engaging panel discussions covering a wide range of topics. In addition to the informative and educational sessions, there will be plenty of opportunities for networking and collaboration.
Whether you are a seasoned entrepreneur, emerging entrepreneur, or just love business, The Real Deal is an ideal platform to gain new knowledge, inspiration from those who have done it, make valuable connections, and discover new opportunities to advance your career and grow your business.
We look forward to announcing further details in the coming weeks.
THOUGHT FOR THE WEEK
One of the most talked about stories this week has been the shortage of fresh vegetable produce coming from Europe into the UK & Ireland. Major supermarket chains such as Tesco and Aldi have announced that they are limiting sales to three per customer for tomatoes, peppers and cucumbers.
Much of the UK press coverage has blamed the shortage on rising energy costs for producers combined with the effects of climate change, evidenced by unusually poor weather in Spain and North Africa throughout the winter. While these factors have undoubtedly caused major disruption, it is clear that Brexit and the lack of intensive energy support from Westminster have not helped the situation either.
The added bureaucracy and costs associated with Brexit have meant that it is simply easier and more cost-efficient for suppliers to prioritise sales to countries in mainland Europe when stocks are limited. Furthermore, a much reduced supply of labour post-Brexit has constrained production across all streams of agriculture. With border controls for fresh produce entering the UK also set to come into place on the 1st of January 2024, empty supermarket shelves could potentially become a more common occurrence going forward.
Disruption is not limited to just vegetable produce either with UK Agriculture facing challenges across the board. No slick replacement has been found for the Common Agricultural Policy and a production fall-off is already underway with the number of eggs produced in the UK now at a 9 year low. On top of this, beef farmers are up in arms at the prospect of a UK-Mexico deal allowing cheaper, less regulated beef to enter the market and compete with local produce.
M&A Activity
Integral Finance & Technology acquired by GS Verde
Deal Details: Integral Finance & Technology (“IFT”) has been acquired by GS Verde for an undisclosed amount.
IFT is a Dublin-based business that provides finance and accounting solutions to clients via technology and software-enabled systems and platforms. The business was founded by John Slevin and Sinead Leech in 1997. It provides services including management reporting, financial controls, and project finance. The business does not report turnover or EBITDA information.
GS Verde is a Cardiff-based multi-discipline corporate advisory business that is majority owned by CEO Nigel Greenaway. The business does not report turnover or EBITDA information.
Advisers: None mentioned.
Renatus Comment: The professional services industry has been accused of being slow to adopt and incorporate technological advancements into its various service offerings. This trend has changed in recent years with more companies in the space recognising the value of technology-driven solutions offered by firms like IFT. Software and automated systems significantly reduce the workload on existing employees as well as the overall cost to firms that offer advisory services, increasing their competitiveness. There has been a lot of focus on ‘lean manufacturing’ over the years but there are probably more wins to be gained by companies that implement this type of ‘lean administration’.
Source: GS Verde Group Press Release
Kendlebell master franchise acquired by Paul Brady
Deal Details: The master franchise of Kendlebell has been acquired by Paul Brady.
Kendlebell is a provider of outsourced customer contact solutions for the SME sector in Ireland. The business was previously owned by Tom Shanahan. It does not report turnover or EBITDA information.
Paul Brady is an experienced IT professional who has previously held senior roles at the Construction Industry Federation (“CIF”), AIB and Vodafone.
Advisers:
Paul Brady:
Corporate Finance: Montanum Advisory led by Jim Mulqueen and Fiona McGuire.
Legal: Sherwin O’Riordan led by James Sherwin.
Kendlebell:
Corporate Finance: Hornblower Business Brokers led by Julian Caplin.
Legal: Newman Doyle led by Mark Newman.
Renatus Comment: SME owners have to juggle many roles in the day-to-day running of their businesses. Companies like Kendlebell, which offer efficient outsourcing solutions for call-answering, telemarketing and back-office operations, can provide a great return on investment to entrepreneurs by allowing them greater time to focus on their core operations.
Paul Brady is a successful franchise owner and IT specialist and will oversee the launch of a new service, Outsourcing IT Support Ticketing Calls, as part of his plans for Kendlebell.
Source: Montanum Advisory
Cordovan Capital acquires CEMA Lighting
Deal Details: Cordovan Capital has acquired CEMA Lighting for an undisclosed sum.
Cordovan Capital is a Belfast-based private equity fund founded in 2011 by Mike Irvine. The fund focuses on buyouts and growth investments in firms with an Enterprise Value of less than £10m. This marks Cordovan Capital’s fifth investment from its institutional fund, and its sixteenth investment in total.
CEMA Lighting is a UK-based business that specialises in the distribution and installation of commercial LED lighting products. The business does not report turnover or EBITDA information.
Advisers:
Cordovan Capital:
Legal: DWF led by Scott Kennedy and James Morrison.
CEMA Lighting:
None mentioned.
Renatus Comment: CEMA Lighting calculates the CO2 emissions of a customer’s current lighting system and facilitates a switch to more sustainable options. The business should benefit from major secular tailwinds surrounding an increased focus on carbon footprint reduction and sustainability. In light of elevated energy prices in recent months, industrial and commercial energy users are also likely to continue to place emphasis on sourcing the most efficient lighting products.
Source: Cordovan Capital Press Release
The Project Point Technologies acquires all of Iceland’s supermarket stores in the Republic of Ireland
Deal Details: The Project Point Technologies has acquired all of Iceland’s stores in the Republic of Ireland.
The Project Point Technologies is a company owned by Naeem Maniar. It does not report turnover or EBITDA information.
Iceland is a UK-based supermarket chain that specialises in frozen foods, including prepared meals and vegetables. It operates 27 stores in the Republic of Ireland. The group is majority owned by founder Malcolm Walker and CEO Tarsem Dhaliwal. Iceland Foods Limited reported FY Mar 22 revenue of £3.6bn which converted to EBITDA of £90.1m.
Advisers: None mentioned.
Renatus Comment: Naeem Maniar is very familiar with the Iceland brand, having operated the company’s franchise in Ireland from 2008 to 2013, prior to Iceland taking direct control of its stores. Naeem will continue to operate the stores on a franchise basis, allowing each individual store greater flexibility to adapt to customer preferences and supply shocks at the local level. This transaction will also allow Iceland to focus on its core retail market in the UK while reducing its operational overheads in Ireland.
Source: Business Post
C&B Agri Enterprise Ltd. to sell minority stake to Mitsui & Co. Ltd.
Deal Details: C&B Agri Enterprise Ltd. (“C-BIO”) has agreed to sell a minority stake to Mitsui & Co. Limited for an undisclosed sum.
C-BIO is a producer and distributor of biostimulant products made from natural seaweed and marine-derived amino-acid material. It is owned by Charles Vial and Barry Doherty. It does not report turnover or EBITDA information.
Mitsui & Co. Ltd. is a global trading and investment company with a business portfolio that spans 63 countries. It is listed on the Tokyo Stock Exchange.
Advisers:
C-BIO:
Legal: Wallace Corporate Counsel LLP led by Michael Bambrick, Fran Keogh and Amy Murphy.
Mitsui & Co:
None mentioned.
Renatus Comment: Based in Donegal, C-BIO offers niche sustainable stimulant and fertiliser products that have various applications in agriculture/ horticulture. It is a great example of a company utilising Ireland’s natural resources along the Atlantic coast to create an internationally-viable business. By partnering with Japan-based Mitsui, the company will be able to leverage a large global network to reach new markets.
Source: C-BIO Press Release
COMPANY PERFORMANCE
First Glass Limited is a Dublin-based glass processor and wholesaler. The business commenced operating as a pure glass merchant in 1999 and it now services 32 counties in Ireland. First Glass Limited is majority owned by John Sweeney and Ian Mac William.
In its financial year to April 2022, the business generated a turnover of c. €11.3m, an increase of 37.4% year-on-year. This converted to an EBITDA of c. €1.2m, an increase of 19.1% year-on-year.
The business finished the year with a cash deficit of €0.1m. Significant post-EBITDA cash movements included a c. €0.3m investment in working capital, loan repayments and c. €500k in fixed asset purchases.
The business employed an average of 62 people in FY22 at a total cost of c. €3.0m.
Killyhevlin Hotel Limited, is the operating company of the 4-star Killyhevlin Hotel, outside Enniskillen in Co. Fermanagh. It is owned by Jacqueline Wright and Heather Leigh Watson.
In its financial year to September 2022 the business generated a turnover of c. £7.7m, an increase of 79.0% year-on-year. This converted to c. £1.7m EBITDA, an increase from c. £50k in FY Sep 21. The increase in EBITDA was primarily driven by increased revenues, improved operating margin and an adjustment for Covid-related subsidies as the hospitality sector rebounded from disruption caused by Covid.
The business finished the year with a cash balance of c. £2.3m, a c. £0.9m increase on FY Sep 21. Significant post-EBITDA cash movements included cash released from working capital, the repayment of Covid support loans and dividends paid.
The business employed an average of 154 people during the period at a total cost of c. £2.8m.
RECENT FUNDRAISINGS
Who: Corre Energy, a developer of long duration energy storage projects, publicly listed on the Dublin stock exchange.
What: The company has raised €8.9m through a new share issue along with €4m from infrastructure investment fund Fondo Italiano per L’Efficienza Energetica.
Why: The funding will be used to finance projects including a Dutch compressed air energy storage project and a Green Hydrogen Hub in Denmark.
Source: The Independent
Who: Siren, a Galway-based cybersecurity firm spun-out of NUIG by Giovanni Tummarello and Renaud Delbru. It was one of the 2022 Deloitte Fast 50 finalists.
What: The business has raised €12m in funding from the European Investment Bank.
Why: The company will use the funds to continue to develop its platform and to grow its workforce by 50%.
Source: Business Post
Who: Bord na Móna, an Irish company operating four business units – Powergen Development, Resource Recovery, Energy and New Business.
What: The business has raised €430m in banking facilities from Bank of Ireland, BNP Paribas and ING.
Why: The funding will be used to develop wind and solar projects.
Source: Irish Examiner
Who: Farra Marine, a Dublin-based company that operates crew transport vessels for the off-shore wind industry.
What: The business has raised €5m in funding through the Employment Investment Incentive Scheme (EIIS).
Why: The funding will be used to finance deposits on seven new vessels, which will double the company’s fleet.
Source: Business Post
EXECUTIVE AND BOARD APPOINTMENTS
We in Renatus believe that more important than the deals are the people and we are pleased to provide you with details of key recent executive and board-level appointments.
@RenatusCapital Tweets
2.5%
The month-on-month increase in the Irish Credit Union consumer sentiment index from January to February, according to @creditunionie
17.4%
The monthly increase in total housing starts in Ireland from December to January, according to @DeptHousingIRL
4%
The rise in the price of commercial construction project tenders in H2 2022, down from 7% in H1, according to @SCSISurveyors
2.574 million
The amount of people employed in Ireland in Q4 2022- a new record, according to @CSOIreland
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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.
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