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: SS&C Technologies Holdings, Inc. announced it has entered into an agreement to acquire Capita Life & Pensions Services (Ireland) Limited (CLPSI) for an undisclosed sum.
CLPSI, previously owned by Capita plc, is a well-established services and technology provider based in Dublin. It employs 380 people in its offices in Dublin, Belfast and Craigforth in Scotland.
Connecticut-headquartered SS&C employs over 22,000 people in 35 countries and its services are used by over 18,000 companies.
The acquisition, which is subject to customary closing conditions and regulatory approvals, is expected to close in Q2 2020.
Advisers: None mentioned
Renatus Comment: The financial services sector continues to be busy with M&A transactions with this latest acquisition. Over the past 12 months we have seen the likes of Acumen & Trust, APT, Arachas, and many others, all completing transactions and it will be interesting to see if this will continue for the next year or if we will see a slowdown in the space due to the current Covid-19 crisis. It is likely that pension funds have taken a hit over the past couple of months with the sharp losses on global stock markets since the start of the year so the attractiveness of the sector may wear off, conversely, it may provide opportunities.
In Capita’s Life and Pensions Services (Ireland) latest accounts – December 2018 – the company reported revenue of c. €31.2m with a pre-tax profit of c. €2.0m. According to the company’s website, they currently have c. £23bn of assets under management.
Source: SS&C Press Release
Deal Details: Arkphire, an Irish IT company, has acquired Generic Technologies, a Singapore-based authorised Apple reseller for an undisclosed sum.
Generic Technologies was founded in 1992 and Arkphire is investing €3.25m into Generic as part of the transaction and Generic will be rebranded into Arkphire Singapore. This acquisition furthers Arkphire’s expansion into Singapore, which took its first step into the coutnry during 2019. Generic Technologies has an annual turnover of just under €6m and already has an established base of customers from which to grow.
Advisers: None mentioned
Renatus Comment: Arkphire, which is led by CEO Paschal Naylor, chaired by Paul Nannetti and backed by private equity firm Bregal Milestone, has been using strategic acquisitions as part of its growth strategy for a number of years now. Arkphire is undoubtedly one of the fastest growing companies in Ireland. In FY16, Arkphire posted revenues of of just over €50m and it is expecting to generate revenues of c. €150m in FY20.
Source: Sunday Times
Deal Details: C+G Logistics, a Dublin-based warehousing and haulage company that specialises in handling chemicals, pharma products, ingredients and raw materials, has been acquired by Rhenus, a multinational transport group. Consideration for the deal was not disclosed. C+G was founded in 1978 and has a fleet of about 15 trucks.
Rhenus is a German-headquartered transportation group that employs over 33,000 and generates turnover of c. €5.5bn per annum.
Advisers: C+G Logistics were advised by John Bowe and Andrew Moran from Mazars Corporate Finance.
Renatus Comment: Rhenus is already an established player in the Irish market having been operating here for over 30 years. In 2018 Rhenus acquired Avant Air and Sea and subsequently rebranded it to Rhenus Air & Ocean. The C + G acquisition will add to Rhenus’ service capabilities in the Irish market. Prior to this transaction, C+G Logistics was owned by David and Jacqueline Dixon and the business made a reported net profit of c. €420k in FY 18 period.
Source: Fleet.ie
Further to last week’s whispers it is now reported that the UK’s Stobart Group has reached a deal to acquire 49% of Stobart Air from the administrator for between £300,000 and £400,000 (€343,000 and €457,000).
Before the crisis, Stobart Air had a fleet of about 19 aircraft servicing 40 routes with more than 1,000 flights per week.
Source: Independent
The investors in Paddy Power owner Flutter Entertainment have voted more than 99% in favour of five resolutions needed for the deal to go through.
Flutter announced details of the merger with Canadian-based Stars, owner of Skybet and Full Tilt Poker last year.
Source: Irish Times
The proposed acquisition of sole control of Irish Progressive Services International Limited by Kiwi Holdco (the parent company of the FNZ Group) has been cleared by the Competition and Consumer Protection Commission.
FNZ, the global platform-as-a-service provider, agreed to acquire Irish Progressive Services International (IPSI) from Irish Life for an undisclosed sum in February 2020.
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 with details of key recent executive and board level appointments.
Fortus appoints new Chief Financial Officer
Mark Brophy has been appointed as Chief Financial Officer at Fortus. Most recently, Brophy was a Corporate Finance Director at AIB and prior to that he was a Corporate Finance Director at Mazars.
Herbert Smith Freehills appoints new Partner
Global law firm Herbert Smith Freehills has promoted Belfast office head Lisa McLaughlin to partner. Ms McLaughlin heads the firm’s dedicated Alternative Legal Services office and has overseen its expansion. Ms McLaughlin is one of 26 new partners appointed from May. She is the second partner appointed in the firm’s ALT practice, following the first such promotion in 2017.
Shannon Group appoints new Board Director
Mike Quinn has joined the board of Shannon Group for a three-year term. He is CEO of UK-based alloy components manufacturer Doncasters Group. He is former CEO of Ervia and Bord Na Mona and was chief operations officer of renewables company WElink Energy. He has been group vice president of Precision Castparts airframe segment, a US Aerospace manufacturing company, and has held senior roles in Tellabs, Stryker and Lufthansa Technik Turbine Shannon.
ROBUS appoint Mick Slein as Group CEO
ROBUS, one of the leading lighting brands in Ireland, UK, Europe, Australia and New Zealand announced Mick Slein as its new CEO. During the past 4 years as Commercial Director Mr Slein was responsible for the overall management of New Product Development, RD&I, Quality & Technical, Irish Sales division, UK Sales division and the European Sales division. Mick’s father, Michael Slein Snr has moved into the role of Chairman.
Deloitte appoints new Partner
Deloitte Ireland has appointed Ronan Ferry as partner and head of tax management consulting. Mr Ferry previously worked at PwC for 13 years, most recently as head of tax strategy and technology in Dublin. While at PwC Mr Ferry spent four years in the US working at the firm’s San Francisco and San Jose offices.
Aldi Ireland & UK appoints new Managing Director
Niall O’Connor has been appointed managing director at Aldi Ireland and UK. Mr O’Connor joined Aldi 20 years ago and has worked in Operations and Buying on behalf of the firm. In his earlier career, Mr O’Connor worked for Marks & Spencer and Avoca.
Virgin Media Ireland appoints two senior executives
Virgin Media Ireland has appointed Gavin Murphy and Emer Kelly to its leadership team. Ms Kelly is taking up the position of head of business sales while Mr Murphy has been appointed as head of operations.
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.
Tinnelly Construction Limited is a building contractor based in Co. Down which offers services from new-build housing, large and small extensions, private, industrial and commercial works. In FY19, the company had a positive year which saw revenue increase by 38.9% to c. £11.3m while EBITDA increased by 63.4% to c. £1.7m. The company employed an average of 27 employees in its latest fiscal year, up from 24 the previous year, at a cost of c. £1.0m. There was a net cash decrease during the year of c. £795k after significant working capital movements removed c. £2.1m as well as corporation tax of c. £100k was paid. The company spent c. £365k on Capex while receiving c. £100k for the disposal of fixed assets as well as paid a dividend of c. £39k during the year. Cash on the balance sheet stood at c. £430k against a debt balance of c. £245k. Net assets increase for the year by 40.8% to c. £3.8m. The company is 100% owned by Kathleen Tinnelly.
| EOS IT Solutions specialise in the installation, maintenance and sale of video conferencing systems with additional services such as IT and physical supply chain management. The business’ HQ is in Banbridge, Co. Down but it provides services in 175 countries without subcontracting. In their financial year to June 2019, revenue increased Y-o-Y by 23.7% to £30.8m while EBITDA increased by 48.9% to c. £6.0m. EBITDA converted to a net cash decrease of c. £2.7m after an £8.0m dividend was paid to shareholders. At the end of the year there was c. £571k of cash on the balance sheet against no long term debt. During 2019, the business employed 130 people at a cost of c. £3.4m. EOS IT Solutions is owned by Strain family members Daniel, Tanya, Brendan, John, Adrian, Ruth and Elaine. |
Who: Profitero, a Dublin-based analytics company, has closed a funding round.
What: $20m (€18.5m) series B investment round was led by San Antonio-based Scaleworks with participation from Conviction Capital.
Why: Profitero said the funds would be used to “fuel its next stage of growth”.
Source: Irish Times
Who: Tullow Oil raises funds via stake sale.
What: The company gets $575m (€531.6m) for its entire stake in the onshore oilfields it shares with Total in Uganda.
Why: Sale to Total is part of Tullow Oil’s target to raise $1bn (€0.93bn) this year to tackle its $2.8bn (€2.59bn) debt pile.
Source: Irish Times
Who: Belfast life science software company Overwatch, founded by Dr. Chris Armstrong and Paul and Graham Wilsdon, secures funding.
What: The investment was led by Techstart Ventures and other private investors in the Halo Business Angel Network. The amount raised was not disclosed.
Why: The funding will enable it to develop relationships with current customers and establish new professional partnerships within the pharmaceutical and contract research industries.
Source: Belfast Telegraph
There are two burning issues for SMEs at the moment that need to be highlighted.
Firstly, the challenge for the majority of SMEs in this twilight zone between now and a vaccine is how can we all turn back on full cost bases if revenue is constrained by a half or three-quarter speed economy. The majority of businesses make teens or single digit % net margins so even if businesses retain a large part of their pre-corona volumes unless they can reduce fixed costs, which many cannot, it doesn’t work for those affected.
Michael O’Leary summarises this in his interview in FT during the week
“We can’t make money on 66 per cent load factors.”
The other thing concerning Irish SMEs is the news that would have been headline news pre corona but last week was just a snippet of where Micheal Barnier sent a warning shot to Westminster regarding Brexit. Britain had “refused to engage seriously on a number of fundamental issues”, Mr Barnier said. “I regret it, and this worries me.” If Johnson and co deploy the same ‘delay and pray’ and ‘extend and pretend’ tactics as they did for Corona virus the brexit break up could get messy. Unlike corona where we in Ireland seem to be no worse than the rest of the EU, we would be worst affected by a messy Brexit.
It has not gone away and let’s hope Johnson and co engage like adults and work out a smooth Brexit transition.
21.82%
The number of Irish residents partially or fully dependent on the State for income support accounting for 1,077,200 people on the live register and on Covid-19 related payments, according to the Department of Employment Affairs and Social Protection. @RTEbusiness
6%
The year-on-year decrease in the price of agricultural land for 2019 when the national average price for an acre of land stood at €8,823, according to the Society of Chartered Surveyors and Teagasc. @RTEbusiness
6.4%
The year-on-year increase in the rents across Ireland for Q4 2019 – the lowest increase in 6 years, with the average nationwide rents at €1,226 per month and €1,716 per month in Dublin, according to RTB. @RTEbusiness
4.2%
The year-on-year decrease in the Irish factory gate prices for March 2020, according to @CSOIreland
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