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Renatus’ Weekly M&A Newsletter – 19/04/2020
April 19, 2020
Renatus’ Weekly M&A Newsletter – 10/05/2020
May 11, 2020
April 26, 2020

SS&C acquires Capita’s Irish life and pensions business, Arkphire acquires company in Singapore, C+G Logistics acquired by Rhenus, Stobart Air is to be acquired by Stobart Group & much more in this week's Renatus M&A Newsletter.

Renatus Private Equity Dublin, Ireland

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.

M&A ACTIVITY

SS&C acquires Capita’s Irish life and pensions business

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

Arkphire acquires company in Singaporec

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

C+G Logistics acquired by Rhenus

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

Deals in the Making

Stobart Air is to be acquired by Stobart Group

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

Deal Updates

Flutter shareholders back the merger with The Stars Group

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

IPSI acquisition has been cleared by CCPC

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

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.

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.

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 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.

RECENT FUNDRAISINGS

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

THOUGHT FOR THE WEEK

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.

@RenatusCapital Tweets

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

ABOUT RENATUS

Renatus was established in 2014 by Mark Flood and Brendan Traynor 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 of €5m and above. Our typical solutions include:
  • Succession Planning
  • Management Buyouts / Buy-Ins
  • Funding for organic growth
  • Acquisition Funding; and
  • Share Sales
Management Partners
Business Owners

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.

Visit the Knowledge Centre

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    Adrian Stackpoole, Digital Marketing Associate

    • Adrian joined Renatus in 2018, initially as a Marketing Executive before moving into the role of Digital Marketing Associate. As part of his role, Adrian manages all the digital marketing aspects of Renatus as well as conducting digital research for portfolio companies.
    • Adrian holds with a BBS degree in Marketing and Entrepreneurship from the University of Limerick, as well as a Postgraduate degree from The Digital Marketing Institute.
    • Prior to joining Renatus, Adrian worked in New York with a start-up hospitality group, specalising in marketing and operations.
    TIERNAN O’HAGAN

    Tiernan O’Hagan, Associate

    • Tiernan recently joined Renatus Capital Partners as a Private Equity Associate. As part of his role, he researches and analyses the potential of new investments and acquisitions
    • Tiernan graduated with a B.Sc in business and law from DIT Aungier street & an MSc. in Entrepreneurship from Trinity College Dublin.
    • Previously worked with Capnua Corporate Finance for three months during a summer internship.
    • Tiernan is also in the process of sitting ACCA exams.
    Bronagh Kearns Renatus

    Bronagh Kearns, Associate

      • Bronagh recently joined Renatus as a Private Equity Associate. As part of her role, she will be researching and executing investment opportunities.
      • Bronagh holds a MSc in Quantitative Finance from UCD Michael Smurfit Business School and a BSc in Finance from University College Cork. Currently, Bronagh is in the process of obtaining the ACCA qualification.
      • Prior to joining Renatus, Bronagh worked as an Investment Banking Analyst in Rubicon Capital Advisors where she worked on M&A transactions on the execution side and financial modelling in the infrastructure sector. She also worked as an Investment Associate in River and Mercantile Solutions in London quantitatively screening different investment opportunities across all asset classes.
    Alan Manning Renatus

    Alan Manning, Associate

    • Alan joined Renatus Capital Partners in September 2021 as a Private Equity Associate. As part of his role, Alan researches and analyses potential investments and acquisitions.
    • Alan holds a B.Sc Finance from University College Cork.
    • Previously working in KPMG’s Consulting division, with the Financial Management Consulting team. During his time there he was engaged on a Finance Function Review for a European Travel Technology firm, and a review of the cash management strategy of an Irish Commercial Bank.
    • In the process of sitting ACCA exams.

    Conor Hall, Associate

    • Conor joined Renatus Capital Partners in June 2018 as a Private Equity Associate. As part of his role, Conor researches and analyses potential investments and acquisitions.
    • Conor holds an M.Sc. in Quantitative Finance from UCD Michael Smurfit Graduate Business School and a B.Sc. in Economics & Finance from UCD. He is currently working towards attaining the ACCA and CFA qualifications.
    • Prior to joining Renatus, Conor worked as an Analytics Analyst with Accenture, specialising in predictive modelling for fraud.

    Kyle Barry, Associate

    • Kyle joined Renatus Capital Partners in June 2016 as a Private Equity Associate. As part of Kyle’s role, he researches and analyses the potential of new investments and acquisitions.
    • Since joining, Kyle has worked on numerous transactions, including Simtech and Rennicks, and has worked with Renatus’ investee companies on a number of strategic projects.
    • Kyle holds an MSc. in Quantitative Finance (University College Dublin) and a BA Finance (Maynooth University). Currently, Kyle is in the process of completing the ACCA qualification.
    • Prior to joining Renatus, Kyle spent 15 months in Intel’s Finance department where he worked across the financial reporting, tax and capital financing teams.

    Philip Gardiner, Associate Director

    • Philip is an Associate Director with Renatus Capital Partners, having first joined the firm as its first employee in 2014.
    • Philip has responsibility for screening, assessment and structuring of new acquisitions.
    • He has worked on a number of transactions at Renatus including Boojum Mexican Restaurants and Simtech Aviation. Philip works actively with the boards of Boojum and Simtech Aviation.
    • Prior to joining Renatus, Philip spent four years in AIB’s corporate banking team where he worked on a mix of real estate and cash flow lending deals.
    • Philip is a member of the ACCA and holds an MSc. in Financial Services and a Bachelor in Business Studies, both from the University of Limerick.

    Jane Martin, Marketing and Administration Manager

    • Jane joined Renatus Capital Partners in June 2019 as a Marketing and Administration Manager. As part of Jane’s role, she writes the weekly newsletter, works on the CRM and looks after the admin and ad hoc tasks
    • Prior to joining Renatus, Jane worked as a Senior Account Manager in Mace Promotions where she worked closely with many SMEs as well as large corporations on their marketing projects

    Mark Flood, Director

    • Mark co-founded Renatus with Brendan Traynor in 2014. Prior to establishing Renatus, Mark spent seven years on the senior management team of the Racing Post in various operational and commercial roles. Before founding Renatus, Mark was Managing Director of the Racing Post’s Irish operation.
    • Prior to his career in the Racing Post, Mark was the first employee of FL Partners, an Irish based international private equity firm, where he was actively involved in over €300m worth of transactions.
    • Mark combines his financial, operational and commercial experience to bring value and energy to all partner companies.
    • Mark is a Chartered Accountant and holds a Bachelor of Commerce and Masters in Accounting from NUI Galway.

    Brendan Traynor, Director

    • Brendan is a co-founder of Renatus. Prior to establishing Renatus, he was a Director in BDO Corporate Finance specialising in M&A, MBO’s/MBI’s, debt and private equity fundraising across a diverse range of sectors and clients.
    • His career focus and passion is the Irish SME sector and his deal expertise covers sectors such as retail, manufacturing, FMCG, healthcare, avaiation, media, medical devices, food and agriculture, construction, and hotels and leisure.
    • Brendan is a Chartered Accountant and holds a Bachelor of Commerce from University College Dublin

    Conor Mehigan, Associate Director

    • Conor joined Renatus Capital Partners in 2021 as an Associate Director. Conor has responsibility for screening, assessment and structuring of new investments and acquisitions.
    • Prior to joining Renatus, Conor spent five years in IBI Corporate Finance specialising in M&A, debt and private equity fundraising for private and public companies across a range of sectors. Prior to his career in IBI Corporate Finance, Conor spent four years in Deloitte’s Corporate Finance Division, specialising in Transaction Services
    • Conor is a Chartered Accountant and holds a BSc in Finance from University College Cork

    Greg Dilger, Strategic Advisor

    • Greg Dilger is a former Executive Director of NCB Stockbrokers and Investec Wealth & Investment.
    • He is an investor and advisor to Renatus and brings years of relevant experience to our team.
    • Greg is also currently a Non-Executive Director of Brewin Dolphin Ireland.
    Patrick Dooley Renatus

    Patrick Dooley, Associate Director

    • Patrick joined Renatus in November 2022 as an Associate Director. Patrick has responsibility for screening, assessment and structuring of new investments and acquisitions.
    • Patrick previously held leading positions in Focus Capital Partners, PKF O’​Connor, Leddy & Holmes & EY.
    • Patrick is a charted accountant and holds a Bachelor of Accounting and Finance degree from DCU, along with a Masters degree in Accounting from TUD.

    John Dwyer, Chairman

    • John joined Renatus in 2018 as a Chairman. Prior to Renatus, John spent 30 years at PwC in the UK, 20 years as a Partner, John led the UK and Global Deals business at PwC and was an executive board member of the UK firm.
    • Prior to that, John led the UK and Global Private Equity business at PwC and worked with firms including 3i Group, Apax Partners, CVC Capital Partners and Cinven.
    • John is married to Natasha and they have three children. John works between Dublin and London and his charity work includes chairmanship of Irish Youth Foundation UK.
    • He is an advisor and Board member of Irish digital marketing firm Pigsback and media firm Racing Post.
    • John is a Chartered Accountant and holds a Bachelor of Commerce from UCD.