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.
The Growth Capital Summit 2019 is now just a few days away, taking place this coming Thursday May 30th at the Clayton Hotel, Burlington Road. We will be speaking about the value that equity investment can bring to a growing business – from the peace of mind a business owner can get from selling a stake in their company to the value a strategic partner can bring in maximising the potential of a business.
It’s sure to be a great event with an array of excellent speakers in the line up. Event details and tickets are still available here: https://capitalsummit.ie/
Deal Details: Egeria, an Amsterdam based investment company, has acquired a majority interest in the Irish headquartered MAAS Aviation Group. MAAS Aviation is one of the leading commercial aircraft painting companies in the world with operations in The Netherlands, Germany and the USA. The company’s executive management team has retained a minority interest in the company.
Founding shareholder and Executive Chairman, Darragh Hall, who owns 76% of the group through its ultimate holding company, Devonton, exits MAAS Aviation after almost 40 years with the company. The financial details of the transaction have not been disclosed, but the Dutch company normally backs businesses worth €50m-€350m. Maas Aviation had net assets of €2.8m at the end of FY17.
Advisers: KPMG Dublin provided corporate finance on the transaction to the company and its shareholders. Smith Williamson acted as special advisor to the majority shareholder.
Renatus Comment:
This is a great story where Darragh Hall started day one and grew this to be a leading international player. It benefited from the shift from airlines to outsource non-core functions such as painting and is a great success story.
Deal Details: UDG Healthcare plc, a leading international healthcare services provider, has announced two acquisitions in its Ashfield Communications and Advisory business. Putnam Associates, a US-based strategic management healthcare consultancy, is being acquired for a total consideration of c. $88.6m (€68m), and Incisive Health, a UK-based healthcare policy and communications consultancy, is being acquired for a total consideration of c. £13.6m ($17.7m).
Both transactions will be financed from existing cash and debt facilities and are expected to deliver a return on capital employed in excess of the Group’s target of 15% within three years.
Advisers: None mentioned.
Renatus Comment:
What started out as a collection of pharmacists in Ballina in 1948 has now become a diversified giant in the healthcare space. A flag-bearer for how inorganic growth can transform a business, UDG identified a change of strategy in the late 90s / early noughties to move from demand fulfillment to demand creation and has had the ambition to back it up with a string of acquisitions over two decades. They moved to support their distribution business with packaging, contract sales, event management and communications bolt-ons over too many acquisitions to name. The latest acquisitions show management’s continued intent and that this strategy is likely far from finished.
Deal Details: Evoke, a subsidiary of Huntsworth plc, has acquired the speciality health communications agency Kyne. It is believed 85% of Kyne has been sold by its founders, David and Jacqueline Kyne, whom founded the business in 2009, together with associates in the company. The group, which also provides patient advocate services, will now work in Huntsworth’s marketing division and will continue to be led by Mr Kyne. The business operates from offices in New York, LA, Dublin and London. In 2018, the Dublin company generated revenues of $10.2m and an operating profit of $1.3m. It had gross assets of $3.5m.
Along with the initial $17.4m (€15.6m), the Kyne owners will receive a net asset adjustment after completion of the deal and deferred consideration in 2021 based on a multiple of earnings for the two years ended December 31st.
Advisers: None mentioned.
Renatus Comment: There seems to be more professional services firms finding exits which is great to see as the challenge is often getting paid for Goodwill independent of the founder.
Deal Details: Arrotek Medical, a Sligo medical device designer and manufacturer, has been acquired by US company Galt Medical, a subsidiary of Theragenics. Texas-based Galt Medical specialises in vascular and interventional medical devices with additional facilities in Costa Rica. No financial consideration has been disclosed.
The company was co-founded in 2005 by Mark Pugh and Ger O’Carroll, who will continue to run the Sligo operation as MDs. The new ownership will bolster market activity in Europe, North America and other markets.
According to Arrotek’s latest accounts, for the year ended December 2017, the company had pre-tax profits of €1.2m. It listed 22 employees on its books
Deal Details: Amryt Pharma has agreed to acquire Aegerion Pharmaceuticals, a subsidiary of Novelion Therapeutics. The all paper deal implies a value of $190.7m (€171m) for Aegerion and a value of $120m (€107m) for Amryt, a Dublin-headquartered group focused on the treatment of rare conditions. Amryt plans to raise c. $60m in equity concurrent with the closing of the deal. New loan facilities for the combined group will be put in place, and the key terms of such facilities have been agreed. The combined group’s global headquarters will be in Dublin, with its US headquarters in Boston, Massachusetts.
Advisers: MTS Securities, LLC is serving as financial advisor and Gibson, Dunn & Crutcher LLP is serving as legal advisor to Amryt in this transaction. Shore Capital is acting as financial advisor, NOMAD and Joint Broker to Amryt. Stifel Nicolaus Europe Ltd are Joint Broker to Amryt. Davy is acting as Euronext Growth Advisor and Joint Broker to Amryt. Moelis & Co LLC is serving as financial advisor to Aegerion.
Renatus Comment: The combined group had pro-forma revenues of $136.5m (€122m) in respect of 2018.
Source: Amryt
Deal Details: APCOA (Ireland) Limited has announced that it intends to acquire the business of NCPS in Ireland, one of country’s largest car park operators. As part of a different but related transaction, APCOA will also acquire Mobile Research Solutions, t/a parkbytext.
The acquisition would combine two of the country’s biggest car park operators and as such is subject to approval by the CCPC. NCPS reported EBITDA of c.€1.0m for FY17 and employed 123 people. With the financial backing of the APCOA group, management believe that the combined operation in Ireland would benefit from increased opportunities for further investment in the business and technology.
Source: NCPS
Deal Details: Independent Express Cargo, a Dublin-based provider of freight, transport and logistics services is to be taken over in a €6.6m deal. The purchaser is Duke Capital, a private equity investor, who is reported to be making further investments into the company and sector after this transaction closes.
Independent Express Cargo, which was founded by Owen Cooke, had revenue of c. €15.1m and EBITDA of c. €500k at the end of FY17. Mr. Cooke is reported to be staying with the business post-transaction.
Source: The Sunday Times
Deal Details: Cardinal Capital are set to close a new €500m residential development fund in Ireland. While the total fund size has yet to be confirmed, the fund will focus on property investments with a particular focus on residential development.
This will be Cardinal Capital’s second property fund in Ireland after its first fund WLR Cardinal Mezzanine Fund created a reported €500m in loans. The combined property funds could reportedly lead to c. €1bn of loan origination in Ireland’s property market.
Source: The Sunday Times
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
Greencore promotes Peter Haden to COO
Greencore has promoted Peter Haden to the role of chief operating officer along with a seat on the board as executive director as the Ireland-based private-label manufacturer focuses operations on its core UK convenience foods business. Mr Haden joined the firm in 2015 as chief development officer before becoming CEO of the UK division last year, when Greencore disposed of its US business and exited the cakes and desserts category in the UK.
AMI appoints Faye Thomas as Chief Commercial Officer
AMI, the secure IT recycling company, has appointed Faye Thomas as CCO). Prior to this appointment, Ms Thomas held the position of business manager for three years, and previously key account manager for 18 months, at AMI. Previous to her time at AMI, Ms Thomas spent three years as senior account manager for cloud-based services provider Capita Managed IT Solutions
FAI appoints Noel Mooney as Interim CEO
The Football Association of Ireland (FAI) has appointed Noel Mooney as interim chief executive on a six month contract. Mr Mooney, who previously worked at the FAI as a marketing executive before moving to Uefa to assume the role of head of national association business development, will be on secondment from European soccer’s governing body.
Core Appoints Liam Wielopolski as Executive Creative Director
Core, the marketing communications company, has appointed Liam Wielopolski as Executive Creative Director. Mr Wielopolski, who will join the group in September, joins from DDB in Johannesburg where he was Chief Creative Officer since 2013. Prior to this, he led Y&R Johannesburg and has also worked at Saatchi & Saatchi as Regional Executive Creative Director in Johannesburg.
OSM Partners appoints two new Partners
OSM Partners has announced the appointment of Andrew Croughan as partner and head of personal insolvency, and Raymond Lambe as partner in the firm’s corporate and commercial litigation department. Mr Croughan has over 10 years’ experience in the area of commercial litigation, dispute resolution and insolvency and has acted in cases before all courts including the Supreme Court and Court of Appeal. Mr Lambe’s clients include financial institutions, companies, insolvency practitioners and a private sector participant in the expanded mortgage to rent scheme.
PPD Recycling appoints new Chief Commercial Officer & Chief Executive Officer
PPD Recycling has appointed Austin Ryan at Chief Commercial Officer. Mr Ryan is a former executive director at AMCS Group where he worked for over 16 years. His earlier career was at Ericsson where he worked as a Software Engineer. Mr Ryan will work alongside Paudy O’Brien who has assumed the role of CEO at PPD. Mr O’Brien is a former senior executive at Shannon Power Management.
RSM appoints new Partner
RSM Group has appointed Damien Murran as Partner. Mr Murran joins from EY where he worked for over 5 years. He worked at Grant Thornton for 8 years during which time he qualified as a Chartered Accountant.
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.
Based in Baltinglass, with branches in Naas, Athy, Avoca, Milford, Geashill, Edenderry and Lewsitown, Quinns of Baltinglass is an agricultural merchant that serves farmers that has been in operation for over 80 years and won the 2018 “Agricultural Merchant of the Year” title at the Agri-Business Awards. FY18 was a good year for the company which saw turnover grow by c. 3% to c. €104m and EBITDA increase by c. 17% to €5.2m. During the year, the company spent c. €1.7m on fixed assets, the majority of which went into land and buildings as well as plant and machinery while they also spent c. €1.5m on investments classified as “Other unlisted investments”. The company has c. €2.5m in finance lease obligations and c. €8.2m cash on its balance sheet. The company is owned by Liam and Kathleen Quinn.
Established in 1963, Component Distributors Group is based in Antrim with supporting operations in Dublin and Cork. The company specialises in the sale and distribution of automotive products supplying motor factors, bodyshops and fast fit centres. Despite an 8.4% increase in turnover during FY18, EBITDA declined by 16.6% to c. £1.3m primarily driven by gross margin deterioration and an increase in administrative expenses. The company generates c. 59% of its sales in Ireland with the balance coming from the UK. c. £230k was spent on CapEx during the period while c. £550k was spent on debt and interest payments. The company has £4.6m of a bank overdraft facility and has c. £290k in hire purchase and finance lease obligations against a cash balance of £73k. The company is owned by Tery (51%), Iain (27%) and Heather (22%) Knox.
Tyrone-based Westland Horticulture Limited trades as Westland. The company supplies a range of gardening, pet care and environmental products to the retail market across Europe. For their most recent financial year, Westland saw revenue grow by 1.5% to c. £132.4m while EBITDA increased by 7.5% to c. £10.2m. The company can credit cost control as the primary reason for the EBITDA expansion as they saw a slight increase in gross margins, supported by decreases in distribution and administrative costs. There was a net cash increase over the year of c. £5.3m to leave an ending balance of c. £19.3m. The most significant cash expenditures during the year were a bank loan repayment of c.£3.9m as well as purchases of fixed assets amounting to c. £2.8m. Westland’s net assets stood at c. £42.0m at the end of the financial year.
Civil engineering contractors Ward & Burke specialise in bespoke design and construction of water and wastewater infrastructure. Headquarted in Co. Galway, the company also has offices in Cork, the UK, Canada and the US. In recently filed accounts, the company saw revenue increase by 18.8% to c. €228.1m and EBITDA rise by 16.3% to c. €19.0m. A global contractor, revenues were split across the Republic (30.8%), the UK (29.8%) and the rest of the world (39.4%). The company was able to convert the c. €19.0m EBITDA to a c. €2.6m increase in cash for the year to leave an ending balance of c. €7.4m. The biggest drain on cash was c. €5.7m spent on fixed assets, working capital movements and c.€4.1m paid toward debt financing. Ward & Burke is equally owned by Michael Ward, Robert Ward and Padraig Burke.
Who: Fountain Healthcare has announced the initial closing of their third fund. Founded in 2008, Fountain is Ireland’s largest dedicated life science venture capital fund with more than €294m under management.
What: Fountain Healthcare secured €118m of committed capital, exceeding its initial target raise of €100m.
Investors in Fund III include the European Investment Fund (EIF); Coolidge Ltd, an investment vehicle of Mr Dermot Desmond; the Ireland Strategic Investment Fund (ISIF) and Allied Irish Bank (AIB).
Why: Fountain will invest a majority of the capital in Fund III within Europe but expects to also make investments in the US market. Fund III is expected to make 10 to 12 investments in predominantly private life science companies.
Source: Fountain
Who: Dublin-based supply chain solutions provider Overhaul has secured funding.
What: The business secured $7m (€6.2m) in funding, backed by what it said is a “strategic food industry investor”.
Why: Overhaul, established by Barry Conlon in 2015, stated they will use the funds to support continued large-scale growth with high-calibre shippers, as well as investing in its supply chain technology.
Source: Irish Independent
Who: Induction Healthcare, a British company focused on creating communication software for the healthcare industry. Their existing app allows for contact between healthcare professionals and access to hospital information.
What: The company listed on London’s AIM market this past week. Notable backers include Dermot Desmond who took a 14.7% stake in the business as part of the listing.
Why: Induction Healthcare are reportedly on the look out for acquisitions in the space as they continue to grow.
Source: The Sunday Times
This week’s thought is linking out to PWC’s Ronan Furlong’s piece in conjunction with the DCU National Centre for family business and the Family Business Network about how our tax system needs to change to be much more fair to SMEs and family businesses. Everybody needs to shout louder about these issues until politicians think that votes are on the line in future elections over their support of business. Until that is done, change is unlikely.
It is well worth a read and covers self-employed PRSI, employee incentive schemes, entrepreneurs relief, EIS scheme and more.
Read more here: Ireland’s tax system needs to support entrepreneurs and family businesses
75
The number of Irish companies that received start up or follow on funding for the first three months of the year, compared to 43 in the same quarter last year, with overall funding value down 41% year-on-year, due to mega deals in 2018. According to @IVCA_ie. @Fora_ie
3.7%
The year-on-year increase of employment in the year to March 2019, representing 81,200 new jobs (both full-time and part-time), while bringing total employment to 2,301,900. @CSOIreland
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