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.
Sé Pardy, one of our partners in Simtech, is organising a very interesting and worthwhile fundraiser on Saturday August 15th at 3pm.
Stephen Kavanagh and Jim Gavin will be sharing their experiences in business, life and sport. All the proceeds from the event go to the annual Irish Aviation Fundraiser for the St. Vincent de Paul Society which to date has raised over €186,000 since it began.
There is a great community spirit in Aviation in Ireland and it is great to see them come together for those in need at this challenging time for all.
To buy a slot for this fundraiser, click here:
Eventbrite – An Audience with Stephen Kavanagh & Jim Gavin in Aid of SVP
Deal Details: Dublin-based construction company Ardmac has acquired a significant equity stake in Cental. The financial consideration of the deal was not disclosed.
Ardmac is a leading provider of high-tech cleanrooms, data centre solutions, specialised refurbishments, and a builder of turn-key manufacturing facilities across Europe. In its most recently filed accounts to December 2018, Ardmac Group Limited recorded revenue of €156.7m and EBITDA of c. €3.9m.
Based in Carlow, Cental is a provider of advanced modular infrastructure to the data centre, utilities, and telecommunication industries. It plans on doubling its workforce to 140 in the next two years following the investment. Prior to the share sale, Cental was owned by shareholders including John Moore, Raymond Flynn, Brian Maguire and others.
Advisors: Holmes O’Malley Sexton provided legal advice to Ardmac while Focus Tax Partners acted as tax advisors.
Renatus Comment: Modular construction is a happening space and BAM Ireland last year took a stake in Modern Homes Ireland. Expect to see more big contractors take positions in an emerging part of the construction value-chain.
Source: Insider Media
Deal Details: Ifac, Ireland’s farming, food and agribusiness specialist professional services firm, has acquired Cashminder from Irish Farm Computers Ltd (trading as Agrinet), the farm software specialists.
Cashminder was developed by Agrinet as an easy to use cash management system that allows farmers to track their money and provide data quickly to their accountant, farm adviser, and to the Teagasc eProfit Monitor.
This follows from Ifac’s recent launch of its FarmPro service which is a collaboration with Bank of Ireland and the New Zealand based Figured.
FarmPro is an online platform which tracks farm data such as livestock and crop production allowing the entire farming team access to a farmer’s financial information remotely and in real-time.
Advisers: None mentioned
Renatus Comment: Together the recent launch of FarmPro and the acquisition of Cashminder reinforce Ifac’s position as the leading professional services firm in the farming sector.
Ifac is a €25m turnover business with 19,000 clients across 30 offices nationally and the 8th largest professional services firm by turnover in the country.
Source: ifac’s Press Release
Deal Details: Amdocs has agreed to acquire Irish technology company Openet for $180m (c. €152m) cash.
The deal is expected to be completed before the end of 2020.
Headquartered in Ireland with operations across the globe, Openet is a leading software and services provider to communications companies. More recently, they have developed software that help TelCos earn revenue from 5G services.
Openet Telecom Ltd had revenue of €62.0m in its most recently filed accounts to December 2018. It has been reported that Openet had an internal share restructuring last year which valued the company at c. €20m. A major contract win this year with an American TelCo likely had a significant impact on its valuation and Amdocs’ decision to acquire.
NASDAQ-listed Amdocs is a multinational founded in Israel and now headquartered in Missouri, with support and development centers located worldwide. The company specializes in software and services for communications, media and financial services providers and digital enterprises.
Advisors: Capnua Corporate Finance acted as financial advisors to Openet.
Renatus Comment: This will be a great return after a 20-year journey for founders Niall Norton and Joe Hogan who established the business in 1999. It will be a great result for investors who joined the Openet journey along the way including Barry Maloney’s Balderton Capital and German outfit Cipio Partners.
Enterprise Ireland were also one of the backers of Openet.
Source: Openet , The Sunday Times
Deal Details: London-listed publisher Reach has agreed to acquire the remaining 50% of the Irish Daily Star publisher, Independent Star from INM. The financial consideration of the deal, which is subject to regulatory approval, was not disclosed.
This deal comes after Reach acquired an initial 50% in independent Star in 2018 from Richard Desmond’s media group, Northern and Shell.
Reach, who own and operate the Daily Mirror and Daily Express in Britain, also publish the Irish Daily Mirror, the Sunday Mirror and the Sunday People. Reach also owns RSVP magazine and the websites dublinlive.ie and rsvplive.ie.
Advisers: INM was advised by the Arthur Cox team led by Partner Cian McCourt, Andrea Bowdren in Corporate and Patrick Horan advising on Competition/Regulatory.
LK Shields acted on legals for Reach PLC.
Renatus Comment: Media has been a very active space for M&A recently. The reduction in advertising spend due to economic anxiety brought on by Covid has led to a squeeze in the publishing market which is so dependent on advertising revenue to support operations.
This had led to consolidation in the space with established brand names becoming available at a discount to its pre-Covid values.
Source: Irish Independent
Deal Details: M&P O’Sullivan Ltd has acquired Brennan’s Caterworld out of liquidation. The financial details of the deal were not disclosed.
M&P O’Sullivan, a family business since 1905, operates Gala retail and Your Stop franchises. Its wholesale portfolio includes Homestead, White Hat and Red Abbey.
Brennan’s Caterworld is Ireland’s longest-running catering equipment and supplies business, founded in 1872. The company last reported an annual turnover of €3 million.
Advisers: None mentioned
Renatus Comment: We expect to see a long tail of transactions such as this. Covid-19 and the lingering economic impacts will likely result in a stream of businesses collapsing, especially as Government supports scale down and creditors become less patient.
Difficult economic times result in casualties and those companies that remain will be presented with opportunities to acquire former competitors or expand into a new market.
Source: Shelf Life
Irish-based and London-listed exploration company Conroy Gold & Natural resources is in talks with Anglo-Asian Mining about a c. €7m investment to develop a gold mine along a 65km stretch known as the Longford – Down Massif.
The deal will form a joint venture between the two companies. Under the terms of the deal, Anglo Asian Mining could acquire up to a 55% controlling interest in some of Conroy’s key assets.
Once the deal gets shareholder approval, Anglo Asian will acquire a 17.5% stake in the joint venture companies for €2m to go toward the “primary expenditure programme”. The company will then have the option to increase its interest by a further 7.5% in each joint venture company for €2m. Anglo Asian can then opt to acquire the full 55% in each joint venture by investing a further €3m.
Source: Irish Times
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 Gorey, Co. Wexford, Kavanagh Crane Hire is one of the largest providers of lifting solutions in Ireland with over 55 cranes on its balance sheet. The company and its subsidiaries provide crane hire services, equipment sales and also develop property.
In its latest fiscal year, the company saw revenue increase by 31.2% to c. €13.2m which led to EBITDA also increasing by 19.2% to c. €3.3m. There was a net cash increase of c. €365k after a significant fixed asset purchase of c. €2.7m.
The company employed an average of 62 employees during the year at an average cost of c. €5.1m. The company is 100% owned by the Kavanagh family.
Based in Dublin, Galco Steel is Ireland’s largest hot dip galvanizer with five galvanizing facilities located across the island of Ireland. The company also provides additional services including transport, technical support and an in-house paint facility.
In its latest fiscal year, the company saw revenue increase by 11.9% to c. €31.5m while EBITDA increased significantly by 76.4% to c. €3.7m. This was driven largely by the increased revenue as well as stronger gross margins. The company had a net cash increase of c. €250k after working capital movements of c. €1.6m and fixed asset purchases amounting to c. €1.3m. A dividend of €400k was also paid to shareholders.
The company employed an average of 254 employees during year at a cost of c. €11.4m. The company is owned by Geraldine (24.6%), Miriam (24.6%), Fiona (24.6%) and Elaine (24.6%) Quinn and Bernard Shanley (1.6%).
Who: Dublin-based pharmaceuticals company Xeolas has secured funding.
What: The €1m funding round was sourced from The Goodbody 2019 EIIS Fund. The raise is a follow on from the €1.3m raised in December, between The Goodbody 2018 EIIS Fund and a group of private investors, headed by Paul Keenan, the Executive Chairman of Capnua who also acted as the advisors for Xeolas
Why: The investment is to enable Xeolas to promote and scale up new products, whilst marketing its already established product, Bonasol. Bonasol is an orange flavoured drinkable solution used to treat osteoporosis and is presented as a 100ml single use, weekly treatment. Xeolas are currently launching its new Pedippi® product in selected European markets. Pedippi® is a new prescription treatment for Gastroesophageal Reflux Disease (GERD) in small infants and is presented as a child-friendly oral suspension.
Source: Baker Tilly
Who: Pharmapod, an Irish developer of cloud-based platform to reduce medication errors, is near to closing a funding round.
What: The €3.5m round is being managed by Focus Capital. When completed, this round brings the total funds raised to date to over €7m.
Why: The funds will be used for expansion into new markets and for increasing its headcount to 50.
Source: Irish Times
Who: Irish social enterprise, FoodCloud, which works with charities and community partners to redistribute surplus food to those in need, has received funding.
What: The €110,000 investment comes from Nestlé Ireland. The partnership with FoodCloud is part of Nestlé UK and Ireland’s ambition to help 8,000 families who might otherwise go hungry during the school summer holidays.
Why: The funding will be used to improve access to food that specifically meets the nutritional needs of families and children.
Source: Irish Times
Who: US-based Imvax, which is led by Irishman John Furey, has secured funding.
What: The clinical-stage biotechnology company has raised $112m (€97.7m).
The funding round was led by existing backer HP Wild Holdings and included Ziff Capital Partners, Magnetar Capital, TLP Investment Partners and Invus.
Why: The funds will be used to advance the development of a vaccine for glioblastoma multiforme (GBM) into phase II clinical trials. GBM is an aggressive form of cancer in the brain and spinal cord.
Source: Irish Times
Who: Irish health-tech company Neurovalens, founded in 2015 by Dr Jason McKeown and neuroscientist Paul McGeoch, has secured funding.
What: This funding of £5.1m (€5.6m) brings total investment in the company to date to over £11m (c. €12.2m). The round was led by existing backer IQ Capital. Other participants included Wharton Asset Management, the Angel CoFund, Techstart Ventures, Co-Fund II managed by Clarendon Fund Managers and the UK government’s Future Fund.
Why: The investment will be used for expansion and for further development of its non-invasive neurostimulation technology.
The company is seeking FDA and EU regulatory approval to use its technology as a medical treatment.
Source: Irish Times
Who: Irish fintech company Assure Hedge has secured funding. Founded in 2016 by CEO Barry McCarthy, Assure Hedge is a provider of FX technology to protect companies against currency fluctuations.
What: The company agreed a £9m (€9.9m) margin finance facility with entrepreneur Pearse Mee’s Carrig Glen Investments (CGI). Under the terms of the agreement, CGI will be entitled to up to 1,500 shares in the company at a price of €1,017 per share, representing about 5% equity.
Why: This facility is to fund initial margin deposits which Assure Hedge is required to place with its liquidity providers for FX transactions.
Source: Irish Times
Who: CreditLogic, founded by ex-KBC executives Eddie Dillon and Gavin Bennett, has secured funding.
What: The €1.5m funding round was led by Dr. Martin Scott, a partner at PE firm Riverside. A number of fintech investors, some existing backers and Enterprise Ireland also participated.
Why: The funding will be used to accelerate its product roadmap.
Source: Irish Times
Who: Kitman Labs has received investment.
What: The Irish sports technology provider has raised $6m (€5.1m) from investment company QVIDTVM.
Why: The cash will be used to continue the development of the company’s existing core performance intelligence platform and provide new products to help with coronavirus related safety measures.
Source: Irish Times
Who: Ufurnish is an online home furniture marketplace founded by Deirdre McGettrick and Ray Wright. The business sells products from over 100 retailers on its platform.
What: Ufurnish has raised a reported £1.8m from a number of investors including Dalata head Pat McCann.
Why: The funds will be used to hire new staff and marketing initiatives to build brand awareness.
Source: Business Post
Who: Irish mobile chat start-up Quorum has raised a seed round. The app lets creators and service providers communicate directly to their clients via chat, with enhanced features to moderate, manage users and monetise the interactions.
What: The company has reportedly raised a €1.7m seed round led by investors Adjacent and Local Globe, Amaranthine and Y Combinator.
Why: The proposed use of funds was not disclosed.
Source: EU Start-Ups, Business Post
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.
A common theme that we are seeing across a number industries is an accelerated adoption of digital solutions amongst businesses in response to Covid-19 disruptions.
One area where this trend has become particularly relevant in recent weeks has been the supermarket sector. An excellent article in the FT this week illustrates this.
In the UK, grocery e-commerce took two decades to go from zero to around 7% of total grocery sales. It then went from 7% to 13% in about eight weeks. Researchers at Bain estimate that both German and Italian online grocery sales doubled during the pandemic and now account for 2.9% and 4.3% of the total, respectively.
As can be seen in the graph below, In-Store shopping provides a positive margin for supermarkets while all forms of online shopping have a negative margin. Supermarkets will have to adapt their delivery model and/or their price model to survive with this new mix of sales channels.
Covid appears to have structurally changed the supermarket business model. The longer the pandemic goes on, the more we should expect to see lasting changes in many other industries.
62.6
The KBC Bank Ireland’s consumer sentiment index for July 2020, a marginal improvement on previous months reading of 61.6 and lower by 22.9 points year-on-year, according to @AskKBCIreland
8.2%
The year-on-year decrease in the Irish wholesale price index for June 2020, according to @CSOIreland
3.2%
The year-on-year decrease in the number of homes under construction nationwide for June 2020 amounting to 13,661 new homes. In Dublin, the number is 10.2% lower vs June 2019, according to GeoDirectory. @IndoBusiness
5.2%
The year-on-year decrease in the goods handled by 6 of the 7 main Irish ports, excluding Rosslare, for Q1 2020 with 4.0 million tonnes forwarded and 8.1 million tonnes received, according to @CSO
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