Renatus Weekly M&A & Company Performance Private Equity Newsletter 27/06/2021

Deal Details: Irish bedding manufacturer Kayfoam Woolfson has been sold by Irish private equity firm FL Partners to Leggett & Platt Inc, a large US multinational (NYSE: LEG). The deal is reported to have been worth more than €100m.

Kayfoam Woolfson owns bedding brands King Koil, Kaymed and Odearest and was acquired by FL Partners in 2007 in a deal reportedly worth around €60m. Kayfoam employs more than 300 people, with plants in Dublin and Kilcullen, Co Kildare.

Leggett & Platt, founded in 1883, is based in Missouri and employs more than 20,000 people.

The most recent published accounts for Kayfoam Woolfson Unlimited Company to September 2019 show revenue of €60m and EBITDA in excess of €10m.

Advisers:
Kayfoam:
Mark McEnroe and Laura Kilbride of PwC Corporate finance advised the Vendors and Paul O’Connor prepared the Vendor Due Diligence;
Rob Dickson, Ron Boucher and Niamh Callaghan of Mason Hayes Curran advised on legals.

Legget & Platt:
Arthur Cox team led by Brian O’Gorman advised on Legals;
Patrick Dillon & Tom Roche Grant Thornton acted as buyside advisers.

Renatus Comment: FL Partners acquired the company in 2007 from the Woolfson family, a year before the financial crisis in 2008.  After a number of years of difficult economic conditions post acquisition, the business stabilised and went onto thrive under CEO  David Moffitt and John Sexton  Finance Director, who had previously worked alongside the founding Woolfson family.

FL Partners was founded in 2006 and has enjoyed great success investing in various businesses with this, the Racing Post, UTV, ATA, Sunseeker and more recently residential property deals in Ireland the UK and US.

Source: Irish Times

Cork-headquartred Everseen, founded in 2007 by Alan Herlihy, is a specialist in AI-powered computer vision software.

From its headquarters in Blackpool, Cork and through research centres in Romania and Serbia, Everseen has developed video-camera technology that monitors self-service checkouts for items that were not scanned, thus reducing errors and thefts. Such errors and thefts cost retailers up to €40bn each year.

Advisers: Martin Higgins of Focus Capital Partners, the corporate finance advisor to Everseen since 2016, advised Everseen on this transaction.

Renatus Comment: Last year, Everseen raised investment from a range of private individuals which reportedly valued the company at that time in excess of €100m. The technology has achieved critical mass in the Retail sector across processes such as self-checkout and inventory management. Everseen are in 14 of the top 25 global retailers, according to an interview given by CEO, Alan O’Herlihy.

Source: PR Newswire

Deal Details: Grafton Group is to establish a presence in Finland via the acquisition of Isojoen Konehalli Oy and Jokapaikka Oy (IKH) for a reported €199.3m in an all-cash deal.

IKH is one of the largest workwear and personal protective equipment, tools, spare parts and  technical accessories wholesalers and distributors in Finland. Founded in 1956, IKH currently employs around 400 people. It reported revenue of €158.8m and an adjusted operating profit of €21m for the year ended February 28th, 2021.

Advisers: None mentioned.

Renatus Comment: This is Grafton Group’s 5th acquisition since the beginning of the global pandemic and strengthens the groups operation in mainland Europe. Grafton Group owns such brands as Woodies, Chadwicks and Leyland. Grafton Group benefited significantly in the recent boom for home improvements. According to research commissioned by the Irish League of Credit Unions, Energia and House2Home, 56% of Irish households are considering home improvements due to more time spent at home due to the Covid-19 pandemic.

Source: Irish Times

US-based Niacet is a global market leader in technologies for preservation in its key market categories of Bakery, Meat and Pharma.

It is reported that for the year ended 31 Dec 2021 Niacet is expected to have pro forma annualised revenue of c.$220m and EBITDA of c.$66m, representing an EBITDA margin of c.30%.

Kerry Group is the world’s leading taste and nutrition partner for the food, beverage and pharmaceutical industries.

Advisers: None mentioned

Renatus Comment: Last week we reported Kerry’s sale of the meat business to Pilgrims for a reported €819m and Kerry were not long finding a use for these proceeds. The transaction value for Niacet reportedly represents an implied EV/EBITDA multiple of 15.4x excluding synergies for a 2021 pro forma EBITDA of around USD 66m. The reported value on the meat business was 8.5x 2021 EBITDA, which illustrates the premium attracted by specialist ingredient companies over consumer food brands.

Source: Kerry Group

Deal Details: Irish regulatory software company Vizor Software has been acquired by BearingPoint RegTech. Financial consideration was not disclosed.

Vizor, founded in 2000 by entrepreneurs Conor Crowley and Ross Kelly, is headquartered in Sandyford, Co Dublin and employs around 100 people.

BearingPoint RegTech, founded in Frankfurt over 25 years ago, was acquired by multinational consulting firm Nordic Capital late last year.

Together, RegTech and Vizor serve more than 7,000 firms including banks, insurance companies, and financial services providers with reporting solutions. At the same time, they enable more than 50 regulators and tax authorities to collect and analyze data from 34,000 firms in 60 countries.

Advisers: Novacies Capital led by Ciaran McGloin (M&A) and Eversheds Sutherland led by Enda Newton and Emer Shelly (Legal) acted for Vizor on this transaction.

Renatus Comment: In the year ending December 19, Vizor generated €13.5m of revenue. Vizor was chaired by Nigel Kelly.
According to a reported issued by the World Bank in late 2020, almost three-quarters of 118 authorities in 114 different jurisdictions said they had accelerated or introduced new initiatives on digital infrastructure, while 58 per cent said they had accelerated or introduced new measures to support “RegTech” and supervisory technology, or “SupTech”. Vizor is well placed to support these authorities in the fast changing fintech landscape.
Source: Vizor Software

Deal Details: Neueda, an international tech company headquartered in Belfast, has been acquired by Version 1 for an undisclosed sum.

Neueda, founded in 2002, is an award-winning technology partner to leading companies including J.P. Morgan, Citi, Liberty I.T., Credit Suisse, and Microsoft.

Version 1, established in Dublin in 1996, is rapidly growing IT Services provider delivering Digital, Cloud, Data and ERP Transformation services to commercial enterprises and public sector organisations.

Combined, the businesses will have almost 2,000 employees, more than 500 customers, and project revenue of €200m in the next year. Its operations are spread across Ireland, the UK, Spain, and India.

Advisers: Patrick Quinlan and the Irish corporate team at Maples Group supported Version 1 on the legal aspects of this transaction.

Renatus Comment: The purchase is the 12th acquisition for Version 1 to date. The Company’s last acquisition, Singlepoint, took place in March 2020. Version 1 already had a strong presence in Northern Ireland since establishing in Belfast in 2012. Last year Version 1 announced the establishment of a Digital Development Hub in Belfast and the creation of 70 specialist IT jobs.

Source: Version 1

Deal Details: Newry-headquartered Murdock Builders Merchants (Murdock) has acquired Brooks Group from Welsh-based Premier Forest Products Group.
The transaction details of the deal, which is subject to regulatory approval, were not disclosed.

Murdock was established in 1982 by the Murdock family. It is now the leading family-owned builders’ merchants in Ireland with 14 branches and 2 timber mills.

Brooks Group, comprising Brooks Builders Merchants (“Brooks”) and Dublin Plywood and Veneer (‘DPV’), was founded in 1790.

It is one of the largest timber and building suppliers in the Republic of Ireland with 7 thriving stores nationwide.

Advisers:

Sellside:
Acuity Law, Cardiff (Rachelle Sellek and Tom Saunderson) and Flynn O’Driscoll (Pat Flynn, Julian Cunningham, Cian O’Leary and John Darby) provided legal advice
Gambit Corporate Finance (Geraint Rowe), Deloitte (Paul Dunlea).

Murdocks Builders Merchants:
Eugene F Collins advised on the legals (Deborah Kelly, Eoghan Ó hArgáin, Lorna Osborne, Frances Colclough and Kathi Ó’Riain)
Grant Thornton provided corporate finance and tax advice (Emer Dowling, Patrick Dillon & Tom Roche)

Renatus Comment: Brooks was originally established in 1750 and has a long and storied heritage in timber provision and in merchanting in Ireland. Murdocks also announced that, following completion of the acquisition, it plans to appoint Eddie Kelly as chairman of Brooks Group. Mr Kelly has had a significant career in Irish builders merchanting and, as chief executive, led Grafton’s merchanting business in Ireland for seven years prior to his recent retirement.

Murdocks’ demand is likely to be driven by new housing completions. Given the significant shortage of housing with only 20,000 houses forecast to be completed in 2021, Murdocks is well placed to benefit from increased activity in the coming years.

Source: Murdock Building Merchants

Deal Details: Belfast-based Repstor is acquired by Intapp, a Californian cloud-based software solutions company, in a deal reported to be up to £36.5m (€42.53m).

Repstor specializes in optimizing Microsoft 365 productivity and information control for professional services firms and in-house legal teams.

Intapp helps professional and financial services firms better connect their people, processes, and data through AI-powered software solutions.

Advisers: None mentioned

Renatus Comment: Prior to the transaction Repstor had 17 shareholders including chief executive Alan Mcmillen, Fergus Wilson, Sheila Gormley and Paul Moorhead.

It is reported that Intapp has filed proposed terms for $278m IPO. Assuming a successful IPO, the company enterprise value would be approximately $1.5bn.

Source: Intapp