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.
Save the date – 15th October 2020 at 11am!
The Real Deal 2020 Webinar, brought to you by Renatus Capital Partners, Bank of Ireland and Fitzgerald Power.
About this Event:
We were overwhelmed and grateful for all the support for The Real Deal 2019 event at Goffs again last year. The event booked out with over 1,000+ registrants and the majority of whom were SMEs who were curious to learn.
Unfortunately, this year due to Covid-19 restrictions we cannot host our exclusive event in Goffs, so we have decided to run an intimate studio-based webinar discussion with the insightful Pat McCann instead. We intend to provide you with the same knowledgeable insights during this one-hour long webinar which will be moderated by Matt Cooper, who has become a pivotal figure for The Real Deal, having hosted the previous two events.
Speaker Announcement
Pat McCann, Chief Executive Officer, Dalata Hotel Group will be joining Matt Cooper for The Real Deal 2020 Webinar. Pat has almost 50 years of experience in the hotel industry, having embarked upon his career in 1969 with Ryan Hotels plc. He left Ryan’s Hotel plc in 1989 to join Jurys Hotel Group plc as General Manager of its flagship Dublin hotel, the Ballsbridge Hotel. Pat founded Dalata Hotel Group Ltd in February 2007 and became CEO of the company in August 2007. Dalata Hotel Group plc listed on both Dublin and London Stock Exchanges in March 2014. He was appointed Deputy President of IBEC in September 2018 and took up the role of President in September 2019. He is a non-executive director of several private companies. More recently, Pat has showed inspirational leadership for both the Dalata Hotel Group and the wider hotel industry while navigating through these difficult and bewildering times.
As a valued member of our network, we would be delighted if you signed up and tuned in on October 15th at 11am.
To sign up, please click through to Eventbrite
Shine A Light
Thanks to your generosity, The Real Deal raised over €16k last year for a very worthwhile cause. We have all decided to sleep out for the Focus Ireland Shine a Light again this year on October 16th, and as ever your support would be greatly appreciated. Please donate what you can here. The highlights videos from the previous two years can be viewed here.
We hope you enjoy the discussion!
Deal Details: Swiss drug giant Roche has acquired Irish biotech company Inflazome for a €380m upfront payment. Inflazone shareholders are eligible to additional milestone payments if company drugs meet certain targets.
Inflazome was founded in 2016 by leading medical researchers Prof Matt Cooper (University of Queensland, Australia) and Prof Luke O’Neill (Trinity College Dublin).
Inflazome is a pioneering inflammasome company developing orally available NLRP3 inflammasome inhibitors to address clinical unmet needs across a wide variety of inflammatory diseases ranging from Alzheimer’s and Parkinson’s to Cardiovascular disease, arthritis, and MS etc.
Roche, founded in 1896 by Fritz Hoffman-La Roche, is strong in the field pharmaceuticals for cancer treatment, against virus diseases and for treatment of metabolic diseases. The company is the world’s largest spender in pharmaceutical R&D.
The acquisition gives Roche full rights to Inflazome’s entire portfolio and research.
Advisers: Catherine Dowling of Byrne Wallace and Goodwin Procter acted for Inflazome on the legals while Lazard provided financial advice.
Renatus Comment: The Irish Bio-Pharmaceutical industry has grown from very humble beginnings in the 1960s to reach global significance today. 10 of the top 10 Bio-pharma companies globally are located here and bring huge value-add to the Irish economy every year. This will be a lucrative deal for Roche if Inflazome’s current trials are successful and its drugs are brought to market.
This deal marks an exit for Inflazome’s shareholders which include the Irish Strategic Investment Fund (ISIF) Fountain Healthcare Partners, Novartis Bioventures, Forbion Capital and a number of other individual shareholders. The Sunday Independent reports that ISIF is to have made a return of six times its investment, equating to an upside of €10m.
Source: Inflazome Press Release
Deal Details: Kotinos Partners has been acquired by global CEO advisory firm Teneo for an undisclosed sum.
Kotinos Partners is a Dublin-based consultancy focused on organizational performance. Founded in 2010, by James Bowen and Brian MacNeice, Kotinos Partners works with global companies to reshape organisation structures, roles and responsibilities and management processes to improve overall business performance and efficiency.
Teneo works exclusively with CEOs and Senior executives of the world leading companies providing them with strategic counsel across key objectives and issues. The firm has more than 800 employees located in 20 offices around the world.
Advisers: None mentioned
Renatus Comment: The professional services industry has been hugely impacted by the Covid-19 pandemic as executives cut back on discretionary spending. This sector, in particular, may buck the trend and see an uptick in demand for its services in response to companies evolving their organisation structures into a post-Covid world of remote working
Prior to the transaction, Kotinos was owned equally by Brian Macneice and James Francis Bowen.
Source: Teneo
Deal Details: DCC has further expanded its US-liquified petroleum gas business by acquiring Connecticut-headquartered NES group.
The group also recently agreed to acquire Primagaz in the Netherlands, this deal is subject to competition authority approval.
The combined value of the two transactions is reported to be about €65m.
NES Group markets, sells and delivers propane and other related products and services. It employs c.70 staff and has more than 22,000 active customers.
Following this acquisition, DCC now has operations across 14 states in the US.
Dublin-headquartered and ISEQ-listed DCC is a leading international sales, marketing and support services group operating through four divisions: LPG, Retails & Oil, Technology and Healthcare.
Advisers: None mentioned
Renatus Comment: This acquisition marks a further US bolt-on to DCCs ever-growing Petroleum and Gas Business after acquiring Pacific Coast Energy in April 2019. The US market poses a tremendous opportunity for DCC. According to its latest financial report, DCC shows that only 11% of its liquified petroleum gas sales were generated from the rest of the world operations.
Source: DCC
Deal Details: Beauparc Group has acquired UK-based LSS Waste Management in a deal reportedly worth over €21.8m.
Beauparc, the Irish company behind waste management brands Panda and Greenstar, was formed in 1990. It operates across the UK, Ireland and the Netherlands and employs around 3,000 people across 34 sites.
Leeds-based LSS employs around 100 people at its facility and is permitted to process 350,000 tonnes of waste annually. Beauparc estimates that LSS has potential to turnover €54.6m annually.
Advisers: None mentioned
Renatus Comment: Panda are heading towards becoming yet another case study of an Irish founded business getting to market leadership in Ireland, taking equity investment and growing to be even bigger internationally. The industry is arguably at its infancy of change given the sorting of materials at source of waste and at processing is only beginning. Most conscious customers who feel good consuming through compostable cups and cutlery don’t realise that they don’t generally get composted but the waste industry will catch up and it will play into the hands of the market leaders and those with scale like Panda.
Source: Independent
Deal Details: Uniphar has acquired US-based healthcare communications company Diligent Health Solutions for a reported consideration of up to €23.1m. Uniphar will pay €8.5m up front, with the remainder of the price linked to EBITDA performance over four years.
Uniphar PLC is a trusted global partner to pharma and medtech manufacturers across three divisions – Commercial & Clinical, Product Access and Supply Chain & Retail. Its workforce of over 2,300 people is active across Ireland, the UK, Benelux, the Nordics and the US.
US-based Diligent is a multifaceted healthcare communication center serving the pharmaceutical, biotech, and medical device industries.
Advisers: None mentioned
Renatus Comment: The broad Telehealth industry is an interesting and growing space as digital solutions continue to penetrate the healthcare industry. Industry reports cite an expected industry-wide growth rate of 14% per annum for the next few years. They offer an increasingly popular lower-cost alternative to traditional clinical care, facilitating virtual solutions, constant relationships between patients and caregivers as well as providing a continuous stream of real-time patient health data. Similar to what is being seen in other industries, Covid has accelerated the pace at which these technological solutions are being adopted.
Source: Diligent Health Solutions Press Release
Deal Details: SuperAwesome, a “kidtech” company founded by Irish entrepreneur Dylan Collins, has been acquired by Epic Games. The financial details of the deal were not disclosed however SuperAwesome was valued at over $100m after its last fundraising.
SuperAwesome gives developers the tools to create safer digital experiences for younger audiences. It is trusted by more than 300 top brands, including LEGO, Nintendo & Hasbro.
Epic is a leading interactive entertainment company and provider of 3D engine technology. Epic operates Fortnite, one of the world’s largest games with over 350 million accounts and 2.5 billion friend connections.
Advisers: None mentioned
Renatus Comment: This is not Collins’ first entrepreneurial venture. While at Trinity, Collins, alongside Sean Blanchfield and Ronan Perceval, established Phorest, a technology company that provides services to the Salon industry. Collins and Blanchfield also founded Demonware, a company that allowed gamers to play across consoles. Demonware was acquired by Activision for $17m.
Mayfair Equity Partners, which first invested in the business in 2017 as part of a $21m Series B round, is reported to have generated a internal rate of return (IRR) of c. 43% on its investment in SuperAwesome.
Source: SuperAwesome
Deal Details: Dublin-based aviation lessor LCI has teamed with Japan’s Sumitomo Mitsui Finance and Leasing Company (SMFL) to form a $230m(€197m) helicopter leasing venture called SMFL LCI Helicopters Limited.
The initial investment will see the joint venture acquire 19 helicopters in LCI’s fleet.
LCI, owned by the NY-based Libra Group, has a $6bn(€5.1bn) portfolio of aircraft and is the third-largest helicopter lessor in the world. It has provided leasing services to British Airways, Singapore Airlines and Air France, and major helicopter operators such as Babcock.
SMFL provides aircraft and engine leases and other asset-backed finance products, including leases, debt, and equity investments in sectors including real estate and energy.
It also owns Dublin-based SMBC, one the largest aircraft lessors in the world.
Advisers: Brendan O’Brien and the Walkers corporate team acted as the lead counsel for LCI.
Renatus Comment: Although we don’t typically comment on strategic alternatives to M&A-like joint ventures, it has been included due to Ireland’s significant stake in the global aviation leasing industry. The impact of Covid-19 has hit the industry hard, However by leasing aircraft to essential services like emergency services/search and rescue may provide a niche revenue generating opportunity for SMFL LCI Helicopters.
Source: LCI Aviation Press Release
Deal Details: Designer Group, an electrical and mechanical engineering company, is set to acquire FKM Mechanical for an unreported sum.
Designer Group, founded and led by Michael Stone, is one of Ireland’s largest mechanical engineering contractors employing more than 1,000 staff across Ireland, Britain, Europe and Africa.
FKM Mechanical, led by CEO Matt Mohan, is a mechanical engineering, fit out and facilities management provider based in Dublin with a client list including, Savills, Investec, Biomarin, amongst others.
Advisers: None mentioned
Renatus Comment: The most recent set of accounts for FKM Holdings Limited are for the period ending December 2018 and show the company generated an operating profit of c. €1.4m off turnover of €20.4m. These figures include the activities of FKM Group’s fit-out and facilities management divisions which were not included as part of this transaction.
Matt Mohan was the 100% owner of FKM Holdings prior to the transaction. Matt completed a management buyout of the company in 1992.
Source: Sunday 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 Cork, Astra Construction is a construction company founded by Stephen McCarthy over twenty five years ago. Since its founding it has developed a track-record in large scale projects nationwide.
In its latest fiscal year, the company saw revenue increase 49.4% to c. €15.9m while EBITDA also increased by 265.1% to c. €3.7m. This was driven by gross margins increasing from 19% in FY18 to 29% in FY19.
The company had a net cash decrease of c. €2.2m in FY19 leaving an ending cash balance of c.€1.9m. The most significant cash movements were the c.€10.3m spent on the repayment of short-term loans, c.€8.9m of new loans taken out and c.€860k of fixed asset investments, mainly spent on Plant and Machinery.
The company employed an average of 22 employees in FY19 at a cost of c.€1.2m. Stephen McCarthy owns 100% of Astra Construction Services.
Based in Dun Laoghaire, Co. Dublin, Ken Black Limited operates fives retail toy stores.
In its latest fiscal year, the company saw revenue increase by 0.5% to c. €16.6m while EBITDA increased by 3.7% to c. €2.9m. Gross margins remained around 38% YoY.
The company had a net cash increase of c.€644.9k in FY19 leaving an ending cash balance of c.€4.2m. The most significant drain on cash was c.€1.1m spent on fixed asset purchases of which c.€1m was spent on investments during the year.
The company employed an average of 82 employees in FY19 at a total cost of c.€2.61m. Ken Black owns 100% of Ken Black Limited.
The Good Fish Company was established by Denis Good in 1988 and is now one of the largest fish processors in Ireland. The company process fish out of its facility in Carrigaline , Co. Cork and sells fish to the retail sector. They also operate a number of retail shops in the cork region from where fish are sold directly to the public.
In its latest fiscal year, the company saw revenue decrease by 6.2% to c. €20.4m while EBITDA decreased by 21.2% to c. €1.0m. Gross margins remained around 10% YoY. Administrative expenses rose 11% to c. €983k in FY19 which was a primary driver of the EBITDA decrease versus the previous year. Prior to this year, the Company had experienced double digit percentage increases in EBITDA in the past four fiscal years, representing a fantastic period of growth for the business.
The company had a net cash increase of c.€77k in FY19 leaving an ending cash balance of c.€1.1m. The most significant movements in cash were the negative working capital movement of c.€596k and the c.€195.7k spent on fixtures and equipment.
The Company employed an average of 93 people in FY19 at a total cost of c. €3.2m. Denis Good Snr owns 100% of Good Fish Processing ( Carrigaline) Limited.
Who: Cork-based Bundledocs has raised funds.
What: €600,000 funding is backed by Enterprise Ireland and private investors.
Eoghan Doyle and Hugo Grattirola of Philip Lee represented Bundledocs on the legal side and Hogan & Associates provided financial advice on this fundraise.
Adrian Wall of ReganWall acted for the private investor on the legals.
Why: The funding will be used to drive its growth in the Asia-pacific region through investment in product development and sales & marketing. The company plans to double its team in the next three months.
Source: Independent
Who: Semi-state energy company Bord na Móna seeks to raise funds.
What: For the targeted €1.6bn, Bord na Móna has appointed Goodbody Corporate Finance team headed by Finbarr Griffin to manage the fundraising.
Why: The funds raised will be used to fund a series of wind and solar projects across its 200,000-acre landholding. The company is already generating 10% of Irish renewable electricity and is on track to achieve a 300% increase in its renewable energy output in this decade.
Source: Irish Times
Who: AIB becomes the first bank in Ireland to raise funds through a ‘green’ bond sale.
What: €1bn was raised on the green bond market. Citigroup, HSBC, ING, JP Morgan, Morgan Stanley and Davy have been hired to market the transaction. The sale of these bonds requires the money raised to be used for environmentally-friendly investments. These bonds are due to mature in 10.5 years.
Why: This capital will be used to support lending towards renewable energy projects and green buildings.
Source: Irish 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 with details of key recent executive and board level appointments.
Source:
(Google Images)
In response to the Covid-19 crises, SME Ireland has taken unprecedented steps to manage cashflows and reduce operating costs in order to survive. These steps, coupled with support from the government, banks and other bodies have helped to lighten the impact of travel restrictions, lockdowns and stimulate demand to-date.
The Sunday Times, referencing data from the Banking & Payments Federation Ireland, reports that up to 30,000 businesses are due to come off payment breaks this week as banks end a six-month debt holiday for struggling borrowers.
The ending of these payment breaks while we are still learning to live with the virus (and still going in and out of localised lockdowns) will only present further headaches and concerns for already struggling SMEs. It is likely that the effects of the removal of the payment breaks will be felt disproportionately by SMEs operating in labour-intensive service sectors such as retail, accommodation, hospitality and tourism.
Our thoughts are with all those struggling and, independent of providing equity, if we can be a sounding board for anyone struggling please reach out to us. A problem shared is a problem halved.
A link to the article can be found here
35%
The number of Irish businesses planning or considering to reduce their office space in the wake of the Covid pandemic, according to the survey of 325 executives by the Institute of Directors in Ireland (IoD). @IndoBusiness
11% & -2.3%
The year-on-year increase and decrease, respectively, in the volume and value of the mortgage approvals for August 2020 amounting to 3,875 approvals to the total value of €946m, according to the Banking and Payments Federation Ireland. @IrishTimes
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