ICON to acquire PRA Health Sciences, Bauer Media to acquire Communicorp, CentralReach acquires Avail, Greencoat Renewables to acquire wind farm, Mzuri Group acquires TCMM Shutter Group and more in this weeks Renatus M&A newsletter.
Renatus Weekly M&A & Company Performance Newsletter 28/02/2021
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
ICON to acquire PRA Health Sciences
Deal Details: Dublin-headquartered ICON plc has agreed to merge with US peer PRA Health Sciences in a cash and stock transaction valued at c. $12 billion (€9.88bn).
ICON is a global provider and developer of drugs to the pharmaceutical, biotechnology and medical device industries. Last year, the business ran the clinical trials that helped bring the Pfizer-BioNTech Covid vaccine to market.
PRA is one of the world’s leading global contract research organizations by revenue, providing outsourced clinical development and data solution services to the biotechnology and pharmaceutical industries.
Advisers: Centerview Partners acted as lead financial advisor, Citi provided additional financial advisory services, and Cahill Gordon & Reindel served as legal counsel to ICON plc. A&L Goodbody also acted for ICON plc, alongside Cahill Gordon & Reindel LLP, with a team of Mark Ward, Berni Hosty, Richard Marron, Keavy Ryan, Seamus O Croinin, Alan McCarthy, Anna-Marie Curran, and Paul Fahy.
BofA and UBS Investment Bank acted as financial advisors, and Paul Weiss serving as legal counsel to PRA Health Sciences. Arthur Cox partnered with Paul, Weiss, Rifkind, Wharton & Garrison LLP in advising PRA Health Sciences. Arthur Cox was led by Cian McCourt and included , Fintan Clancy, Cian Beecher, Colin Kavanagh, Olivia Mullooly, and Patrick Hoarn.
Renatus Comment: Icon is a super Irish success story. Founded in 1990 by John Climax and Dr. Ronan Lambe. It has grown steadily since its early days, with a strong focus on value-adding bolt-on acquisitions as a way to bring in new expertise and broaden the companies offering. Counting from its website, the company has made 29 acquisitions over the last 30 years, averaging almost one acquisition per year.
This new deal is on a different scale to those before. The $12bn deal will create the number 2 contract research organisation in the world, with c. $6bn in annual revenues and employing c. 32,000 people globally.
Bauer Media to acquire Communicorp
Deal Details:Bauer Media Audio has entered into an agreement to acquire Communicorp Group, subject only to regulatory approval. No financial consideration was disclosed but it is reported to be valued at more than €100 million. The business is reported to owe Ulster Bank c. €40m in debt.
Commicorp is Ireland’s largest commercial radio group, with a weekly audience of more than 1.75 million people. The group comprises of Ireland’s only two national commercial radio stations Today FM and Newstalk. In the stable alongside these are local stations such as Spin 1038, 98FM and Spin Southwest.
Through this transaction, German firm Bauer Media Audio enters the Irish market and extends its audio business to eight countries, further developing its position as Europe’s leading commercial radio operator with more than 55 million weekly listeners.
Advisers: LK Shields acted for Denis O’Brien in the sale of Communicorp to Bauer Media, with a team led by Jennifer McGuire with assistance from James Byrne, Stephen Gamble, Marco Hickey, Jane O’Grady, Gillian Dully, and Elaine O’Connor.
David Lyons of IBI Corporate Finance also advised Communicorp.
Renatus Comment: This deal brings to a close Denis O’Brien’s involvement in the Irish media industry. The Digicel founder entered the Irish media market through his interest in Classic Hits 98FM in 1989. Communicorp went on to become the majority shareholder in Newstalk, then only a Dublin station, in 2004. It later gained a national licence.
Mr O’Brien’s media holdings expanded significantly when he bought Today FM from Emap in a landmark €200 million deal in 2007, during a buoyant spell for the Irish advertising market. This deal also included Highland Radio and FM104, both of which were sold soon after. In 2019, O’Brien sold his 29% stake in Independent News and Media to Mediahuis.
While he undoubtedly lost significant money from these investments, any basket of stocks exposed to newspaper and radio would have lost significant money given the structural shifts over the past two decades.
The latest accounts for Communicorp, filed in December, show that the company made an after-tax profit of c. €1.6 million in 2019, compared to a €700,000 loss the year before.
Source:Communicorp, Irish Times
CentralReach acquires Avail
Deal Details: US-based CentralReach, a provider of practice management software for the developmental disabilities sector, with a focus on both research and practice, has acquired Avail Support Limited.
Founded by majority shareholder Lisa Clinton in 2017, Irish-based Avail is a provider of evidence-based digital content management and data collection solutions serving the education, employment support services, and adult transition services markets.
Avail Support team will continue to be based in Ireland following the acquisition.
Advisers: Wallace Corporate Counsel LLP, with a team of Gar Smyth, Patrick O’Shea, Caoimhe Ruane, Alan Ryan, Michael Bambrick, Stephen Moore and Darragh McCarthy advised Avail Support.
Renatus Comment: With early investment and support from Enterprise Ireland, Avail Support created an award-winning product, validated the market need and gained early market momentum. The exit to CentralReach is a great success story for Avail Support’s founders.
Greencoat Renewables to acquire wind farm
Deal Details:Greencoat Renewables is to acquire the Cordal wind farm from Cubico Sustainable Investments, a global renewable energy investor and operator.
The wind farm is located in Co Kerry, and consists of 28 3.2MW GE turbines that reached full commercial operations in May 2018.
The acquisition is being funded by the group’s existing revolving credit facility and is expected to close in April.
Advisers: Cubico were advised by KPMG (Russell Smyth, James Delahunt, Neil Collins) along with Mason Hayes & Curran on legals (Liam Brazil, Eoin Cassidy).
Greencoat were advised by A&L Goodbody (Charlie Carroll, Ross Moore)
Renatus Comment: Paul O’Donnell’s Greencoat Renewables is one of the most frequently covered companies in our newsletter. The serial acquirer has built up a very impressive portfolio of renewable energy assets across Europe.
NTR buys projects in Wexford
Deal Details: NTR, a sustainable infrastructure investor and asset manager, has acquired a 54 MW portfolio of co-located solar and battery storage projects in Wexford from renewable energy developer RES.
RES is the world’s largest independent renewable energy company active in onshore and offshore wind, solar, energy storage, transmission and distribution.
The portfolio comprises two battery storage projects adding 25 MW of storage capacity to the Irish grid network, along with 29 MW of solar PV. The portfolio of projects will enter operations in 2022.
Total consideration for the projects amount to c. €29 million.
Advisers: None mentioned.
Renatus Comment: Rosheen McGuckian led NTR acquires, constructs, and manages sustainable infrastructure assets throughout Europe and the US. Its heritage dates back to 1978 when it was incorporated to build Ireland’s first toll bridge. It made its first sustainable infrastructure investment in 1999 in wind. This latest acquisition brings the renewable energy assets under management by NTR to over 600MW of generation and battery storage projects located throughout Ireland, France, Sweden, Finland, and the UK.
Mzuri Group acquires TCMM Shutter Group
Deal Details: Lisburn-based Mzuri Group has acquired TCMM Shutter Group for an undisclosed sum.
TCMM, which is one of the biggest interior wood shutter distributors in the UK with own brands like Shutterly Fabulous and California Blinds, also owns Shutter Store in the US.
Mzuri Group, which now employs a total of 1,227 people, was set up in 2018 by the owners of Decora Blind Systems as part of its acquisition strategy.
Advisers: Lewis Silkin advised the founders of TCMM Shutter Group, which was led by Karish Andrews, with support from Matthew Rowbotham and Joe Lythgoe.
Renatus Comment: After raising capital last year, this acquisition marks The Mzuri Group’s first big expansion step of shutter distribution in Europe and the USA, and an exciting next phase of growth for the business.
KBA acquires Luxembourg fund manager
Deal Details: Dublin-based fund and asset management services firm, KB Associates, has acquired Luxembourg fund management company EFG Fund Management for an undisclosed sum.
Established in 2003, KBA and currently supports investment funds with assets under management of more than €250 billion.
EFG Fund Management is a subsidiary of Swiss private banking group, EFG International, and is a longstanding client of the firm.
Advisers: None mentioned.
Renatus Comment: This is KB Associates first reported acquisition since it took in funding from ECI Partners in 2019. The M&A landscape in financial services as a whole has been very busy for a while now with a lot of consolidation happening.
Olive Group acquires Ofabee
Deal Details:Olive Group, an Irish e-learning company, has acquired Ofabee, an India-based B2B software-as-a-service business enables coaching and training institutes to launch their own websites or apps and manage online courses.
Following the acquisition, Ofabee will merge with Olive Group’s mykademy.com, which offers a similar service.
Olive Group was founded in 2007 by Brendan Kavanagh, who looks to be the majority shareholder.
Advisers: None mentioned.
Renatus Comment: Kavanagh reported to be targeting up to five bolt-on acquisitions this coming year. It is an ambitious plan, but well executed acquisitions can really accelerate the growth trajectory for the business.
DEALS IN THE MAKING
Ardagh Group to list its beverage cans unit
Ardagh Group, the glass and metal packaging group led by Dubliner Paul Coulson, announced last week that plans to spin-off its beverage cans unit through a separate US stock listing in a deal that values the business at $8.5 billion (€7 billion). By splitting out from its traditional glass business, the move is expected to attract a high valuation for the cans business, may ultimately pave the way for the delisting of the wider Ardagh Group, which floated in New York four years ago.
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.
Killarney-based Arvoia uses artificial intelligence technology to enable clients to gain deep direct customer understanding, deploy a raft of prediction and personalisation products, whilst cutting their marketing spend with search engines and social platforms.
In FY19, the business reporting EBITDA of c. €1.0m after a loss in FY18. In revenue terms, there was a 17.1% increase YoY as the business reported revenue of €4.0m. Cash at bank at the end of the year was c. €517k.
Arvoia shareholders include Michael Webster and Nicola Henderson. The business has received support from Enterprise Ireland.
Who: Dublin-based medical devices company Vasorumhas secured funding.
What: Vasorum has secured a €6 million equity investment from State-backed venture capital firm BGF. This marks the 7th Irish investment by BGF in 2 years.
Advisors: BGF was advised by Dillon Eustace, led by Lorcan Tiernan, and supported by Owen Brayden, with UK firm Potter Clarkson (legal), Ronan Murray (Financial) and Grant Thornton (tax). Vasorum was advised by Clark Hill (legal), Michael Kinsella of BCA (financial) and David O’Flynn of EVA Consulting (commercial).
Why: The investment will be used to accelerate the commercial roll-out of the CELT ACD device in the United States and to invest in new product development.
Source: Dillon Eustace
Who: Irish booking site Campsited, which allows users to book stays at thousands of campsites across 18 countries has raised funding.
What: The business has already raised €600,000 as part of a targeted new €3 million funding round. Campsited has previously raised €2.9 million from backers that include Enterprise Ireland and Motley Fool Ventures. Legal advisers to Campsited – Wallace Corporate Counsel LLP – Alan Ryan, Michael Bambrick, Graham Coyne.
Why: Campsited is to shortly launch RV and campervan rental options on its platform as well as German, Italian and Spanish-language versions of its website to sustain international growth.
Source: Irish Times
Who:Element Finance, a new venture debt fund led by John Gallagher, former investment director at the Ryan family’s Irelandia, and John O’Dwyer, who previously served as head of strategic investments and ventures at AIB.
What: The US-headquartered fund is to allocate $50m (€41.2m) to lend to scaling Irish companies.
Why: Element provides venture debt funding for software-as-a-service (SaaS) companies with at least €1 million in recurring revenues that are seeking growth capital.
Source: Irish Independent
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.
There has been a widespread assumption that we will be in a zero to negative interest environment for a long time. On Thursday, with the ten-year US treasury yield hitting 1.6%, there ware doubts raised about this assumption.
This move in rates could be felt throughout the economy. For borrowers with tracker or variable rate mortgages, this could hit a chunk of disposable income in the future, and similarly a move in base rates would hit businesses’ cost of borrowing.
Our Government debt seems well fixed and late maturing, and wont be a short term problem, but medium to long term it will hit also.
It’s just one to keep an eye on. Maybe getting a bit of yield on cash, if it was to emerge, will solve the problem of so much money in the world chasing yield and driving prices up.
The year-on-year increase in deposits from Irish households, recording a net inflow of €15.1bn to €126.4bn at end-January 2021. According to @centralbank_ie
€275.5 billion & €356.1 billion
Ireland’s respective Gross National Income (GNI) & Gross Domestic Product (GDP) in 2019. According to @CSOIreland
The year-on-year decline in Irish road freight tonnage in Q3 2020, with a total of 39.8m tonnes of goods transported by road during this period. According to @CSOIreland
The rate above the European average Ireland ranks for in the cost of basic products and services in 2019, the second highest in Europe. According to @IrishTimesBiz. @CSOIreland
The year-on-year increase in the value of mortgage approvals for January 2021, with a total of 3,355 mortgages valued at €823m approved last month. According to @BPFINews. @IndoBusiness
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