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.
Deal Details: Cork-based probiotics company, PrecisionBiotics has been acquired by Danish biotechnology group Novozymes for a reported €80m.
PrecisionBiotics are clinically studied health supplement experts in probiotic IBS healthcare and nutritional products and have over 230 patents across numerous probiotic strains. University College Cork, Enterprise Ireland and venture capital firm Seroba Life Sciences are all shareholders.
Nasdaq-listed Novozymes manufactures and sells enzymes primarily to detergent makers such as Proctor & Gamble but also to the food & beverage and bioenergy sectors. However, this acquisition will give the company broader access to the $5bn probiotic supplement market while also providing the opportunity to develop new products that combine enzymes and probiotics.
Advisers: PrecisionBiotics was supported by the ByrneWallace team led by corporate partners Colin Sainsbury and Gillian O’Shaughnessy, with corporate fiance advice provided by Goodbody.
Renatus Comment: The human probiotic supplement market is an interesting space and is expected to grow by high-single digit percentages annually over the next 5 years. If this is the case, Novozymes’ will no doubt reap the rewards from its ‘better business with biology’ strategy which ushered it into the market in the first place.
Source: Novozymes
Deal Details: Dublin-based telephony, network and connectivity solutions provider Welltell is to acquire Irish firm Globanet Solutions, which trades as Novi.
The funding for the deal is supported by an additional £2.3m (€2.5m) investment by Duke Royalty into Welltell. This latest investment brings Duke’s total investment in Welltell to £10.5m (€11.6m).
Welltell employs more than 70 people and is led by CEO Ross Murray. Other backers include Maurice Healy (head of software group Glantus), John Quinn (co-founder of Jobbio) and John Ryan (former Calyx technology).
Novi was owned by George O’Dowd prior to this transaction.
Transaction details were not disclosed.
Advisers: Kieran Regan and Neil Nolan of ReganWall provided legal advice on the deal and Jackie Quinn of QCF Corporate Finance acted as corporate finance adviser to Novi.
Renatus Comment: This deal marks an all-time record for our newsletter, with Cork-based ReganWall recording five in a row of deals completed. Congrats to all the team.
The managed IT services space has been going through a lot of consolidation over the last few years. This looks like an interesting deal for Welltell and will expand their offering out from telephony to more traditional IT managed services.
Source: Irish Independent
Deal Details: Modular construction company ESS Modular has bought out its partners in UK school-builder Spatial Initiative and has taken full control.
Spatial was founded in 2016 in a JV between ESS and Styles & Wood. Styles & Wood’s parent company entered Administration in the UK in March. Spatial is part of an approved panel of contractors that will build new primary and secondary schools across the UK over the next four years.
ESS Modular was founded in Dublin in 1989 and employs more than 190 people across sites in London, Manchester, Belfast and Cork.
It is reported that a spokeswoman for the company said that combined businesses will have turnover of c. €90m. For 18 months to June 2019, the ESS Modular group (excl. JV) reported consolidated turnover of c. €62.6m and EBITDA of c. €0.4m.
Transaction details were not disclosed.
ESS Modular is owned by Ronan Smyth (30%), Paul Tierney (30%), Declan Murtagh (15%), Raymond Doyle (10%), Stevin Tedstone (5%), Martin Chambers (5%) and Shane O’Brien (5%).
Advisers: None Mentioned.
Renatus Comment: With its group entering into Administration, the buyout of its stake makes a lot of sense for ESS Modular and will allow it to remain in the running for potential lucrative government construction contracts in the UK. The upshot of Brexit may be increased capital investment by the UK government to provide fiscal stimulus and ESS Modular appears well-placed to benefit from new school building.
Source: Sunday Times
Deal Details: Orbis MES, a Dublin-based software business that develops solutions for businesses to track their manufacturing, has been acquired by US dairy supply chain software business Dairy.com.
Orbis MES was founded in 1998 by John Tobin who will remain with the business to lead the company’s Dublin office, which will now serve as Dairy.com’s European HQ. John Tobin was 100% shareholder of the business.
Transaction details were not disclosed.
Advisers: None Mentioned.
Renatus Comment: After an over 20-year journey building up his business, it is great to see an exit for Orbis MES founder John Tobin and the continued opportunity to remain with the business and help drive growth with the support of the US parent.
Source: Sunday Times
Following its acquisition by two US private equity firms, Madison Dearborn and HPS Investment Partners, Dublin-based insurance broker Arachas plans to double in size over the next 5 years.
Arachas will roll into UK insurance brokerage group Ardonagh, which is controlled by both Madison Dearborn and HPS. The expansion will be achieved through organic growth coupled with acquisitions.
There has also been continued speculation that the Ardonagh Group will file for an initial public offering.
Source: Irish Times
Monsoon Accessorize Ireland Ltd and its holding company Monsoon Accessorize Ireland (Holdings) Ltd. has been appointed a provisional liquidator by the High Court.
The women’s clothing and accessories retailer had 140 employees in its 10 Irish stores.
The company had experienced trading difficulties in the past followed by the closures due to Covid-19 seeing the sales figured drop by 92% year-on-year since March 1st to date.
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.
Frank Flanagan (Fittings) Limited trading as Flanagan Fittings is a furniture fittings company with over 40 years’ experience in supplying to Irish manufacturers. They offer a wide range of services to clients and stock in excess of 5k products.
In FY19, Flanagan Fittings saw revenue increase a strong 7.1% to c. €18.1m while EBITDA also increased by 5.5% to c. €2.0m. Net cash increased by c. €44.5k to leave an ending net cash balance of c. €1.2m. Working capital and loan repayments were the biggest drains on cash during the period.
The company had an average of 30 employees in FY19 at a total cost of c. €2.5m. The Company is owned equally by Paul (20%), Ian (20%), Glenn (20%), Emma (20%) and Niall (20%) Flanagan.
Based in Dundalk, Co. Louth, Exitex Limited is a leading developer and distributor of weather-proofing products for doors, windows conservatories and joinery applications.
In FY19, Exitex saw revenue increase by 3.5% to c. €15.5m while EBITDA decreased by 25.4% to c. €1.9m. c. 91% of revenue was generated through UK & Europe sales, while the remaining c. 9% was generated through Irish sales. EBITDA decreased due to an increase in the cost of sales which drove gross margins down c. 5% to c. 27% in its latest fiscal year. Net cash decreased by c. €605k to leave an ending net cash balance of c. €1.4m. The most significant movement was the loss on disposal of financial assets amounting to c. €1.6m.
The company had an average of 77 employees in FY19 at a total cost of c. €2.7m.
Based in County Meath, Jons Civil Engineering Holdings is a civil engineering contractor. JCEH carry out the majority of works through direct labour managed by experienced Civil Engineers. Services include earthworks, road network asset management and roads, bridges & rail works.
In its latest fiscal year, the company saw revenue decrease slightly by 0.7% to c. €36.6m but EBITDA increased significantly by 44.0% to c. €5.4m primarily due to gross margins increasing from 17% to 21.5%. The company had a net cash increase of c. €2.7m during the year with working capital being the biggest drain on cash leaving the company with a closing net cash balance of c. €26.1m.
The company employed an average of 112 employees in FY19 at a cost of c. €7.9m. The company is owned by John (50%) and Bernadette (50%) Pentony.
Who: Diageo, a global drinks giant, has announced it is to launch its Global ‘raising the bar ‘ fund.
What: The fund is a $100m (€89.26m) Global fund aimed to help pubs and bars following the challenge they faced during the lengthy shut-down of the sector. It is expected that €14m of the fund will be allocated to Ireland.
Why: The fund will provide the financial support that the hospitality sector desperately needs to facilitate its reopening under strict government guidelines. According to Diageo, this fund will be focused on the provision of equipment, implementation of new physical distancing measures and consumer hygiene provisions in bars.
Source: RTE
Who: UCD spin-out tech company PlasmaBound has raised funding in a multi-party investment round. The technology enables companies in various industries to achieve lightweight goals to meet carbon emission requirements.
What: The investment of €1.1m was led by the Atlantic Bridge University Fund, Enterprise Ireland, and several private investors. Plasmabound had legal advice from Cian O’Leary of Flynn O’Driscoll and Atlantic bridge received legal advice from William Fry.
Why: The fundraising will enable PlasmaBound to further develop its first-generation product offering and scale globally. According to Alan Barry, CEO of PlasmaBound, the technology took over 5 years to develop marking this as a ‘significant milestone’ for the company.
Source: RTE
Who: Dublin-headquartered Hostelworld has secured funding.
What: The accommodation booking platform has secured €15.2m following a round of share placement and subscription.
Why: Following a sharp decrease in trading volumes due to the coronavirus, the company is in need of additional liquidity. It has also agreed terms for a three-year revolving credit facility of €7m to ease the pressure on cash reserves.
Source: Irish Times
Who: OneProjects Ltd, an Irish – German medical device start-up, specialising in cardiac imaging has announced closing of a Series A funding round. The company is developing a breakthrough technology in the medical imaging field called VERAFEYE.
What: The joint investment of €11m is led by Netherlands based LSP Health Economic Fund 2 and Dublin’s Atlantic Bridge University Fund. Minority investors include Enterprise Ireland and some experienced MedTech angel investors.
ByrneWallace Life Sciences Corporate Partner Catherine Dowling advised OneProjects on this transaction.
Why: Focusing on conditions involving cardiac arrhythmias, the funding will be used to advance 4D product development, carry out clinical trials and prepare for US commercialisation of the system.
Source: Presse Box
Who: Dublin-based VentureWave Capital has completed a funding round. The fund is managed by Alan Foy and Kieran McLoughlin.
What: The private equity group has raised €20m in its first round of fundraising for a €100m fund, called Impact Ireland.
Investors include U2’s Adam Clayton and The Edge and former Taoiseach Enda Kenny chairs its global advisory council.
Why: The fund will invest in cloud-based technology companies that have a positive social impact in the education, healthcare, food & agriculture, energy, and environmental sectors.
Source: Irish Times
Who: Northern Irish green tech company, Artemis Technologies, headed by Olympic gold medallist yachtsman’s Iain Percy OBE, has raised funding for their new sustainable ferries.
What: It received a £60m (€66m) grant from the UK Research and innovation strength in places fund.
Why: The investment will allow it to develop zero emission ferries, through a high-tech electrical hydrofoil system in a step toward a more sustainable transport solution. Its aim is to ensure that Belfast is at the heart of this innovative green technology.
Source: Belfast Telegraph
Who: Sullivans Brewing Company, a Kilkenny-based artisan brewery, headed by Alan Quane.
What: It has completed a $1.26m (€1.13m) Series A fundraise. Backers include the Smithwick family and Enterprise Ireland. Funding raised to date is c $4.6m. The company’s CEO for its US business, Michael Meade, invested $1m into the business in 2016.
Why: Funding will be used for working capital, with growth targeted across the US and Europe.
Source: Sunday Independent
Who: Fleet, a Dublin-based car-sharing start-up founded by Maurice Sheehy.
What: €460,000 was raised through the UK-based crowdfunding site Seedrs and from several Saudi Arabia investors.
Why: Specific use of funding is not provided.
Source: Sunday Times
Who: Coindrum, a Dublin-based start-up that offers solutions for converting coins into redeemable vouchers or cash in retail stores and airport duty free.
What: €500,000 in bridge funding has been raised from existing investors, including entrepreneur Bobby Healy.
Why: Specific use of funding is not provided.
Source: 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 with details of key recent executive and board level appointments.
We listened to something during the week that quoted Jim Collins’ excellent book Built to Last.
Jim Collins’ “Good to Great” actually inspired the icon on our logo symbolising the journey we in Renatus go on with SMEs. Collins’ most striking metaphor in the book is that good companies are Time Tellers and great companies are Clock Builders.
This has become very prevalent in the COVID downturn. Some sectors are unaffected, some are affected beyond control, but there are some in the middle where the pack has separated and there are clear winners and losers.
Those who had already moved away from traditional channels and embraced digital before or early in COVID are more like Clock Builders, and didn’t rely on one channel. There is a good excerpt from the book here.
7.4%
The year-on-year decrease in the factory gate prices for May 2020, according to @CSOIreland
61.6
The KBC Bank Irish consumer sentiment index for June 2020, up from 52.3 recorded a month ago but below February’s pre-Covid figure of 85.2. @IrishTimesBiz
c. 33K
The week-on-week reduction in the number of people availing of the PUP amounting to 498,700 people needing the payment last week, according to Dept. of Employment Affairs and Social Protection. @ExaminerBiz
€600m
The amount spent by Irish consumers using contactless payments for May 2020, the highest monthly figure on record, according to Banking and Payments Federation Ireland. @RTEbusiness
62%
The year-on-year decrease in the mortgage approvals in Ireland for May 2020 amounting to nearly 1,900 mortgages worth a total of €442m, according to BPFI. @IrishTimesBiz
3.6%
The year-on-year increase in the national average earnings for 2019 rising to €40,283 from €38,871 in 2018, according to @CSOIreland
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