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Renatus’ Weekly M&A Newsletter – 21/07/2019
July 21, 2019
Renatus’ Weekly M&A Newsletter – 18/08/2019
August 18, 2019
July 28, 2019

Merit Group is acquired by Dods Group, Kevin Lagan acquires majority stake in UK company, AxFlow announces double acquisition, an array of fundraisers and much more in this weeks Renatus Weekly M&A & Company Performance Newsletter.

Renatus Private Equity Dublin, Ireland

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.

M&A ACTIVITY

Merit Group acquired by Dods Group

Deal Details: London-listed Dods Group has acquired Merit Group for €25m.
Merit Group, founded in India by Leitrim man Con Conlon 15 years ago, provides industry research, big data and technology services to clients in multiple industries. Headquartered in Chennai,  India with facilities in London and Sri Lanka, it employs c. 1000 people. Last year the group reported revenues of over €10m (£9.2m).

Dods Group is an AIM-listed company with headquarters in London. The company provides monitoring, research and training services, as well as holding events and publishing titles. It reported revenues of €23m (£20.6m) last year.

Advisers: None Mentioned

Renatus Comment: 
The Leitrim observor dug into this story and had a great report including the following paragraph:

With a couple of years experience under his belt, Con set up the Merit Group. He gathered investors from Leitrim, Cavan, Monaghan, and Meath as well as in the UK. Investors “took a punt” he said and trusted between €20,000 – 75,000 each in the business. Con said he was lucky to have such supporting investors, “we needed their help a few times and they were always so positive.”

“They are reaping the benefits today, most received 15 times the money they put in” but Con acknowledged it was high risk at the time, and “they have received a generous return and I am personally and professionally delighted for them.”

Source: Irish Times and Leitrim Observor

Kevin Lagan acquires majority stake in UK timber frame manufacturer

Deal Details: Kevin Lagan bought majority stake in Frame-Tech for an undisclosed sum through Lagan Investments, which he established after selling his building materials company for €510m in 2018.
Frame-Tech, which manufactures more than 1,000 residential units per year, had earnings of €3.3m for the year ended June 30th and turnover of about €14.5m. The deal is expected to create synergies with Lagan’s FastHouse operation, which specialises in the rapid construction of homes.

Advisers: None Mentioned

Renatus Comment: 
We recently reported on BAM’s investment in Modern Homes Ireland. With labour proving difficult on site and speed being of essence expect to see more growth in off-site building of houses.

Source: Irish Times

AxFlow Holding AB acquires Induchem Group

Deal Details: AxFlow Holding AB has acquired Irish Induchem Group. The value of the deal was not disclosed.

AxFlow Holding AB supplies fluid handling products, as well as provides services to chemical and petrochemical, food and beverage, pharmaceutical, and water and waste water industries in Europe
Induchem Group, headquartered in Cork, is a specialist provider of fluid handling solutions, which predominately focuses on valves, pipe solutions, mixers, and pneumatics.

Advisers: Deloitte’s regional Financial Advisory team including Partner Ronan Murray and Associate Director Derek Murphy, provided sell side support to the shareholders of Induchem.

Source: AxFlow

AxFlow Acquires Irish Pumps & Valves Ltd

Deal Details: AxFlow Ireland has announced its acquisition of Irish Pumps & Valves Limited for an undisclosed sum.

AxFlow group is the largest distributor of positive displacement pumps and related products and services in Europe.
Established in 1998 Irish Pumps & Valves is a Carlow-based major supplier of valves, actuators, pumps and ancillary equipment to the wastewater, power generation and process industries.

Advisers: None Mentioned

Source: AxFlow

United Oil and Gas acquires Egypts Rockhopper Energy

Deal Details: Irish exploration company United Oil & Gas (UOG) has acquired Egypt-based Rockhopper Energy in a reverse takeover in a €14.3m deal.
UOG is an independent oil & gas start-up established in 2015 by former Tullow Oil team.
Rockhopper Energy has been operational in Egypt since 2016 and the company has a 22% interest in the Abu Sennan concession.
UOG will fund the deal partly through proceeds from the recently announced $5m sale of one of its North Sea licences; a share placing; and an $8m loan from BP.
Additionally, UOG has struck a deal whereby BP will have first call on any oil and gas produced from UOG’s other licences in the UK, Jamaica and Italy.

Advisers: None Mentioned

Renatus Comment: 
Brent Crude started the year just above $50, peaked at just below $75 and is now trading at $63. For three and a half years from ’11 to ’14 it lived over $100. A bit like the good developers these guys probably make the investment work on today’s rate and enjoy any windfall that a higher oil price might bring.

Source: United Oil & Gas; Irish Examiner

DEAL UPDATES

Finnish manufacturer to buy part of Quinn Radiators

Deal Details: Rettig ICC, a home-heating business that is part of the Finnish Rettig Group, has agreed to buy the decorative tubular steel business of Quinn Radiators. Quinn Radiators appointed Grant Thornton as administrator after the business went into administration last month.

Source: The Sunday Times

DEALS IN THE MAKING

Irish firm beats Brexit with €333m London let

Deal Details: Irish property firm Aldgate Developments has sealed a 15-year lease, understood to be close to £300m (€333m), to let a new headquarters in London to telecoms giant BT.
The former UK telecoms monopoly agreed a deal to move 4,000 staff to a new 320,000 sq ft, 18-storey building near Aldgate East station on the edge of the City of London financial district.
The building is currently under construction by Aldgate Developments – a property business controlled by Irish developers Conor Molloy, Niall Molloy and Oisin Quinn.

Source: Irish Independent

Fineos on course to become Australia’s biggest listing this year

Deal Details: The market for initial public offerings has shown signs of strengthening after  Fineos, the Irish insurance software company, priced at the top of its range yesterday with share prices between €1.24 and €1.55, setting it on track to list as a business worth about €435m. The business will list on August 20 after its bookbuild yesterday.

Source: The Australian

EXECUTIVE & 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 details of key recent executive and board level appointments

Pinsent Masons appoints Michael Finn as partner in Dublin
Pinsent Masons has announced the appointment of life sciences and technology litigation specialist Michael Finn as a partner in Dublin.  Mr Finn will join the firm from Matheson, where he currently leads its IP disputes group and previously established its life sciences regulatory and litigation practice. He will work alongside IP and data litigation specialist Ann Henry in Dublin.

Mason Hayes & Curran appoints John Farrell as technology partner
Mason Hayes & Curran has announced the appointment of John Farrell as a partner in the firm’s technology team.  Mr Farrell  specialises in large scale technology projects, as well as providing strategic advice on privacy, e-commerce, Blockchain, AI and connected devices.   Mr Farrell was previously a senior associate with Mason Hayes & Curran. He is also a lecturer for the Law Society of Ireland in the area of technology, privacy and commercial contracts.

Euroclear UK and Ireland appoints interim CEO
Euroclear has named the chief compliance officer of its joint venture with DTCC, Christopher Elms,  as interim CEO. Mr Elms, who had spent three years as chief risk and compliance officer for the DTCC-Euroclear Global Collateral project, will assume the role as the search for a permanent appointee is finalised. Mr Elms has spent over 20 years with the central securities depository in a range of roles including ground head of service control, head of IT production services UK and head of internal audit.

Garry Moroney appointed new CEO of Roomex
Roomex has announced the appointment of Garry Moroney as the new Chief Executive Officer. Previously, Mr Moroney was the founder and CEO of two successful companies in Clavis Insight and Similarity Systems.

Pinergy appoints Esme Murphy as Energy Advisor to Retail and Leisure Sectors
Pinergy, the award winning smart energy provider, has announced the appointment of Esme Murphy as the company’s Energy Advisor to the retail and leisure sectors. Miss Murphy joined Pinergy in 2018 as the company’s Corporate Sales Manager for South Dublin, Wicklow and the South East Region. Esme has over 18 years’ experience within the area of Sales and Account Management and has industry expertise in new business development and retention and engagement of new clients.

TJ Sullivan will succeed Peter Fleming as chairman of Carbery Group
TJ Sullivan, chairman of Drinagh Co-op joined the Drinagh board in 2014, becoming vice-chairman in 2016, at which time he also joined the Carbery board. He has chaired Drinagh since 2017. He is a dairy farmer from Urhan on the Beara Peninsula in West Cork.

COMPANY PERFORMANCE

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.

Galgorm Spa & Golf Resort, based in Antrim, is one of Ireland’s premier luxury hotels, boasting 122 bedrooms. For FY18, the hotel saw revenue increase by 8.3% to c. £22.5m while EBITDA increased by 4.1% to c. £5.5m. Hotels are a labour intensive business model, evidenced here by Galgorm’s 493 employees which cost £9.2m, an increase of £840k versus FY17. This was likely part of the reason that gross margins decreased to 38.4% from 40.6% in FY17. EBITDA was not converted to cash however as cash reserves decreased by c. £484k to stand at c. £427k after significant investments in fixed assets. There was an outstanding debt balance of c. £10.1m at the end of FY18 and net assets stood at c. £10.7m.

Lifestyle Sports is one of Ireland’s most recognisable sports retailers. These accounts represent Lifestyle’s Republic of Ireland operations where the majority of their trading takes place. Despite revenue increasing by 4.3% to c. €107.6m, EBITDA decreased by 9.4% to c. €9.3m. Gross margins were flat at 46.2%, however, there was a c. €3.2m increase in selling & distribution costs that drove the disparity between revenue and EBITDA. Cash also decreased over the year as there was an cash balance at year-end of c. €6.2m, down from c. €11.8m in FY17. Net assets at the end of the year were c. €30.8m for the business which is owned by Stafford family members including Kathleen, Victor, Barry, Mark, among others.

D&M Pharmacies Limited trades as Adrian Dunne Pharmacy which operates 12 stores in the Leinster region. In its most recent financial year, the group saw revenue remain essentially flat at c. €19.9m while EBITDA decreased by 14.1% to c. €2.8m. The directors noted that they believe turnover will remain stable for the forseeable future and they will be focused on controlling costs. EBITDA converted to a net cash decrease of c. €305k after a loan repayment of c. €1.8m along with working capital movements proved to be significant drains on cash. Adrian Dunne Pharmacy is wholly owned by Adrian Dunne and had net assets of c.€17.4m at the end of FY18

RECENT FUNDRAISINGS

Who: Oncomark, a Dublin-based medtech startup, founded in 2007 by William Gallagher and Steve Penney, has received fresh funding.
 
What: €4.2m has been backed by FSIL Finance and a number of individuals and angel investor networks, including Irrus Investments and the Halo Business Angel Network’s medtech syndicate, have also invested.

Why: The startup is developing a prognostic test called OncoMasTR for early-stage breast cancer.

Source: Fora

Who: Aperee, a new investment fund by Cork-based investment firm Blackbee, seeks funding.

What: €250m is being targeted from both institutional and professional private investors and around €30m has been raised to-date.

Why: Funds will be used to purchase and develop care homes in Ireland.

Source: Irish Independent

Who: Eddie O’Connor, a wind energy entrepreneur seeks investment.

What: First funding round aims to raise up to €10m.

Why: The funds will be used to start off new renewable energy venture Supernode, led by CEO John Fitzgerald.

Source: Irish Times

Who: Dublin-based fintech company Assure Hedge, founded by Barry McCarthy in 2016,  has raised funding.

What: €1.62m fundraise was led by chairman Richard Hayes and Rob Smith by c. €600,000 each. A number of angel investors also backed the start up.

Why: The start-up is aiming to double headcount over the next year to 30 people as it seeks to build on an increase in business, largely due to Brexit uncertainty.

Source: Irish Times

Who: Siro, an Irish broadband provider, has secured funding.

What: €200m has been provided from a syndicate of five international banks including Ulster Bank, NatWest, HSBC, BNP Paribas and Royal Bank of Canada.

Why: The proceeds will be used to accelerate the company’s business plan to connect 450,000 homes and businesses to a full fibre one gigabit (1,000 megabits) service.

Source: Irish Times

Who: Linked Finance, a peer to peer lending group, has raised finance.

What: €1.2m was raised from a group of over thirty investors including many of the existing backers of the business.

Why: The capital raised will help grow the business which is planning to double its work force to 50 people.

Source: Irish Times

Who: Axial3D, a Belfast software development start-up has raised funding.

What: €2.7m funding was raised from lead investor, London based Imprimatar Capital Fund Management and a consortium of surgical angel investors in the US.

Why: The funding will be used to focus further on North American and European markets.

Source: Irish Times

THOUGHT FOR THE WEEK

When you look at the ISEQ index you can draw a line to the founders of the many great success stories from Kerry, CRH, Ryanair, Total Produce, Kingspan, Smurfit, Flutter entertainment (nee Paddy Power) etc.

Most of the aforementioned have books written to chronicle their ascent. Flutter which emanated from Paddy Power has had no book written and anytime the founders speak about the origins and early days it is fascinating. Stewart Kenny founded Paddy Power with the recently deceased John Corcoran and this quote from his Obituary was very interesting and reminds us all that the next 12 months financials, while important, is not the only measure to judge a company. Kenny said re Corcoran
“He came up to me outside the old Department of Industry and Commerce building in Kildare Street, and said ‘I’ve got this great idea; we’ll be prepared to get market share, not short-term profits . . . if we go for market share, and they [the British] go for short-term profits, there can only be one winner.”

@RenatusCapital Tweets

3.4% 

The year-on-year increase in number of trips to Ireland by overseas residents for June 2019, representing a total of 1,061,800 trips during June.
@CSOIreland

8.7% and 11.5% 

The year-on-year increase in the volume and value of mortgage drawdowns, respectively, for Q2 2019, according to the Banking & Payment Federation Ireland.

€6.2bn

The value of problem loans sold by lenders in the Republic of Ireland so far this year, driven by a massive AIB non-performing loans disposal. According to US investment bank Evercore.
@IrishTimesBiz

4% 

The y-o-y decrease in total job postings across all industries for the three months to June 30. According to (link: https://go.renatus.ie/e/512701/2019-07-28/35f56s/299096025?h=GQqZkDZaLI80pyrFsUofiVsP-G0XgroXeeZVMtLPdUU) IrishJobs.ie
@IndoBusiness

ABOUT RENATUS

Renatus was established in 2014 by Mark Flood and Brendan Traynor to provide growth funding to growing Irish SMEs and to partner with ambitious management teams to help companies reach their full potential.
Renatus targets companies with sustainable earnings of €1m+ and valuations of €5m and above. Our typical solutions include:
  • Succession Planning
  • Management Buyouts / Buy-Ins
  • Funding for organic growth
  • Acquisition Funding; and
  • Share Sales
Management Partners
Business Owners

OUR INVESTMENTS

LEARN MORE…

Renatus’ Knowledge Centre

Our Knowledge Centre is filled with insights from some of Ireland’s top business leaders on Succession Planning, Management Buyouts / Buy-Ins, Growth Financing and much more.

Visit the Knowledge Centre

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    Adrian Stackpoole, Digital Marketing Associate

    • Adrian joined Renatus in 2018, initially as a Marketing Executive before moving into the role of Digital Marketing Associate. As part of his role, Adrian manages all the digital marketing aspects of Renatus as well as conducting digital research for portfolio companies.
    • Adrian holds with a BBS degree in Marketing and Entrepreneurship from the University of Limerick, as well as a Postgraduate degree from The Digital Marketing Institute.
    • Prior to joining Renatus, Adrian worked in New York with a start-up hospitality group, specalising in marketing and operations.
    TIERNAN O’HAGAN

    Tiernan O’Hagan, Associate

    • Tiernan recently joined Renatus Capital Partners as a Private Equity Associate. As part of his role, he researches and analyses the potential of new investments and acquisitions
    • Tiernan graduated with a B.Sc in business and law from DIT Aungier street & an MSc. in Entrepreneurship from Trinity College Dublin.
    • Previously worked with Capnua Corporate Finance for three months during a summer internship.
    • Tiernan is also in the process of sitting ACCA exams.
    Bronagh Kearns Renatus

    Bronagh Kearns, Associate

      • Bronagh recently joined Renatus as a Private Equity Associate. As part of her role, she will be researching and executing investment opportunities.
      • Bronagh holds a MSc in Quantitative Finance from UCD Michael Smurfit Business School and a BSc in Finance from University College Cork. Currently, Bronagh is in the process of obtaining the ACCA qualification.
      • Prior to joining Renatus, Bronagh worked as an Investment Banking Analyst in Rubicon Capital Advisors where she worked on M&A transactions on the execution side and financial modelling in the infrastructure sector. She also worked as an Investment Associate in River and Mercantile Solutions in London quantitatively screening different investment opportunities across all asset classes.
    Alan Manning Renatus

    Alan Manning, Associate

    • Alan joined Renatus Capital Partners in September 2021 as a Private Equity Associate. As part of his role, Alan researches and analyses potential investments and acquisitions.
    • Alan holds a B.Sc Finance from University College Cork.
    • Previously working in KPMG’s Consulting division, with the Financial Management Consulting team. During his time there he was engaged on a Finance Function Review for a European Travel Technology firm, and a review of the cash management strategy of an Irish Commercial Bank.
    • In the process of sitting ACCA exams.

    Conor Hall, Associate

    • Conor joined Renatus Capital Partners in June 2018 as a Private Equity Associate. As part of his role, Conor researches and analyses potential investments and acquisitions.
    • Conor holds an M.Sc. in Quantitative Finance from UCD Michael Smurfit Graduate Business School and a B.Sc. in Economics & Finance from UCD. He is currently working towards attaining the ACCA and CFA qualifications.
    • Prior to joining Renatus, Conor worked as an Analytics Analyst with Accenture, specialising in predictive modelling for fraud.

    Kyle Barry, Associate

    • Kyle joined Renatus Capital Partners in June 2016 as a Private Equity Associate. As part of Kyle’s role, he researches and analyses the potential of new investments and acquisitions.
    • Since joining, Kyle has worked on numerous transactions, including Simtech and Rennicks, and has worked with Renatus’ investee companies on a number of strategic projects.
    • Kyle holds an MSc. in Quantitative Finance (University College Dublin) and a BA Finance (Maynooth University). Currently, Kyle is in the process of completing the ACCA qualification.
    • Prior to joining Renatus, Kyle spent 15 months in Intel’s Finance department where he worked across the financial reporting, tax and capital financing teams.

    Philip Gardiner, Associate Director

    • Philip is an Associate Director with Renatus Capital Partners, having first joined the firm as its first employee in 2014.
    • Philip has responsibility for screening, assessment and structuring of new acquisitions.
    • He has worked on a number of transactions at Renatus including Boojum Mexican Restaurants and Simtech Aviation. Philip works actively with the boards of Boojum and Simtech Aviation.
    • Prior to joining Renatus, Philip spent four years in AIB’s corporate banking team where he worked on a mix of real estate and cash flow lending deals.
    • Philip is a member of the ACCA and holds an MSc. in Financial Services and a Bachelor in Business Studies, both from the University of Limerick.

    Jane Martin, Marketing and Administration Manager

    • Jane joined Renatus Capital Partners in June 2019 as a Marketing and Administration Manager. As part of Jane’s role, she writes the weekly newsletter, works on the CRM and looks after the admin and ad hoc tasks
    • Prior to joining Renatus, Jane worked as a Senior Account Manager in Mace Promotions where she worked closely with many SMEs as well as large corporations on their marketing projects

    Mark Flood, Director

    • Mark co-founded Renatus with Brendan Traynor in 2014. Prior to establishing Renatus, Mark spent seven years on the senior management team of the Racing Post in various operational and commercial roles. Before founding Renatus, Mark was Managing Director of the Racing Post’s Irish operation.
    • Prior to his career in the Racing Post, Mark was the first employee of FL Partners, an Irish based international private equity firm, where he was actively involved in over €300m worth of transactions.
    • Mark combines his financial, operational and commercial experience to bring value and energy to all partner companies.
    • Mark is a Chartered Accountant and holds a Bachelor of Commerce and Masters in Accounting from NUI Galway.

    Brendan Traynor, Director

    • Brendan is a co-founder of Renatus. Prior to establishing Renatus, he was a Director in BDO Corporate Finance specialising in M&A, MBO’s/MBI’s, debt and private equity fundraising across a diverse range of sectors and clients.
    • His career focus and passion is the Irish SME sector and his deal expertise covers sectors such as retail, manufacturing, FMCG, healthcare, avaiation, media, medical devices, food and agriculture, construction, and hotels and leisure.
    • Brendan is a Chartered Accountant and holds a Bachelor of Commerce from University College Dublin

    Conor Mehigan, Associate Director

    • Conor joined Renatus Capital Partners in 2021 as an Associate Director. Conor has responsibility for screening, assessment and structuring of new investments and acquisitions.
    • Prior to joining Renatus, Conor spent five years in IBI Corporate Finance specialising in M&A, debt and private equity fundraising for private and public companies across a range of sectors. Prior to his career in IBI Corporate Finance, Conor spent four years in Deloitte’s Corporate Finance Division, specialising in Transaction Services
    • Conor is a Chartered Accountant and holds a BSc in Finance from University College Cork

    Greg Dilger, Strategic Advisor

    • Greg Dilger is a former Executive Director of NCB Stockbrokers and Investec Wealth & Investment.
    • He is an investor and advisor to Renatus and brings years of relevant experience to our team.
    • Greg is also currently a Non-Executive Director of Brewin Dolphin Ireland.
    Patrick Dooley Renatus

    Patrick Dooley, Associate Director

    • Patrick joined Renatus in November 2022 as an Associate Director. Patrick has responsibility for screening, assessment and structuring of new investments and acquisitions.
    • Patrick previously held leading positions in Focus Capital Partners, PKF O’​Connor, Leddy & Holmes & EY.
    • Patrick is a charted accountant and holds a Bachelor of Accounting and Finance degree from DCU, along with a Masters degree in Accounting from TUD.

    John Dwyer, Chairman

    • John joined Renatus in 2018 as a Chairman. Prior to Renatus, John spent 30 years at PwC in the UK, 20 years as a Partner, John led the UK and Global Deals business at PwC and was an executive board member of the UK firm.
    • Prior to that, John led the UK and Global Private Equity business at PwC and worked with firms including 3i Group, Apax Partners, CVC Capital Partners and Cinven.
    • John is married to Natasha and they have three children. John works between Dublin and London and his charity work includes chairmanship of Irish Youth Foundation UK.
    • He is an advisor and Board member of Irish digital marketing firm Pigsback and media firm Racing Post.
    • John is a Chartered Accountant and holds a Bachelor of Commerce from UCD.