Renatus Weekly M&A & Company Performance Private Equity Newsletter 29/10/2023

Deal Details: The McCabes Pharmacy chain has been acquired by Phoenix Group, the owner of the Lloyds Pharmacy chain. Deal consideration was not disclosed. The new group will trade under the McCabes Brand.

McCabes Pharmacy is an online and community pharmacy business founded by Roy and Margaret McCabe in 1981. The business has 32 stores and is owned by Sharon McCabe. In FY Dec 22, it reported turnover of c. €64.1m which converted to an EBITDA of c. €4.1m.

Lloyds Pharmacy is an Irish pharmacy business with over 80 pharmacies located across the country. In FY Mar 22 it reported turnover of c. €144.6m which converted to an EBITDA of c. €9.9m. It was acquired by Phoenix Group in November last year, having previously been owned by McKesson Europe, an international provider of retail, wholesale and logistics to the pharmaceutical and healthcare sectors. The Irish businesses, owned by the Pheonix Group, include United Drug, Lloyds Pharmacy, Median Healthcare and TCP Homecare.

Phoenix Group is a German-based healthcare provider. The business has a presence in 29 markets and has 48,000 employees.

Advisers:
McCabes Pharmacy:
M&A Advisory: Deloitte team of James Toomey, Anya Cummins, Darian Rogerson, Sharne Reeves & Paul O’Neill.
Legal: Beauchamps led by John White, Damian Maloney, Maitiú O’Donaill, Anne Doyle, Patrick Nyhan and Laura Brophy.
FDD: Mazars led by Mark Mulcahy and Antoine Brunner.
TDD: Mazars led by Gerry Vahey and Fergal Cody.

Pheonix Ireland:
Legal: Arthur Cox led by Connor Manning, Eoin McCague, Kate Fahy, Patrick Horan, Sarah Gallagher, Ailbhe Ó Faoláin, Deirdre Barrett, Fiona Healy, Elaine Caulfield, William Hurley, Louise O’Byrne, Ciara McDermott, Elaine Mooney, Kevin Lynch, Claire Murnane, Sarah McCague, Alan Harney, Olivia Mullooly, Alison Peate and Laura Dunne.

Renatus Comment:  This deal follows McCabes’ acquisition of three Dublin pharmacies earlier this year. We have previously referenced the difficult trading environment that pharmacies in Ireland have faced over the past number of years in the newsletter. A recent study by Stuart Fitzgerald and Jim Power of Fitzgerald Power showed that the average revenue of a community pharmacy in Ireland fell by 24% between 2009-2022 with 25 pharmacies going out of business in 2022. However, it is clear that international backers see an opportunity to achieve synergies through consolidation in the industry, evidenced by this deal and others such as Uniphar’s €50m acquisition of McCauleys last year.

Source: Irish Times

Deal Details: Ekco has acquired Radius Technologies. Deal consideration was not disclosed.

Ekco is a managed cloud and cyber security services provider headquartered in Dublin. The business employs over 650 people with c. 400 based in Ireland. The company is led by Eoin Blacklock and Jonathan Crowe. UK-based private equity firm Corten Capital acquired a majority stake in the business in 2022. In Jan 23, it was reported that the business had exceeded €100m in annual revenue.

Radius Technologies is a Waterford-based managed service provider, specialising in end-to-end IT services for SMEs. The company was formed in 1996 and has offices in Dublin, Cork and Waterford. Clients include DJ O’Meara Solicitors, Orchard Warehousing and St Jarlaths Credit Union. The business does not report turnover or EBITDA information.

Advisers:
Ekco:
Legal: Dentons.
Tax: Deloitte.
FDD: Deloitte.

Radius Technologies:
Corporate Finance: EY led by Robert Hussey, Ronan Murray, Michael Murphy, Peter Twomey and Antoine Daubigny.
Tax: EY led by Frank O’Neill and Christine Kearney.
Legal: Flynn O’Driscoll LLP.

Renatus Comment:  Ekco has demonstrated impressive growth since its foundation in 2016, both through organic means and also through acquisition. This deal is Ekco’s third acquisition of this nature (companies that specialise in servicing the IT needs for organisations with up to 250 employees) in the last 18 months. The company has also been highly acquisitive in Ireland having acquired Ward Solutions in 2021 and Kontex and Caveo Systems in 2022.

Source: Irish News

Deal Details: Enerpower has sold a majority stake to Greenvolt. The deal value is reported to be c. €25m and is subject to regulatory approvals.

Founded in 2005, Enerpower is a renewable energy company based in Waterford and works for several large clients including PepsiCo, Lidl, Pfizer and Virgin Media. It also has power purchase agreements with companies such as Eli Lilly and Tesco. The business is led by Managing Director Owen Power. It does not report turnover or EBITDA information.

Greenvolt is a renewables company operating in the biomass, wind, solar, and distributed energy generation sectors. The group, headquartered in Portugal, spans across 17 countries with over 500 employees. The company trades on the Euronext Lisbon with a current market capitalisation of c. €829m.

Advisers:
Greenvolt:
Legal: McCann FitzGerald LLP led by Valerie Lawlor, Alan Fuller, Jerome Kennedy, Conor Gilheany and Clarissa Mulcahy.

Enerpower:
Legal: RDJ team led by Gillian Keating (Corporate and Commercial) and included Liam O’Keeffe, Elena Vassileva, Louise Buckley.

Renatus Comment: This acquisition reinforces Greenvolt’s Distributed Generation (DG) segment of renewable energy following the launch of Greenvolt Next Greece and the acquisition of a 37.3% stake in Solarelit in March 2023. The acquisition allows Greenvolt to enter Ireland’s DG market which is expected to experience significant growth over the next few years from government incentives to increase the proportion of energy generation from renewables to 80% by 2030. Both Enerpower and Greenvolt are likely to gain significant synergies from this acquisition and will accelerate the movement towards renewable energy within Ireland and abroad.

Source:  Irish Examiner

Deal Details: GMcG Chartered Accountants has acquired Jackson Andrews Chartered Accountants. Deal consideration was not disclosed.

The GMcG Group of practices comprises GMcG Belfast, GMcG Portadown and GMcG Lisburn. The group provides an array of audit, tax, corporate finance and advisory services to its clients across Northern Ireland. GMcG is led by Managing Director Susan Dunlop with this deal taking its headcount to over 100 employees. The group does not disclose revenue or EBITDA information.

Jackson Andrews is an accounting and advisory firm with offices in Belfast and Craigavon. The firm was created in 1970 following the merger of two local firms, further expanding following the acquisition of Magee Todd & Vaughan in 1994. The company does not report revenue or EBITDA information.

Advisers: None mentioned.

Renatus Comment: This deal further expands GMcG Chartered Accountants operations in the north. It follows the trend of acquistions in the financial & professional services sectors as outlined in the Q3’23 Renatus M&A Review. Significant consolidation is occurring within these sectors due to the potential for efficiencies of scale and enhanced market presence in a larger group. Following this deal, Bryan Friar and Michael McCarter, who headed up the Jackson Andrews practice, have taken up Associate Director positions at GMcG’s Belfast and Portadown offices respectively.

Source: Irish News

Deal Details: Behaviour and Attitudes (B&A) has been acquired by Ipsos. Deal consideration was not disclosed.

B&A is an independent research and insight consultancy firm operating in a range of sectors. The business, founded in 1985, is based in Dublin and is led by Managing Director, Luke Reaper who will take the role of CEO and Country Manager at the newly formed Ipsos B&A. B&A does not report turnover or EBITDA information.

Ipsos is a French-based research business that is listed on the Paris Stock Exchange and has over 5,000 clients. Current Managing Director of Ipsos MRBI (Ireland), Damian Loscher, will become President of the new company, Ipsos B&A. The group reported revenue of €2.4b in 2022.

Advisers:
B&A:
Legal: Beauchamps led by Shaun O’Shea, Sian Browne and Paul Gough.

Ipsos:
Legal: Simmons & Simmons led by David Brangam in Dublin with assistance from Jérôme Patenotte in Paris.
FDD: Mazars led by Mark Mulcahy, Anthony Shiel, Robbie Graham.
​​​​​​TDD: Mazars led by Gerry Vahey, Nicole Hanlon, Aaron Mee.

Renatus Comment: Ipsos initially entered the Irish market in 2005 through the acquisition of Mori MRC. The group later consolidated itself as a leader in the market through the acquisition of Market Bureau of Ireland Limited (MRBI) in 2009, which it still owns today, after the European Commission required WPP to sell MRBI due to competition reasons. This acquisition aligns with the Ipsos 2025 growth plan by “strengthening (their) leading position” as stated by CEO of Ipsos, Ben Page. Other deals in the space include The Business Post Group acquiring Red C Research in a deal worth a reported €7m during 2021.

Source: Independent

Deal Details: Pittman Traffic and Safety Equipment has been acquired by Bunzl plc. Deal consideration was not disclosed.

Pittman Traffic and Safety Equipment is a Kildare based supplier of safety equipment specialising in modular rubber traffic calming systems, bicycle storage and rebound bollards. The company has over 50 years of experience in the sector and employs c. 10 people from its warehouse in Athy. The business generated revenue of c. €7m in FY Dec 22.

Bunzl plc is a British multinational distribution and outsourcing company headquartered in London. The company employs c. 22,500 people across its operations in the Americas, Europe, Asia Pacific and UK & Ireland. In FY Dec 22, the company reported turnover of c. €12b which converted to an EBITDA of c. €1b.

Advisers:
Pittman Traffic and Safety Equipment:
Corporate Finance: Benchmark International led by Alex Cregan.
Legal: Smyth & Son
Accounting: FDC
Tax: Omnipro

Bunzl plc:
None mentioned

Renatus Comment: This deal brings the total number of acquisitions made by Bunzl in 2023 to 14. Total outlay on these deals was over £425m highlighting the group’s commitment to their growth through acquisition play. The acquisition of Pittman Traffic and Safety Equipment specifically supports the expansion of Bunzl’s North America based McCue business, which already has presence in the UK. Bunzl will be particularly interested in Pittman Traffic and Safety Equipment’s strong relationships with customers in the property and facilities management sectors as well as schools, government bodies and county councils.

Source: Benchmark International Press Release

Deal Details: Writech has acquired Firecon Group Oy. Deal consideration was not disclosed.

Writech is a Westmeath-based company that designs, manufactures, installs, and services fire systems. It was founded in 1981 by Mary and Thomas Wright. The business was acquired by international private equity firm Waterland in 2021. Ted Wright currently leads the business as CEO. In FY Jun 22, the business reported turnover of c. €42.2m which converted to an EBITDA of c. €9.1m.

Firecon Group Oy is a Finnish provider of automated fire extinguishing systems and HVAC solutions. It was established in 1981 and was acquired by Evolver Investment Group in 2010. The business had 73 employees and turnover of c. €17.5m in 2022.

Advisers:
Firecon Group Oy:
Corporate Finance: MCF Corporate Finance

Writech:
None mentioned.

Renatus Comment: Writech is pursuing an acquisition-led growth strategy, with this being its sixth announced deal since receiving private equity investment. Previous acquisitions include Ce Sprinkler (Sweden) and Compco Fire Systems (UK) last year, followed by three more deals announced last month – Ideal Fire (Ireland), Wilec Fire & Security (Ireland) and Jem Pumps (UK). Consolidation in the fire safety space is likely to continue as there is a high level of fragmentation and family-owned businesses make up a large portion of the market.

Source: LinkedIn

Deal Details: DMG Media Ireland has acquired Everymum. Deal consideration was not disclosed.

DMG Media Ireland produce digital and mobile content and market-leading newspapers in Ireland. DMG Media brands include Business Plus, the Irish Daily Mail, and MailOnLine. The group employs c. 140 people with 3.6m monthly digital users in Ireland. Paul Henderson is the current CEO of DMG Media Ireland. According to their latest corporate brochure, the company generates c. €1.3b in revenue globally.

Everymum was founded in 2000 and has become one of Ireland’s leading parenting websites. Everymum has a combined audience of over 1m across web, social and audio platforms. The business merged with Zahra Media Group, creators of the Ultimate Maternity Guide and the National Parenting Product Awards in 2017. In FY Dec 22, Everymum reported revenue of c. €1.1m.

Advisers:
Everymum:
Legal: ByrneWallace led by Feargal Brennan, Laura Sheehan and Zelda Deasy.

DMG Ireland Ltd:
None mentioned.

Renatus Comment: Media organisations seem to be diversifying. The Business Post has made a few non-media type acquisitions including Red C, a polling and research consultancy company. Mediahuis has also expanded its offering with acquisitions including Paramount Packaging,  Carzone.ie and Swtcher.ie to name a few. Along with Mediahuis, North-West News Group (NWNG) has been diversifying with the acquisition of  Belfast-based Kaizen Print, to offer a one-stop solution for the marketing, printing and digital needs.

A number of deals have taken place in Ireland’s Media & Entertainment sector in 2023 including Bonnier’s acquisition of a minority stake in The Business Post, Bauer Media’s acquisitions of Sales House Media Central and iRadio, and Bizet Media’s acquisition of High Wire Post Production.

Source: Business Plus

Deal Details: IPP Group has acquired Cupid Ltd. Deal consideration was not disclosed.

IPP Group is a Cork-based technical distributor of manufacturing equipment with a focus on the electronics, pharmaceutical and medical devices sector. The business does not ​​report turnover or EBITDA information. Jack Daly is currently Managing Director of IPP Group.

Cupid Ltd is a Basingstoke-based distributor of X-Ray, acoustic, optical and electronic test and inspection equipment. The business does not report turnover or EBITDA information.

Advisers: None mentioned

Renatus Comment: Ireland is the second-largest exporter of medtech products in Europe. According to Innopharma, 80% of the world’s stents and 50% of the world’s acute hospital ventilators are manufactured here. With the acquisition of Cupid Ltd, IPP Group will be expanding its medical distribution coverage across Ireland and the UK.

Source: Mepca Engineering

Deal Details: ICONI Software has been acquired by Banyan Software. Deal consideration was not disclosed.

ICONI Software is a Belfast-based business that creates personalised software for private, non-profit, charity & public sector organisations. The business is owned by Liam Jordan and Niall Doherty and it does not report turnover or EBITDA information.

Banyan Software is a US-based buy-and-hold acquirer of software businesses. Banyan has over 750 employees throughout the US, Canada, UK, Europe, Australia and New Zealand. Founded in 2016 with permanent capital to preserve the legacy of the founders.

Advisers:
ICONI Software:
Advisers: Raven Capital

Banyan Software:
None mentioned.

Renatus Comment: ICONI Software was formerly known as online Concepts (Ireland) Ltd., or iConcepts. After three years, Liam Jordan acquired the company, changing the company’s focus from online consulting to software development. Liam Jordan stated: “Joining Banyan represents a significant step forward for our company and our dedicated team. Banyan’s vision and expertise in the long-term growth of B2B software businesses make it the ideal home for our company”.

Source: Banyan Software Press Release

IBI Corporate Finance in sales talks with Daiwa’s DC Advisory

Deal Details: It is understood that Ireland’s leading M&A advisory firm, IBI Corporate Finance, is in talks over a potential sale to international investment bank, DC Advisory. DC Advisory is owned by Daiwa Securities Group Inc., a leading Japanese investment bank. This comes six years after the firm was sold to management by Bank of Ireland in a deal that valued the firm at c. €10m. IBI Corporate Finance has seen significant growth in recent years with any new deal likely to value the business significantly higher. Existing management and senior executives are expected to continue to lead the business under a new DC Advisory structure.

Source: Irish Times

Larry Goodman to take full control of insolvent Barryroe

Deal Details: Barryroe is an Ireland-based company, which is engaged in oil and gas discovery off the coast of Ireland. The business was placed into examinership in late July following an application by Vevan Unlimited, a Larry Goodman company with a reported 20% stake in Barryroe. Larry Goodman is now set to take control of Barryroe this week with a c. €6m investment, when the High Court signs off on a rescue plan for the business, which is insolvent and in examinership. The rescue plan will focus on a transition of Barryroe away from fossil fuel extraction and move its focus to renewable energy projects.

Source: Business Post

An interim examiner has been appointed to HealthBeacon

Deal Details: The High Court has appointed an interim examiner to Dublin-based medical technology firm HealthBeacon after hearing it had “run out of cash” and needed external funding to meet its payroll commitments on Friday. Its US partner, Hamilton Beach Brands, has agreed to provide €2m in working capital facilities. HealthBeacon raised €25m when it floated in Dublin in 2021, valuing at close to €100m. Its market capitalisation is now just over €1m.

Source: Irish Times

Breffni Building and Civil Engineering Limited is a provider of plant hire, construction, civil engineering, demolition, logistics, rail engineering, maintenance and consultation solutions based in Ballyhack, Co. Dublin. The business is entirely owned by the Flynn family.

In its financial year to Decmeber 2022, the business generated a turnover of c. €17.2m, an increase of 40.6% year-on-year. This converted to an EBITDA of c. €0.9m, an increase of 2.1% year-on-year. Revenue growth outstripping EBITDA growth is primarily attributable to a decline in gross margins year-on-year falling from c. 15.2% to c 12.8%.

Significant post-EBITDA cash movements include working capital movement of c. €1m. The business finished the year with a cash balance of c. €4.5m, an increase of c. €2.6m year-on-year.