Renatus’ Weekly M&A Newsletter – 07/02/2021
February 7, 2021Renatus’ Weekly M&A Newsletter – 14/02/2021
February 14, 2021
Renatus Weekly M&A & Company Performance Newsletter 31/01/2021
Dear Reader,
Please find below this week’s newsletter covering the latest M&A, company performance, fundraisings and executive moves.
M&A ACTIVITY
Engage EHS acquired by EcoOnline
Deal Details: EcoOnline, a leading provider of SaaS-based Chemical, Environmental, Health and Safety management software, has acquired Engage EHS. No financial consideration was disclosed but it is speculated to be in the region of €15 million.
Established in 2000, EcoOnline has expanded from being a well-established name for chemical management software in the Nordic region to also delivering comprehensive EHS solutions to the European and the US markets.
Dublin-based Engage EHS provides a multi-country cloud-based platform which specialises in environment, health and safety technology. Early investors in Engage EHS included ACT venture capital, Elkstone, Enterprise Ireland and the Boole and Bloom HBAN angel syndicates. BCD Safety and Business Support Limited trades as Engage EHS was primarily owned by Darragh Geoghegan, William O’Brien and Colm Geoghegan prior to the transaction.
Advisers: EcoOnline received legal advice from Wikborg Rein (Norway) and Ben Gaffikin and Elizabeth Maye of McCann FitzGerald.
Engage EHS shareholders received legal advice from Alan O’Driscoll, Laura Melody-Moran and Conall Ennis from Flynn O’Driscoll. A Goodbody team of Don Harrington, Dearbhla Gallagher and Chris McAuliffe provided corporate finance advice on the transaction.
Renatus Comment: During the Covid-19 pandemic EcoOnline experienced all-time high sales due to the increased focus on the importance of workplace safety. There is an accelerated adoption of new EHS technologies in the market. There are a lot of great B2B software solutions in the Irish market like this that fly under the radar and create a lot of jobs and returns for the Irish economy.
Source: Engage EHS
Chris Mee Group receives backing
Deal Details: Chris Mee Group, based in Cork and Dublin, has received investment from Erisbeg.
The Chris Mee Group (CMSE Safety Consultants and Trainers) is the largest provider of Health & Safety Consultancy, Recruitment and Training services in Ireland. The company specialises in setting up ISO 45001 accredited safety management systems and in providing Safety Consultants and Training services to global clients in the pharmaceutical, chemical, software and other sectors nationally. The business is led by its founder and primary shareholder, Chris Mee.
Advisers: Deloitte’s Financial Advisory team of Partner Ronan Murray & Director Derek Murphy provided M&A Advisory services to the Chris Mee Group.
Chris Mee Group was also advised by Coombes Corporate Finance (Finance), Quintas (Tax), and ReganWall (Legal).
Erisbeg was advised by Deloitte Dublin (Finance), EY (Tax) and L.K. Shields (Legal).
Renatus Comment: Accredited training is a very stable business given its necessity, and recurring nature and the ones with scale such as Chris Mee will have the resources to make the full digital pivot this new world requires.
Source: Chris Mee Group LinkedIn
Shell partners with Simply Blue Energy
Deal Details: Shell has signed an agreement with Irish developer Simply Blue Energy to acquire a 51% share of its Simply Blue Energy Kinsale venture.
The joint venture will see the development of the Emerald Project, a large floating wind farm off the south coast of Ireland. It will be operated by Simply Blue Energy, with support by Shell floating wind experts. The project office will be based in the Cork City Docklands rejuvenation area.
The project is in the early stages and aims to exploit the vast floating wind potential in the Irish part of the Celtic Sea.
Advisers: Fieldfisher acted for the vendor Simply Blue/Emerald, led by Partner Feilim O’Caoimh and supported by Elaine Traynor and Jamie Woodcock.
Eversheds advised Shell on the transaction, led by Peter O’Neill.
Renatus Comment: We report on a lot of wind farm deals in our newsletter. The high level of activity from both private and State actors is something that should be celebrated as we make the necessary transition to a sustainable energy future. We have come a long way since the first commercial wind farm was commissioned at Bellacorrick, Co Mayo in 1992, and the story is a great example of how private capital and State incentives can combine to create real social and economic value.
Source: Simply Blue Energy
Tenzing invests in MetaCompliance
Deal Details: Private equity firm Tenzing has invested in and is partnering with cybersecurity firm MetaCompliance.
Founded in 2005 by CEO Robbie O’Brien, MetaCompliance employs 110 people, servicing clients in the UK, Europe and internationally.
Through its cloud-based platform, MetaCompliance provides a fully integrated suite of compliance capabilities that includes policy management, privacy, eLearning, simulated phishing and risk management.
Advisers: The LK Shields team of Richard Curran (Partner, Corporate) and Ciara Doris (Associate, Corporate) acted for Tenzing Private Equity LLP.
Marks Baughan Securities LLC and Beltrae Partners (David McCloy) acted as financial advisors to MetaCompliance.
Tughans, led by Partner Paul O’Brien with support from Aimee Craig, Orla Drayne, John McGuckian, Rachel Richardson, Paul Eastwood, Sarah Sharkey and Jonathan Burden acted as legal advisor to MetaCompliance.
Renatus Comment: This is Tenzing’s 11th investment, and the first investment within their £400m Fund II, which was raised in 2020. The investment from Tenzing will enable MetaCompliance to continue to develop new, innovative products and expand its workforce.
Source: Tenzing
Star2Star acquired by Sangoma Technologies
Deal Details: Telco company Star2Star has been acquired by Canadian business Sangoma Technologies. Sangoma will acquire Star2Star for approximately US$437 million, consisting of US$105 million in cash and 110 million common shares of Sangoma. The transaction will be subject to approval by Sangoma shareholders at a special meeting of shareholders expected to be held in late March or early April 2021.
Florida-based Star2Star is the sole remaining portfolio company of StarBlue. Irish entrepreneur Alan Foy along with his US and Irish shareholders own StarBlue Inc. The company was created after the merger of Blueface, the Irish cloud telephony company formerly led by Alan Foy, and Star2Star. Blueface was recently sold to US telco giant Comcast.
Star2Star’s offerings include a comprehensive suite of voice, contact center, collaboration, integration, video meetings, Communications Platform as a Service (CPaaS), and Desktop as a Service solutions that work on any device from PC’s to desk phones to mobile softphones. For the trailing twelve months ended September 30, 2020, Star2Star generated approximately US$79.4 million of revenue, over 80% of which was recurring and US$14.7 million of EBITDA.
Sangoma Technologies Corporation is a leader in delivering cloud-based Communications-as-a-Service (“CaaS”) solutions.
Advisers: The shareholders of Star2Star were advised by a Mason Hayes & Curran team of David O’Donnell and Anne Harkin, an Ernst & Young team led by Rob Henson and Kieran Coffey and by Chris Miller of Troutman Pepper.
Renatus Comment: This sale marks the end of one chapter for Alan Foy and the beginning of another. Foy engaged in an MBI of Blueface in 2010 and oversaw significant growth including the acquisition of Star2Star which made the business a true international player. As Foy now exits one business venture, he scales up another with VentureWave, an Irish venture capital investor which is reported to have raised half of a targeted €100m and has already in invested in Drop Chef.
Source: The Business Post
GUDOG acquires Host My Pet
Deal Details: Irish-headquartered GUDOG has acquired Finish company Host My Pet. The consideration was not disclosed.
GUDOG is a peer-to-peer platform which connects dog owners with dog walkers and dog sitters. GUDOG came about after the merger between Irish start up HouseMyDog and Madrid-based GUDOG. HouseMyDog was set up by EY Entrepreneur of the Year finalists James and Timothy McElroy.
Host My Pet is effectively the Finnish equivalent of GUDOG and this acquisition continues GUDOG’s European expansion plans having already acquired Spanish company Pet&Net as well as German company Schnuff & Co.
Advisers: None mentioned
Renatus Comment: It will be interesting to see how pet minding services such as these perform in our new normal. On one hand, there are significantly more people now working from home which in theory should reduce demand for pet minding services. On the other hand, there has been a notable “pet boom” as many have welcomed a new four-legged family member since lockdowns began.
Regardless, the business model is a great one. The new GUDOG group will have 17 employees now serving 650,000 pet owners across Europe which shows the power of being able to leverage technology to scale revenue without having to scale overhead.
Source: The Sunday Independent
DEALS IN THE MAKING
AIB and Irish Life negotiate joint venture
It has been speculated that AIB is in talks to set up a life and pensions joint venture with Irish Life. This comes as AIB seeks to boost its income and product offering in an era when ultra-low interest rates are weighing on lending margins.
Source: Irish Times
Applegreen plans US acquisition
Irish forecourt retailer Applegreen is set to take full ownership of a venture conditionally awarded a 33-year lease to design, construct and operate 27 motorway service areas on the New York State Thruway in what will be a more than $300 million (€247 million) project. The venture was previously headed by British infrastructure giant John Laing which pulled out of the project. With new partners, Applegreen has now successfully sealed the project.
Source: Irish Independent
CapVest ponders sale of Valeo Foods
It has been reported this morning that London-based private equity firm CapVest is considering the sale of Dublin-based Valeo Foods. Valeo Foods is an Irish multinational producer of branded food and beverage products. The company has a portfolio of over 50 international food brands which are sold across 90 countries globally, including Rowse Honey, Odlums, Batchelors, Jacob’s, Balconi, and Kelkin. Revenue for the group is in excess of €1bn.
CapVest is led by Irishman Seamus Fitzpatrick did not respond to requested comment from media on the rumoured sale.
Source: The Business Post
EXAMINERSHIPS/RECEIVERSHIPS
Survival scheme approved for Cara pharmacy group
Ten companies in the Cara group of pharmacies will exit examinership next Monday which will save more than 150 jobs.
This comes after the High Court approved a survival scheme, which will also see €14 million being invested in the group and rent reductions being agreed with landlords.
Source: RTE
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
Ringaskiddy, Co. Cork-based Carbon Chemicals Group Limited (T/A The Carbon Group), specialises in the supply of chemicals, food ingredients and high-end paints. The Carbon Group take control of the full supply chain for customers, providing sourcing, storage, manufacturing and packaging.
In its financial year to December 2019, the business recognised revenue of c. €29.1m, an increase of 13.2% YoY. EBITDA also increased to c. €1.1m, up 32.4% YoY. Cash on hand at the end of the year stood at c. €1.2m, a decrease of c. €464k versus December 2018 with an investment in fixed assets of c. €396k and a working capital investment of c. €507k being two of the most signifcant cash investments.
Carbon Chemicals Group Limited is ultimately owned by Brian Walsh, Paul Cronin and Aiden Brady. The business employed an average of 48 persosns at a cost of c. €2.8m.
Founded in 1971, DPL Group Ltd offers a wide range of building materials to trade and public, specialising in mains and drains, heating, plumbing and general building products
In its financial year to December 2019, DPL Group recognised revenue of c. €54.1m, up 4.3% YoY. EBITDA decreased by 1.5% YoY as the business recorded c. €3.0m in EBITDA. Cash at the end of the year stood at €2.1m.
The group employed 185 during the year at a cost of c. €5.8m. DPL Group is owned by shareholders including Jeremiah Maher, Marian Maher, Orla Maher and Noel Keogh.
RECENT FUNDRAISINGS
Who: Quantum computers business Riverlane has secured funding.
What: Riverlane has raised $20m in Series A funding. The round was led by European technology venture capital fund Draper Esprit, and supported by existing investors, Cambridge Innovation Capital, Amadeus Capital Partners, and the University of Cambridge.
Why: Riverlane plans to use the funds to build out Deltaflow, its operating system for quantum computing, to expand internationally to the US, Europe and beyond.
Source: Draper Espirit/Riverlane
Who: Fast, a San Francisco-headquartered online checkout company has secured funding.
What: The company has secured a $102 million (€83.8 million) Series B funding round led by Addition and Stripe, with participation from existing investors Index Ventures, Susa Ventures, Sugar Capital and Jaren Glover. This is the second time that Stripe, founded by Irish brothers Patrick and John Collison, has led a funding round for Fast.
Why: With this latest round, Fast will double down on product expansion, reaching even more sellers through new use cases such as subscriptions and one-click online media purchases. Fast will also move into more markets outside of the US.
Source: Fast
Who: We.trade, a Dublin-headquartered blockchain banking consortium has raised funding
What: We.trade has raised c. €5.5 million. CRIF, an Italian provider of credit information has come on board as a backer in the latest funding round, putting in €2.5 million. Six of the platform’s existing backers including HSBC, La Caixa, Nordea and Santander, invested a further €3.3 million.
Why: It is believed the funds are to be used for product development and sales activity.
Source: Irish Times
Who: Technology start-up Exit Entry has raised funding. Exit Entry is an app that connect students with jobs. Students complete a detailed questionnaire focusing on their interest, skills and academics achievements and Exit Entry then recommends potential careers in Ireland.
What: It is reported to have raised €1m from private investors.
Why: The business plans to grow user to greater than 100,000 in 2021 from 45,000 users today.
Source: The Business Post
Who: Unify Ordering has raised funding. The tech start-up provides a wholesale ordering system for cafes and restaurants which is led by co-founder Barry McNerney. It is reported that c. 1,500 food retailers use the system today.
What: Unify Ordering has raised a reported €1m from Elkstone and Enterprise Ireland.
Why: The specific use of funds was not disclosed but it will most likely be used to fund the continued growth of the business.
Source: The Business Post
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.
Robert Pickerill
Source: (ROBUS)
THOUGHT FOR THE WEEK
This week’s Thought for the Week was inspired by Kestrel Capital’s weekly stat wrap up.
They noted that it took Apple 42 years from inception to become a $1tn dollar company. It then only took them another 20 weeks to become a $2tn dollar company.
We speak to so many founders who are turning >€5m and making >€1m of EBITDA who don’t realise that the hard work is largely done and the journey to double the existing is a lot shorter and painless than going from zero.
As we have done with some of our portfolio companies, we intend to help these leaders on this expedited growth journey with capital and strategic input.
@RenatusCapital Tweets
8.2%
The year-on-year increase in the volume of Irish retail sales in December 2020 when compared with the same month in 2019. According to @CSOIreland
23.7% & 63.4%
The respective year-on-year increases in the volume and value of contactless payments in Ireland during Q4 2020, accounting for 174m payments worth €2.8bn. According to @BPFINews
4.5%
The year-on-year decline in consumer lending for 2020, compared to growth of 4% in 2019. According to @centralbank_ie
43,151
The total sum of mortgages that were approved in Ireland during 2020 to the value of €10.34bn, with the value of these approvals down 6.7% year-on-year. According to @BPFINews
5.5%
The revised upwards IMF forecast for growth in the world’s economy in 2021, based on the rollout of vaccines and financial support packages deployed by governments. This is up 0.3% on its forecasts made last year. According to the @IMFNews
24.5
The year-on-year decline in Bank of Ireland’s Economic Pulse for January 2021, with a reading of 61.6. The index combines the results of the consumer & business pulses. According to @bankofireland
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ABOUT RENATUS
Renatus was established in 2014 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 typically in the range of €5m – €20m. Our typical solutions include:
- Succession planning
- Management buyouts
- Management buy-ins
- Growth financing – both organic and acquisition growth financing
- Full and partial share sale.
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