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: Eir has agreed to sell its mobile telecom infrastructure management business Emerald Tower to Phoenix Tower International for €300m.
Eir is the leading telecommunications services provider in Ireland, offering broadband, voice, TV, and data services to residential, corporate and government segments.
Eir Group generated total revenue of €1.249bn and adjusted EBITDA of €578m for the year ended 30 June 2019.
Eir will retain ownership of the base stations, antennae and all telecom-related equipment, including fibre.
Following this transaction, Blackstone-backed Phoenix, founded in 2013, will own and operate in excess of 9,000 towers, 986 km of fiber and over 80,000 other wireless infrastructure and related sites, majority of which are in the Americas.
Following the deal, which is expected to close at the end of the summer, Phoenix will be the largest tower infrastructure provider in Ireland.
Advisers: Bank of America acted as financial advisor to Eir, while Paul Hastings and A&L Goodbody’s Mark Ward and Charles Carroll acted as legal advisors. KPMG also acted as advisor to Eir.
Freshfields Bruckhaus Deringer and Arthur Cox acted as legal advisors to PTI.
Renatus Comment: There is a dichotomy in telecoms values. Telecom infrastructure with long-term contracts trade at 15-20x plus and can be compared to a commercial building yet core telcos as an entire business can hover at 5x EBITDA due to downward pressure on pricing as a whole in wider sector. Eir’s counterpart in the UK, BT, trades at sub 4x EV/EBITDA.
Source: Phoenix Tower International
Deal Details: Celtic Rugby DAC has agreed a deal to sell 28% minority shareholding in the Guinness PRO14 League to CVC Capital Partners Fund VII in return of an investment of about £120m (€130m).
The PRO14 covers five countries and 14 clubs across Wales, Scotland, Ireland, Italy and South Africa.
As part of this agreement, the Federazione Italiana Rugby (FIR), will also become a member of Celtic Rugby DAC, and receive a share of the investment.
CVC is a world leader in private equity and credit with $82.4bn of assets under management, $134.5bn of funds committed and a global network of 23 local offices. It is majority owned by its employees and led by its Managing Partners.
CVC was selected by PRO14 Rugby and the unions as its partner due to the extensive experience of prior CVC funds investing in multiple sports businesses, such as Formula 1, Moto GP and Premiership Rugby.
Advisers: Mark Ward of AL Goodbody provided legal advice to CVC.
Renatus Comment: CVC will be hoping that the success they experienced with Formula 1 can translate to rugby.
Rugby globally has long struggled to find an optimal calendar for its domestic and international games all while managing player welfare. The tug-of-war between individual unions and with private owners have been one of the primary causes of this struggle.
By taking a seat at the table of each of the stakeholders (Six Nations, Pro14 and the Premiership targeted so far), CVC hopes that it can be a catalyst for change. Initial plans that have been touted are a new global calendar, a “Club World Cup” and a global bundling of commercial TV rights.
It will be a fascinating case study to watch play out over the coming years and hopefully one that leads to a better product for fans.
Source: CVC Press Release
Following last week’s incorrect coverage in the media we are delighted to report that office supplies business Spicers Ireland has been rescued following an acquisition by Paragon Group from liquidators EY.
The sale of the business includes the trade and stock and will see Paragon Group take assignment of the lease of the Spicers Ireland depot at Citywest, Co. Dublin. This transaction will safeguard a number of jobs and secures a future for the Spicers brand in Ireland.
Source: Paragon Europe
Managing Director of Kirby Healy Chartered Accountants, Myles Kirby, was appointed as receiver on May 26 for a single asset owned by Victoria Homes in Co. Kildare. Kirby was also appointed receiver on the 19th of May to the Corrybeg Way Development of 16 homes near Templeogue which is a Ladywell Homes development. Ladywell Homes is a Victoria-linked company.
The receiver for the single asset in Kildare stems from a mortgage between Victoria Homes and funds Emerald Sky and Lotus Decalia (both funds are linked to Lotus Investments Group, an Irish based private equity firm for property and construction finance). The mortgage was dated 15th November 2018.
The receiver for Ladywell Homes stems from debentures and mortgages dating back to 2016 and were also linked to the funds mentioned above.
Patrick Byrne and Daniel Whelan run both companies.
Source: Irish Independent
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.
Strathroy Dairy Limited is one of Ireland’s longest established dairies. The company is based in Co. Tyrone and has a distribution centre in Dublin which covers the entire island of Ireland and supplies selected retailers, multiples and caterers as well as the restaurant and hospitality sector.
In FY19, the company had a solid year which saw revenue increase by 7.9% to c. £83.6m and EBITDA increased by 14.6% to c. £1.6m. Cash in hand stood at c. £330k with an overdraft facility in place amounting to c. £2.3m leaving a negative closing net cash balance of c. £2.0m.
The company employed an average of 151 employees during the year at a cost of c. £5.0m. The company is owned by Ruairi (30%), Patrick (30%), Michael (10%), and Cormac Cunningham (10%), as well as Kate Louise McMahon (10%) and Rachel Moran (10%).
Noyeks Ltd trades as Noyeks Newmans, which has been supplying the Irish market with timber panel products, sheeting, kitchens, flooring and other accessories for over 125 years.
In the group’s financial year to November 2019, revenue increased by 7.1% to c. €30.1m while EBITDA decreased by 32.7% to c. €1.5m. Net cash decreased by 62.3% to c. €263k.
An €800k increase in administrative expenses were the primary driver of EBITDA decrease. Of this, an extra €388k was spent on staff wages & salaries during the year.
Founded in 1973, Avoncourt is a leading thermoform packaging manufacturer supplying a range of customers predominantly in the food processing sector. Avoncourt employs 119 staff.
FY19 was a strong year for Avoncourt which saw its revenue rise by 7.5% to c. €21.2m and EBITDA rose by 45.0% to c. €2.2m.
The closing net cash balance at Avoncourt decreased by c. €670k to €371k with working capital (c. €1.5m) and Capital expenditure (c. €2.0m) being the main draws on cash. These were offset by a related party loan of c. €1.1m. Avoncourt is ultimately owned by the Batemon family.
Who: Hero Shield Ltd, a non-profit organisation that was set up by 18 cross-border companies to manufacture face visors for health workers, has received funding.
What: The group, headed by baby product maker Schnuggle, has received €300K from the Co-Innovate scheme, led by InterTradeIreland and supported by the European Union’s INTERREG VA Programme.
Why: The group of 18 cross-border firms are currently producing 70,000 visors per week for the health sector both north and south of the border. The funds will provide a financial lifeline to the group and will help it continue the production of low-cost face shields.
Source: Belfast Telegraph
Who: Ardagh Group, glass and metal container company, has raised funds.
What: The company raised €644m in a bond sale after initially setting out to raise $400m (€360m). The bonds will yield investors 4 per cent.
Why: The proceeds will be used to repay debt.
Source: Irish Times
Who: Paddy Power owner Flutter Entertainment launches a share sale.
What: Goldman Sachs and Davy were hired to place 8.045 million new shares, the equivalent of 5.5% of current total stock count, in the market. Allowing for a 5% typical discount that could apply to such a deal, it may raise about €900m.
Why: The proceeds will be used to cut its debt burden and to have the financial flexibility to take advantage of opportunities that might fall out of the Covid-19 crisis.
Source: Irish 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.
Source: (Google Images & LinkedIn)
The word of the week gong goes to the FT who described the challenge of reconciling the current economic data and likely economic challenges over the next 18 months to the near peak recovery of stock markets as “dissonance”
dissonance
/ˈdɪs(ə)nəns/
1. lack of harmony among musical notes.
“an unusual degree of dissonance for such choral styles”
The article is below:
https://go.renatus.ie/e/
The FTSE 100 Index closing price as of Friday the 29th of May was 6,076.60 versus its Jan/Feb peak of 7,674.60 (-20.8%)
The ISEQ Index closing price as of Friday the 29th of May was 5,888.55 versus its Jan/Feb peak of 7,255.14 (-18.8%)
The S&P 500 Index closing price as of Friday the 29th of May was 3,044.31 versus its Jan/Feb peak of 3,386.15 (-10.1%)
c. 20%
The reduction in the planned foreign direct investment (FDI) projects in Ireland for 2020 as a result of Covid-19. This 80% completion rate is above the 65% European average, according to a report by @EY_Ireland @IrishTimes
43.3% & 44.8%
The year-on-year drop in the retail sales volume and value index, respectively, for April 2020, according to @CSOIreland
12.4%
The predicted economic contraction in Ireland for 2020, according to ESRI Quarterly Economic Commentary. @IrishTimes
3.4%
The year-on-year decrease in the tonnage of goods handled by all Irish ports for 2019 compared to 2018, amounting to 53.24 million tonnes, according to @CSOIreland
99.1% & 99%
The year-on-year decrease in overseas arrivals and departures, respectively, for April 2020 amounting to 16,100 arrivals and 17,800 departures by both air and sea transport, according to @CSOIreland
44.0
Bank of Ireland’s economic pulse index for May 2020, which measures consumer sentiment, up 9.6 points month-on-month, according to @IrishTimes
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