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Renatus’ Weekly M&A Newsletter – 17/05/2020
May 18, 2020
Renatus’ Weekly M&A Newsletter – 14/06/2020
June 15, 2020
May 31, 2020

Eir’s subsidiary Emerald Tower acquired by US group, CVC acquire stake in PRO14, Receiver appointed over Victoria assets, Ardagh Group raises funds, Paddy Power owner Flutter Entertainment launches a share sale & much more in this week's Renatus M&A 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

Eir’s subsidiary Emerald Tower acquired by US group

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

CVC acquire stake in PRO14

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

Deal Updates

Paragon Group acquires Spicers Ireland

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

Examinerships/Receiverships

Receiver appointed over Victoria assets

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

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.

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.

RECENT FUNDRAISINGS

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

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.

Elaine Carey

Source: (Google Images & LinkedIn)


Nigel Smith

Source: (Google Images & LinkedIn)


Nicola Woods

Source: (Google Images & LinkedIn)


Elizabeth Headon

Source: (Google Images & LinkedIn)


William Taylor

Source: (Google Images & LinkedIn)


Patrick Ryan

Source: (Google Images & LinkedIn)


Mike Powell

Source: (Google Images & LinkedIn)


Rosemarie Tully

Source: (Google Images & LinkedIn)

THOUGHT FOR THE WEEK

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/512701/66-a1b5-11ea-b65d-489c67b0d85d/3ffy1l/435810365?h=yHXFbjOuKVwGPd_Q-isRo6_7eTrMHwJyU8Y2qat2GWQ
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%)

@RenatusCapital Tweets

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

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.