While Ireland is a very active market for mergers and acquisitions, it’s rare that its most valuable privately held family companies come on the market. But when sales do occur, they often reveal enormous values that were hiding in plain sight.
s the family of Jones Engineering chairman Eric Kinsella is set to receive more than €300m from the sale of the company to US investment firm Cathexis, we look at five of the more significant deals of recent years.
Donegal-based E&I Engineering Group was bought for $2bn (€1.69bn) last September by US infrastructure company Vertiv in one of the biggest ever takeovers of a privately-owned Irish business.
The deal made a billionaire out of founder and main shareholder Philip O’Doherty and generated multimillion-euro windfalls for co-owners Damien McCauley and Cathal McLaughlin.
Vertiv paid an upfront consideration of approximately $1.8bn including nearly $1.2bn in cash and the rest in Vertiv stock. Up to $200m in additional cash is potentially payable based on hitting earnings targets this year.
Mr O’Doherty, who is also chairman of Derry City Football Club, owned 60.7pc of the company at the time of the sale, according to filings with the Companies Registration Office. Mr McCauley had a 26.2pc stake and Mr McLaughlin owned 13.1pc.
E&I was founded in 1986 in Burnfoot, Co Donegal and makes electrical switchgear for the rapidly growing data centre sector.
US catering giant Aramark paid €51m for family-owned food and luxury goods retailer Avoca in late 2015 after the popular business had been up for sale for about a year.
Owned by the Pratt family, stakes were divided between managing director Simon Pratt, his parents Donald and Hilary, and his siblings Vanessa, Ivan and Amanda, who had also been the company’s head designer.
Managing director Simon Pratt said in a 2014 interview that he didn’t envisage the business being passed on to the next generation, as the ownership and operating structure could become too complicated and fraught.
The company started life in 1974 as a textiles business after Donal Pratt acquired Avoca Handweavers in Wicklow. He and his wife sold Avoca fabrics from the back of their car and later opened a purpose-built showroom in Kilmacanogue, Co Wicklow.
By 2015 the business generated €58.8m in revenue a year.
In 2018, Canada’s Irving Oil agreed to acquire the Reihill family’s Tedcastle energy group, which trades as Top Oil, over a three-year period. It spent about $181m (€170m) on the purchase.
Its owned and franchised forecourts carry the ‘Top’ brand, while it is also a major heating oil distributor. Irving Oil also owns Ireland’s only oil refinery – Whitegate in Co Cork – which it bought in 2016.
The Tedcastle group, which was first known as Tedcastle McCormick, was acquired by the Reihills in 1951. In its 2018 financial year, the company generated revenue of €1.03bn and made a €10m pre-tax profit.
The Reihills started by importing cheap coal from Poland, and later expanded into oil, opening two terminals in the 1970s.
In 1994, when Russian President Boris Yeltsin failed to emerge from an aircraft at Shannon Airport for a brief State visit because he was drunk, RTÉ scrambled to fill airtime. It corralled a Tedcastle worker in overalls near the runway, who confidently stated that the visit would mark a “great day for Ireland, and a great day for Tedcastle Oil”.
Last year, UK retail giant Tesco agreed to buy the Joyce’s Supermarkets chain in Galway from managing director Pat Joyce and his family.
With 10 Joyce’s stores in the region, it plugged a gap in the British retailer’s footprint in Ireland.
The chain had been founded by Pat Joyce’s father 70 years earlier. The Joyce’s chain kept its turnover a closely guarded secret, but it was likely to have been at least €60m a year. Even on a margin of about 2pc, that would mean it was generating annual profits of at least €1.3m.
The sale price to Tesco – while not publicly disclosed – is certain to have been several millions. Mr Joyce, who had earlier denied any interest in exiting the business, said that the family “carefully considered” the takeover approach from Tesco and was “very pleased to pass our business on to an established brand”.
Entrepreneur John Teeling sold the world’s oldest distillery, Cooley, to the American bourbon whiskey giant Beam for €73m in late 2011.
The deal was a nice payday for its large investor base of about 300 small shareholders but it was especially lucrative for Mr Teeling and his family, who owned about one-third of the company and received more than €20m.
Many of Mr Teeling’s Backers had invested in the heritage company as far back as 1989 via the Business Expansion Scheme.
Mr Teeling and his sons have gone on to found the boutique Teeling Whiskey brand, which helped revive distilling in Dublin.
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