Whilst Ireland is a very active market for mergers and acquisitions, it is rare for its most valuable privately owned family businesses to come onto the market. But when sales do take place, they often reveal enormous values that are hidden in plain sight.
With the family of Eric Kinsella, Jones Engineering chairman, expected to receive more than €300 million from the company’s sale to US investment firm Cathexis, we look at five of the most significant deals of recent years.
Donegal-based E&I Engineering Group was bought by US infrastructure company Vertiv last September for US$2bn (€1.69bn) in one of the largest takeovers by an Irish private company.
The deal made founder and major shareholder Philip O’Doherty a billionaire and raised co-owners Damien McCauley and Cathal McLaughlin millions of euros.
Vertiv paid an upfront payment of approximately $1.8 billion, including nearly $1.2 billion in cash and the remainder in Vertiv stock. Up to $200 million in additional cash is potentially payable if earnings targets are met this year.
Mr O’Doherty, who is also chairman of Derry City Football Club, owned 60.7 percent of the company at the time of the sale, according to filings with the Companies Registration Office. Mr. McCauley owned 26.2 percent and Mr. McLaughlin owned 13.1 percent.
Founded in 1986 in Burnfoot, Co. Donegal, E&I manufactures electrical switchgear for the fast growing data center sector.
US catering giant Aramark paid 51 million euros 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, the shares were split between CEO Simon Pratt, his parents Donald and Hilary, and his siblings Vanessa, Ivan and Amanda, who were also the company’s chief designers.
Managing director Simon Pratt said in an interview in 2014 that he did not think about handing over the company to the next generation because the ownership and operating structure could become too complicated and confusing.
The company began as a textile business in 1974 after Donal Pratt took over 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 company generated annual sales of 58.8 million euros.
In 2018, Canadian company Irving Oil agreed to acquire the Reihill family’s Tedcastle energy group, trading as Top Oil, over a three-year period. Around 181 million US dollars (170 million euros) were spent on the purchase.
Its own and franchised gas stations are “Top” branded, while it is also a major heating oil dealer. Irving Oil also owns Ireland’s only oil refinery – Whitegate in Co Cork – which it bought in 2016.
The Tedcastle group, initially known as Tedcastle McCormick, was taken over by the Reihills in 1951. In the 2018 financial year, the company generated sales of €1.03 billion and a pre-tax profit of €10 million.
The Reihills began importing cheap coal from Poland and later expanded into the oil industry, opening two terminals in the 1970s.
When Russian President Boris Yeltsin failed to emerge from a plane at Shannon Airport for a brief state visit because he was drunk in 1994, RTÉ struggled to fill airtime. It held a coveralled Tedcastle worker near the runway, who confidently declared the visit would be a “great day for Ireland and a great day for Tedcastle Oil”.
Last year, British retail giant Tesco agreed to buy Galway’s Joyce’s Supermarkets chain from chief executive Pat Joyce and his family.
With 10 Joyce’s stores in the region, it filled a gap in the British retailer’s presence in Ireland.
The chain had been founded by Pat Joyce’s father 70 years earlier. The Joyce’s chain kept its turnover top secret, but it must have been at least 60 million euros a year. Even with a margin of about 2 percent, that would mean that it generates annual profits of at least €1.3 million.
The sale price to Tesco – although not publicly announced – should have been several million. Mr Joyce, who previously denied any interest in exiting the company, said the family had “carefully considered” Tesco’s takeover approach and were “very pleased to be passing our business on to an established brand”.
At the end of 2011, entrepreneur John Teeling sold the world’s oldest distillery, Cooley, to American bourbon whiskey giant Beam for €73 million.
The deal was a nice payday for his large investor base of some 300 small shareholders, but it was particularly lucrative for Mr. Teeling and his family, who owned about a third of the company and received more than €20 million.
Many of Mr. Teeling’s supporters had already invested in the long-established company in 1989 via the Business Expansion Scheme.
Mr Teeling and his sons founded the boutique Teeling whiskey brand which helped revitalize distilling in Dublin.
https://www.independent.ie/business/irish/hidden-gems-five-irish-firms-that-made-millions-for-their-family-owners-41718837.html Hidden Treasures: Five Irish Companies That Made Millions For Their Family Owners