Carlyle Cardinal Ireland (CCI), a €292 million fund jointly owned and run by US player Carlyle and the Irish-owned Cardinal Capital group, is targeting at least three acquisitions in 2018, a year in which it believes will be a record one for private equity locally.
CCI, which is reported to be on the verge of selling Lily O’Brien’s chocolate company for nearly €50 million, is now two-thirds of the way through its funding cycle.
"We're sitting on a very strong pipeline, probably the strongest I've seen, going into 2018 and I'd be disappointed if it wasn't our best year yet and possibly the biggest for our competitors as well," CCI director Ian Daly told The Irish Times.
“We have an ambition to do at least three acquisitions in 2018 and maybe more but are obviously constrained a little bit by what is left in the fund. I’d be hopeful that at least two deals will be done early next year,” he added.
CCI invests primarily in buyout and growth equity opportunities in mid-market companies with investments ranging from €5 million to €50 million on deals that range in size from about €20 million to about €150 million.
Eight acquisitions
The company has made eight acquisitions in Ireland in recent years, the most recent being the €50 million takeover of pharmacy chain Sam McCauley Chemists, which was completed in August.
The Irish Times last month reported the fund had entered into exclusive talks with an unnamed bidder to sell the Lily O'Brien's chocolate company, which it acquired for €15 million three years ago.
The deal, if completed, will represent CCI's first exit from its "sector agnostic" portfolio of Irish businesses. It has also invested in companies including payment processing firm Payzone, food group Carroll Cuisine and motoring organisation AA Ireland.
Mr Daly, a former director of corporate development at Paddy Power who also previously headed insight and commercial strategy at the bookmaker, joined the fund last year. He said there were “probably four or five deals left in the fund”.
“It depends. It could be three, it could be six. I’d reckon 10 to 15 deals would be the total number although we’re also interested using some of the remaining equity to support bolt-on acquisitions across the portfolio so that could affect the final figure.”
One of those portfolio firms that will likely get assistance on the acquisition front is pharmacy chain Sam McCauley. Following on from completion of the deal, CCI said it intended to double the size of the company over the next three to five years through a combination of organic and acquisitive growth.
“We’re excited about the growth opportunity with the chain. We have a new management team in place and we’re focused on continued growth on the dispensary and retail side and on growing other distribution platforms like mobile and online,” said Mr Daly.
Any acquisition we make is based on an underlying growth thesis and in terms of Sam McCauley it is the aging demographic. The fastest-growing segment of the population here is between the ages of 50 to 70 years and they are the biggest consumer of pharmaceuticals, so we see lots of opportunities in the space,” he added.
