Turkish building materials group Cimsa has agreed to buy almost 95 per cent of Mannok Holdings, the Fermanagh-based manufacturing company known previously as Quinn Industrial Holdings (QIH), in a deal worth €330 million.
Mannok, owned by three hedge funds and three businessmen, makes building materials and packaging for the food industry.
Businessman Seán Quinn and his family lost control of his wider Quinn Group empire in 2011 to Anglo Irish Bank, as the now-defunct bank attempted to recover €2.88 billion they owed it.
The QIH business was sold three years later in a €98 million deal to businessmen John McCartin, John Bosco O’Hagan and Ernie Fisher, backed by a group of US hedge funds (Brigade Capital, Contrarian Capital and Silver Point Capital) that were already invested in Quinn Group debt.
The investment funds own 78.6 per cent of the business that was rebranded as Mannok in 2020, with most of the remainder of the shares held by the three Irish businessmen.
The shareholders are set to make a multiple of their initial investment as a result of the sale. Still, more than €100 million has been invested in Mannok’s businesses over the past decade.
Mannok executives have been the subject of a prolonged campaign of intimidation and violence since the change of control a decade ago. The company’s long-standing chief executive Liam McCaffrey – who was previously CEO of the Quinn Group – retired from the business at the end of June. He was succeeded by Dara O’Reilly, who was Mannok’s chief financial officer.
Mannok’s management team will retain a 5.3 per cent interest after Cimsa, a unit of Turkish global conglomerate Sabanci Holdings, completes the deal. The company employs about 800 staff.
What’s happening with Ireland’s housing crisis and where do we go next?
Under the agreement, the Mannok brand will be retained for Cimsa and Sabanci in Ireland and the UK, and the business will continue to be led by local management. This agreement follows recent investments by Cimsa in Spain and the US, underpinning its ambition to become a scale player in the UK and Irish markets.
“At this stage of our development, securing a long term, strategic, well capitalised owner of scale, is the right move for Mannok and we look forward to working with our new colleagues at Sabanci,” said Mr O’Reilly.
“I wish to also acknowledge and thank the investor Group, led by Brigade Capital Management, LP among others, for their unstinting and collegiate support as majority owners of the business over the past decade.”
Mannok’s revenues dipped 1.8 per cent last year to €311.9 million, driven by sales price deflation for insulation and plastic packaging products.
However, earnings before interest, tax, depreciation and amortisation (Ebitda) soared 74 per cent to €44.9 million, as its earnings margins expanded and it gained from previous investments in carbon reduction initiatives.
Mannok reduced its debt over the past decade by 30 per cent to €66.8 million at the end of 2023. Subtracting this from the €330 million enterprise value of the Turkish deal points to an equity valuation of more than €260 million for the business.
