It was mid-June when Conor Sheahan found himself in a 16-seater bus on the way to the office of Action24 in Sandyford Business Park in Dublin 18. He had just helped to close a €3.6 million investment in the Dublin-based security business, which provides monitored intruder alarms, CCTV and access control solutions. So, it was time to celebrate. Sheahan, an experienced corporate financier, had become chairman of Action24 following the investment by growth capital investor BGF. 

On the bus with Sheahan were two of his team from CKS, a boutique corporate finance house he founded a decade ago, as well as one of the lawyers on the deal, Paul Bohan. Covid-19 had forced the quartet to hire a bus rather than squeeze into a taxi. “It was the only way we could get there and still be two metres apart!” Sheahan laughed. “We had a few beers with the team from Action24, we were all well away from each other, it was all very sensible!” 

Founded in 1981 by Derek Mooney, Action24 was built-up into a decent size with the help of Pat Maloney who joined in 1991. Two years ago Mooney’s son Aaron took over as chief executive. It has 13,000 customers, and ambitions to grow more. CKS advised it on its negotiations with BGF which is led in Ireland by Leo Casey, an IBI corporate finance alumni. As talks moved to BGF closing its acquisition of a minority stake, it suggested Sheahan go in as non-executive chair. 

Sheahan knew and liked the team behind Action24 after getting to know them during the last financial crash. They had a debt issue, which CKS had helped get sorted, allowing the business to continue to grow. 

“Fred said to me: ‘Why didn’t you go to college?’ So, I’m sitting there with both chips on my shoulder, neatly balanced.”

 “Pat and Derek used to put the alarms up themselves. It’s always a good sign in a business where those lads used to climb the ladders and put the ladder back in the van themselves. They’re as real as it gets.”

“Aaron Mooney took over as CEO in January 2018. So, he and I had talked constantly about getting some growth funding. There’s a huge opportunity in the home alarm, commercial alarm market in Ireland,” he said. 

The biggest player in the Irish market, Phonewatch, is owned by Norwegian-headquartered Sector Alarm which has over 500,000 customers in Europe. But there was plenty of room for Action24 to grow.   

“It has great advantages,” Sheahan said. “A state of the art monitoring alarm centre out in Sandyford, a great service culture, a band of people who’ve worked together for a long time.”

“They really get service and they’ve got exclusive rights to the Alarm.com product, a great home alarm product. So, we started a conversation last year saying ‘let’s raise some money to really grow the business’.”

Everything was going great until Covid-19. “For three months there were no alarms getting installed,” Sheahan said. 

“BGF did a whole pile of work on looking at the home alarm businesses. It liked the management team, liked the culture and, as with any deal as you’d expect, BGF did rigorous due diligence, and decided to go for it.” Its confidence will pay off, Sheahan believes. In the first week after lockdown restrictions eased, Action24 closed 50 new alarm sales. 

“A great management team doesn’t become a bad management team because of a global pandemic,” Sheahan said. “Businesses that can prove that they’re nimble, that the core of their business is still there, can still raise investment.”

“I think there’s real hard stuff coming (for some sectors) but I think there’s a bunch of businesses where there’s a golden opportunity to keep growing, despite everything.” 

Dealmaking in IBI 

Conor Sheahan: “My first interview lasted about 90 seconds,”

Conor Sheahan joined BDO Simpson Xavier (today BDO) in 1988 as a trainee accountant after school in St Joseph’s national school in Coolock. He chose to bypass third-level education. Instead, he worked in audit and corporate finance in BDO, and qualified as an accountant. Sheahan was only in his early 20s, and when the opportunity to go to America came, he took it and went to work for an associate firm in Chicago. It was there he developed an abiding interest in America. “I just loved the culture of doing business there, fellas would give you a chance, and it was very open,” he recalled. 

Sheahan stayed with BDO until 1994, when he applied for a job in corporate finance advisers IBI. The firm was founded in 1966, and back then was a unit of Bank of Ireland. Its reputation was blue-chip and conservative, and its team at that time tended to be university educated, and ex-private school. 

Sheahan remembers the marble floors and grand staircase of IBI’s old office near Leeson Street Bridge in Dublin 2, as he went in to be interviewed. It was a spectacle intended to impress IBI’s wealthy clients, and Sheahan felt a little intimidated. He was ushered into a room with high ornate ceilings to be interviewed by IBI’s then head of personnel Fred Healy.    

“My first interview lasted about 90 seconds,” Sheahan recalled. “Fred said to me: ‘Why didn’t you go to college?’ So, I’m sitting there with both chips on my shoulder, neatly balanced.

“I’m sitting there thinking what an asshole, thinking all those things. I said, ‘Fred, well to be honest, you know, I didn’t need to, I went on and got qualified, I just skipped a recession (by being in the United States) unlike all those other lads waiting to get interviewed and it was a smart thing to do’. He goes, ‘Thanks a million’, and that was it.” 

Sheahan left convinced he’d been shot down without being allowed to prove himself because he hadn’t gone to university. “But about a month later the lady from HR calls me, ‘Great interview, we’d love you to come back,’” he recalled. 

“You’ve to pass two tests with people. The competency test; I can value stuff, I can negotiate, I can raise you the money,” he said. “But also, the chemistry test. The client needs to believe you can do it, they need to know you’ve got their back.”

“So, I was going like, is this a science experiment with the lad from the Northside?” Sheahan said. Quickly, he realised things were getting serious. 

A round-robin grilling ensued from IBI’s team including Danny Kitchen (today chair of Hibernia Reit and Applegreen) and Louise English, head of IBI’s private company division, and then probably Ireland’s most senior female corporate financier.  

Two still up-and-coming IBI executives also interviewed him: Tom Godfrey (today chief executive of IBI) and Ted Webb (today IBI’s managing director). 

“So, I did all the interviews, and then another month of silence,” Sheahan recalled. “Then Fred, rang and said, ‘That was brilliant, will you come in and meet Richard?’” 

Richard Keatinge was a big hitter in Irish corporate finance who was described in his 2008 obituary in The Irish Times as “one of the foremost financiers in a generation of bankers.” 

In 1990 he had been unfairly ousted from Bank of Ireland over losses in a British business he had inherited, only to return as head of IBI in 1993. “Richard was a very tough guy,” Sheahan recalled. 

“He said, ‘Listen, I’ve got a choice to make, I am only going to hire one guy, but there’s two of you’, and the other guy is a guy called Mark Spain (today chief strategy officer in Bank of Ireland).” 

“I said, ‘Well here’s the pros and cons of Conor versus Spainer’,” Sheahan said. Sheahan was only just in his mid-20s, but had six years of working under his belt. “I was fairly open with him and said… I know you guys are terrible at collecting the money, because that’s kind of a rude topic and all that kind of stuff. I have no problem doing that.” 

“And then about two weeks later I got an offer which was probably the defining step for me, as suddenly I got all this experience working in corporate finance,” he said. And what about poor old Mark Spain? “They hired Spainer as well,” Sheahan laughed. 

The year Sheahan joined IBI it advised Michael Smurfit’s Jefferson Smurfit Group on the purchase of Cellulose du Pin for £684 million and the flotation of Irish Permanent. Bank of Ireland was constantly on the acquisition trail generating lots of work.

In 1997, IBI advised Ryanair on its IPO and Cuisine de France on its sale to Philip Lynch’s IAWS for more than €50 million. It was back-to-back deals. “I was there getting exposed to this stuff,” Sheahan recalled. 

“Now, I’m the junior on the team so I’m pouring the coffee, plugging in people’s phones and you know, doing whatever needs to be done. But the experience you picked up was incredible.” 

IBI was the go-to-advisor for listed companies, but it realised there was a new breed of privately-owned company emerging. These businesses could be family-owned, divisions of larger groups, or trying to make the leap from midsize to large. 

Keatinge asked Sheahan to work with Ted Webb on going after these businesses. 

“If you were a bread maker, precast concrete company, waste business, a pub group, IBI back then was not your natural stopping-off point for a trade sale,” Sheahan said. “You’d be afraid to go in there. Posh lads, cufflinks, too expensive, all that stuff. Like we had tea ladies, when I joined IBI, a lady would come around with your tea and orange viscount biscuits.” 

Ted Webb had joined IBI from Bank of Ireland and before that had worked for the McCann family’s fruit business Fyffes. The McCann’s were from Dundalk, and like a generation of entrepreneurs from that border town, they knew how to hustle. 

Webb understood the rough and tumble business of being an entrepreneur.  Keatinge, conscious of IBI’s reputation, warned his young proteges to be “careful,” but otherwise backed them in going for it. 

“Ted was a great guy. We were great working together because we were very similar but very different,” Sheahan said. 

“Like Ted’s dad was a kind of cattle trader from Mayo, and my dad sold paint for a living. It was part of our DNA with clients, to sell them something and give good service.”

Sheahan had no school or university ties to tap into to drum up business. Instead he got his first big break by cold-calling the chief financial officer of Chivers, a jam company, based in Coolock where he grew up. The business was founded in 1932 and had sales of more than €30 million with operations in Coolock and Enniscorthy, Co Wexford. 

“I called up Chivers and said listen, I just want to make you aware, I am with IBI and we do private company work as well. Any time you’re thinking of doing something, I’d be happy to rock out, put a bit of bread on the water,” Sheahan said. 

Cathal Drohan, the chief financial officer, of Chivers rang him back. “So, Cathal said, ‘Can you and Ted come out here tomorrow?’ So, I said, ‘Absolutely’.” 

“So, we went out and lo and behold they were in the middle of trying to buy the business from Hillsdown Holdings.” Hillsdown was a sprawling conglomerate in the furniture, poultry and food business that was listed in London. 

It was months away from being bought by an American investment company called Hicks, Muse, Tate & Furst for $750 million, so the management of Chivers saw an opportunity to launch a management buyout. 

Chivers management asked IBI to raise the debt to buy their business. It turned to Paul Byrne, then in Ulster Bank, to come up with the money. “The deal stacked up. The business had the cash flows and all that stuff,” Sheahan said. “And lo and behold the boys bought Chivers out from Hillsdown.” It took nine months for the deal to close in November 1999. 

“It wasn’t the biggest fee we’d ever earned but we found that deal, we called them up. We obviously got a lucky break, but we got stuck in and did the deal,” he said. 

Sheahan said he learned from the deal. “You’ve to pass two tests with people. The competency test; I can value stuff, I can negotiate, I can raise you the money,” he said. “But also, the chemistry test. The client needs to believe you can do it, they need to know you’ve got their back.” As happens with corporate finance one deal leads to the next. 

Sheahan said he was conscious of the impact that giving good advice had on private businesses. “We were often selling someone’s life work,” he said. 

“So, for example I sold Mick Noble’s business, Noble Waste (to Celtic Waste in 2000). So, that was Mick’s life’s work and you needed to not just get him the best number, you had to really help him look after the details.”  

“Like don’t give away, to the extent you can, any mad warranties or indemnities. The money has to be the money,” he said. 

“We learned how to be good at getting the best deals for those clients. So, we did a whole pile of deals and it was really interesting.” Sheahan found himself working closely both with entrepreneurs and IBI’s team which besides Keatinge, English and Webb also included Peter Crowley (cofounder of FL Partners) and Chris O’Connell (O’Connell Corporate Finance). 

“They were brilliant corporate finance practitioners,” Sheahan said. “I worked on a team too as a senior person with Róisín (Brennan) as a junior person. She went on to run IBI and that was a great learning experience.” 

“She knocked all kinds of shapes and edges and stuff off me and hopefully she learned a bit about what I was about too,” Sheahan said. 

In 1999 Peter Crowley joined IBI as a director. Crowley had worked for six years in KPMG Corporate Finance before working for Tony Boyle’s Sigma Wireless. 

“Amazingly for two lads who like the craic and music and having pints, they put us working together!” Sheahan recalled. This friendship with Crowley would later lead to other things. 

***

Towards the end of his years with IBI, Sheahan started to work on tech deals as well as with private companies. It was the build-up to the tech bubble – a strange time when many genuinely great tech firms like Amazon as well as many duds were floating at big valuations. 

“We started looking at tech advisory and Goodbody’s were good at that, but no one else was good at that,” Sheahan said. “We didn’t even understand the lingo. So, particularly myself and Peter got focussed on that.” 

“We got a bunch of guys that we knew through contacts over from the States to literally come on a roadshow and visit Irish tech companies. Trintech was a good example of a just about to be a successful tech company. So, we went around, did a roadshow to these guys and pitched to them: we can give you the IBI heritage and service and these lads will help us with the tech.”

IBI advised for example Macalla Software, a mobile payments business. (The company was set up by former employees of CSK Software. Another CSK graduate is Eric Mosley who went on to create €1.2 billion valued Workhuman). 

“At the time there was a whole pile of small companies that were going to be almost like the next U2 of software companies: companies like CardBase, Macalla, Trintech. They had got out the gate and had done some fundraising and transactions.”

“So, halfway through the fundraise, Cathal and I had the same idea. We went out for pints at Christmas, he said you should join as CFO, invest a few bob and we’ll go off and conquer the world”

“We were saying we will try and get you the best deal on what you’d now call your series A round your three to five million round,” Sheahan said. IBI’s pitch was it would get dealsheets not just from Irish venture capital firms but also go to America and Britain. 

“It was an exciting fast-paced world. I started to do well financially. Life was great. And I just said to Karen (his partner) I’d love to go to the States and go for it.” A short time afterwards, an opportunity to move back to America would arise. 

Richard Keatinge led IBI until 1999. About a week after he retired he invited Sheahan and Spain for lunch in his splendid home in Killiney, south Co Dublin. They’d had a night out earlier that involved taking the éminence grise of Irish dealmaking to the Library Bar in Lillie’s, a now-defunct nightclub off Grafton Street then frequented by the broadcaster Eamonn Dunphy. The Killiney meeting was a more measured affair. 

Sheahan recalls Keatinge digging out their psychological profiles that the bank had conducted on them prior to hiring them. “Mark and I both looked at each other and said that, that is like writing it yourself! It was just one of those things where you went, wow, right. So, there was a layer of sophistication in Richard’s thinking that I wouldn’t have known like when he hired us, you know. You wouldn’t have thought it going in the door. But there was a real kind of family atmosphere, everyone got on, everyone worked hard together.”

Conor Sheahan. Pic: Bryan Meade

After Keatinge left through his work with IBI, Sheahan met two Donegal brothers called Cathal and Raymond McGloin who had founded a company called Performix Technologies. 

The business made employee performance management software for call centres, a sector which was booming at the time. The brothers had founded the business in 1998. It was raising millions to roll-into the United States and build a sales team. Sheahan hit it off with the brothers and could see the effectiveness of its software. 

“So, halfway through the fundraise, Cathal and I had the same idea. We went out for pints at Christmas, he said, you should join as CFO, invest a few bob and we’ll go off and conquer the world,” Sheahan said. 

“We didn’t have a great sophisticated plan. Cathal and I literally closed the round and I left and joined Performix as CFO.”

The investment they secured was from the late George Moore who was originally from Dundalk but became a multimillionaire in America. Moore ran a successful marketing technology business called TargusInfo (which he sold in 2011 for $650 million).

He had bought into Belleek China and Galway Irish Crystal using his tech fortune. Sheahan had met him in IBI when he was considering making a bid for Tony O’Reilly’s Waterford Wedgwood.

O’Reilly was then a billionaire and Ireland’s richest man. “At a time a bid was considered unfathomable,” Sheahan said. 

“People thought George was off his rocker but he was right. He believed they were five, ten or even twenty years behind the pace.”

Moore believed that WW needed to relocate most of its manufacturing to a lower cost economy and slash its cost base. 

“George was way ahead of his time. He was just a smart, smart guy.” Moore’s idea came to nothing, and O’Reilly went on to plough hundreds of millions into unsuccessfully trying to keep WW going, sowing the seeds for his bankruptcy in 2015.

“It was incredibly satisfying to close that deal. People had doubled down. we all thought we could do it, we’d made – I’d made – a tonne of mistakes along the way, but we’d done it.”

Sheahan however remained friendly with Moore, and would bounce ideas off him. 

He’d written a pitch book for Performix and asked him to take a look. Moore said he would be in his home in Carlingford that Christmas and to come and visit him.  

“George said, ‘Look, I understand that, if that’s what that is, I’ll invest some angel money, slow down the round by a couple of months and let me help’. And I went back to Cathal and said, ‘Look, I know I’m advising you and maybe I end up joining but you should come and see George’.” 

The meeting went well and Moore was in. “George gave me two cheques for 50,000 punts at the airport when he was leaving for the States and he said, ‘Look, I know where you live and you know, this could be a great adventure’.” Moore trusted him enough to give him the money, without any legal paperwork yet being drawn up. 

“George was as genuine and as real but as tough a punter as you’d meet,” Sheahan said. “And he became a great mentor and friend. I was very lucky with that relationship. So, he invested and then he said, ‘Look instead of this bigger round, maybe do a smaller round now and we go to the States quicker’.”

Performix closed a small round, and Sheahan quit his job in IBI to become CFO of Performix. He was 31 and about to embark on a new career as a tech executive.

*****

Conor Sheahan moved to Boston to work for Performix which was expanding rapidly. In 2002 it closed a $12 million funding round led by Highland Capital Partners. Another $10 million round followed in 2004 this time led by Atlas Venture. 

“Cathal was a brilliant, brilliant pitch man. It’s rare where you get a founding CEO who’s a mix of technical and sales,” Sheahan recalled. “He had the juice to carry those meetings and I learned an awful lot. I got a great opportunity to work with him, and that helped me hone pitching skills as well learn about becoming a CEO.” 

Performix had now raised $35 million in venture capital. It was turning over about $8 million a year but the fallout of the dotcom bubble was impacting it. Performix had hired more staff to expand, but now its customers were under pressure to cut costs and margins were squeezed. Things were getting bad. 

“We were probably you know, a month from actually shutting the company,” Sheahan recalled. The business’s venture capital backers became concerned and Cathal McGloin stepped down as chief executive. Performix had a big contract with Verizon Wireless, an American telecommunications giant, and a few other high profile businesses. 

The VCs felt they couldn’t let Performix simply go bust, as there was a reputational risk for them if the company couldn’t service Verizon and other blue chip customers. “We had to convince them that we’d a plan to service those contracts, fix the business and sell it.”

“It was an extremely tough thing for me taking over,” Sheahan said. “Like we were as thick as thieves, Cathal and me. But I was clear, I’d no notions about rebuilding. I was going to fix it and sell it.” 

“I said to the VCs, ‘Listen, I need a year’s cash and I’ll get you I think between X and Y’” Sheahan recalled. X was $15 million, and Y was $20 million. Highland said he would be lucky to beat $10 million or $12 million. 

Sheahan delivered on his promise. He worked hard on streamlining the business while Bill Loconzolo, his CTO who now works with Apple, worked on improving its product. 

In 2006 Sheahan sold Performix for about $20 million, in cash up-front and earn-outs, to Nice Systems, an Israeli company.  

“I’ll never forget it. On the 26th April 2006, the day my third son (Sam) was born in Boston, we sold the company,” Sheahan recalled. “My wife still laughs about this but we had to set up a router in the lobby of the hospital to sign the last of the documents.”

Sheahan had now seen corporate finance from both sides. He’d made a little from the proceeds too as part of the deal he negotiated with Highland was that the top 22 staff shared in the up-side above a certain price.

“It was incredibly satisfying to close that deal,” Sheahan said. “People had doubled down. we all thought we could do it, we’d made, I’d made a tonne of mistakes along the way but we’d done it.” Nice asked him to stay on, but after six months he felt it was time to go. 

“We’d had a brilliant family journey too. We’d had our third kid there. We loved living in Boston right. We were lucky. I worked hard and got paid very well.”

It was time to go back to Dublin. Sheahan recalled before he left, going out with an Irish neighbor who was part of the Anglo Irish Bank set in Boston. 

“I remember going along to one of their Boston parties,” he recalled. “And you would just go, these are the maddest fuckers that ever walked the earth. It was full on Wolf of Wall Street on a Thursday evening.” 

Sheahan was seen by the bankers as a bit of a risk-taker for getting involved in tech rather than the safety of property. Sheahan came back to Ireland in early 2007 just as the economy entered its final period before going off a cliff. 

*****

Tech investor

Conor Sheahan was on the board of education technology startup Learnosity and served as its chair for ten years. The business was founded by chief executive Gavin Cooney and CTO Mark Lynch in 2007. “Gavin and Mark were two great co-founders,” Sheahan said. “I helped them not make some of the mistakes I made,” he said. Learnosity he said had a cash positive model from early on from contracts with publishers like Pearson. As a result, he said, they held onto most of their business until late in the day rather than selling too much early. In 2018 Battery Ventures, which has backed businesses like Groupon, Coinbase and Nitro invested in the business. Sheahan said the value of the business was confidential but it has been reported to be in the tens of millions of euro. “Myself, Gavin and Mark Lynch, we had some hard conversations about hard conversations, but we also had more fun than was, just about barely legal and everyone did well out of it.” More recently Sheahan made a modest investment in Buymie, an online grocery startup which has raised €8 million so far this year, from backers like ACT and Sure Valley Ventures. Sheahan was introduced to Deven Hughes the cofounder of the business by Debbie Rennick, a partner in ACT. He was so impressed by Hughes he rang him afterwards to see if he could invest. He is not involved in the business day-to-day but he thinks it has a promising future. “It is an early-stage company still, but Devan’s got the hustle. He’s had some failures before and has learned. I’ve rarely seen a guy as engaged and as focussed on how he’s going to get from here to there.” 

*****

Conor Sheahan came back to Ireland having made some money. He bought a house in Portmarnock but was surprised at the prices in Dublin versus Boston. Out of the blue his old friend Peter Crowley rang him. He’d just set up FL Partners with Neil Hughes the year before. They were looking at buying Kaymed, a high-end specialist mattress maker founded by Zorach Woolfson in 1898. 

“Peter, he said, ‘Listen, would you help me look at this business?’, and I said, ‘To be honest, no like I’m actually taking time off’.” Crowley was convincing, however, and Sheahen ended up helping FL Partners with the due diligence around buying the business. Paul Keenan, then a partner in BDO, was selling the company. Neil O’Leary’s Ion Equity was also in the race. Sheahan knew Keenan from his days in BDO so he knew who he was dealing with. 

“Paul’s a brilliant corporate finance practitioner. He cut his spurs on some great deals in London and he knew his shit backwards,” Sheahan recalled. “It was one of those sales processes. We were out, they were out, all that kind of stuff and then Peter rang me and said, ‘Look, I think we’re back in, would you go to Boston and look at the US business they say they have.’”

“I remember going along to one of their Boston parties, and you would just go, these are the maddest fuckers that ever walked the earth. It was full-on Wolf of Wall Street on a Thursday evening.”  

Kaymed made specialist foam for beds in the Bluebell Industrial Estate and it made its beds in Kilcullen, Co Kildare. The bit FL Partners wanted Sheahan to find out about was how well was it doing in the United States, and what was the potential there. Sheahan went out to see Kaymed’s beds being sold in Jordan’s Furniture Store in Boston. 

Jordan’s is a legendary chain of stores founded by the Tatleman family in 1918. In 1999 the business was bought by Warren Buffet’s Berkshire Hathaway in a deal that saw all of its employees paid 50 cents for every hour they ever worked there. It was that sort of place, full of loyal experienced staff who believed in selling only the best.

“Jordan’s is an amazing destination furniture store. So I go there, and there’s the Kaymed beds,” Sheahan recalled. “Now Kaymed has the best mattress on the planet, but we wanted to see how it was doing in America. There it was in Jordan’s and I said to Peter, ‘Look, I thought that was all spoofing to be honest’. We were at the meetings with them and the due diligence and all that and I said, ‘There’s no way they sell to Jordan’s’. Like I lived in Boston, so Jordan’s was where I bought my stuff. I knew what Jordan’s was. They didn’t have any presence in the States. But Jordan’s were buying containers of these beds that came over the high seas.” 

“So, I went and found the bed buyer, a lady called Lori Silva and sure enough she said, ‘Yeah, we buy those beds’, and blah blah blah. So, I said to Peter and Neil, you know, ‘There’s a real opportunity in the US’,” Sheahan said. The move convinced FL Partners to bid a little higher based on this US potential and so it made a €60 million offer. 

Eleven days before the deal was due to close, Solly Woolfson, the patriarch of the business, died. “So, obviously it was hugely traumatic and the guys decided they wanted to go ahead with the deal and they wanted me to be the CEO. I said, ‘Look, I’m really interested in this and that business but I know, what I am not?’,” Sheahan said. 

He felt he didn’t have the manufacturing experience to really lead the business like the company’s current chief executive David Moffitt does. “Moffo is a manufacturing guy to his core. Cut his teeth in Smurfit’s… He has done a brilliant job with Kaymed.” 

“They became a billion-dollar sales company literally overnight selling direct to consumer. So, we took them on by taking their sales team.”

“But (back then) they said, ‘No, no, we want more sales and marketing, as we’re going to conquer the world’ right. So, I said, ‘Look you know, in for a penny, in for a pound’. So, I became the CEO.”

“So, I went in as CEO and the first year, year and a half went fantastically well. We went to the States, bought a business there in North Carolina. Bought a bed manufacturing business. Made our own beds there, same formula beds. Shipped our Irish engineer over to teach the guys there how to do it,” Sheahan recalled. 

Kaymed went head-to-head against the maker of Tempur-Pedic mattresses. The Kentucky-based business used NASA tested foam in its products and ran late night adverts targeting insomniacs with the promise of a perfect sleep. 

“People would ring up and go yeah, $500 down, three and a half grand over four years, done. They became a billion-dollar sales company literally overnight selling direct to consumer,” Sheahan said. “So, we took them on by taking their sales team.” Kaymed began to make inroads by competing on service as quality. 

“So, we got the backing of probably 35/40 great independent retailers. But these weren’t guys with one or two stores, these were guys with 20/30 stores each. So, a guy in California, a guy in Hawaii became like a $3 million a year customer,” Sheahan said.

In Britain Kaymed was now being stocked in Dreams, Britain’s biggest independent beds retailer. David Woolfson, Solly’s son, was heavily involved in training and educating staff in Dreams about the quality of its products. Kaymed even sponsored the Dreams Christmas party. 

“So, we built a book of business hugely and then September 2008 happened. So, we ended up hitting a wall.” 

Sales had hit a run-rate that would have added up to $30 million a year, but everybody stopped spending once Lehman Brothers fell. Kaymed found itself overextended. Nobody wanted its great products anymore. Worse, it had borrowed from Anglo Irish Bank which had also collapsed in the wake of Lehman.  

“So, it was time for very difficult conversations. I said to Peter and Neil, ‘Look, we need to vastly restructure this company, cut over 100 jobs quickly. We need to, I think, close down the States having just opened it up because we don’t have endless money’ right?” 

“It’s like the situation people have found themselves in now with the pandemic, and it wasn’t like the world closed down then, it just felt like it,” Sheahan said. 

“So, we had to do all kinds of changes and I said, ‘Look, I’m the guy to restructure this but then you’re going to need a different kind of management team, CEO’, and that’s where David (Moffitt) came on board. I’m still a shareholder and the business has grown hugely since.” 

Up until March, when Covid-19 struck closing many stores, he said, Kaymed was on course for its best ever year. 

*****

In January 2009 Conor Sheahan founded CKS Finance, a boutique corporate finance and advisory firm. It was the start of a prolonged recession and CKS initially specialised in debt negotiation, restructuring and recovery. 

“It was 2009 and people were starting to run around like headless chickens,” Sheahan said. He started in a small serviced office in North Dublin. “I started to get a few phone calls from people I’d worked with, worked for, studied with, did business with saying listen, would you have a look at this for me,” Sheahan recalled. “There was generally a confusing amount of debt. I didn’t know how they’d accessed that amount of debt based on their income or their circumstances.”

The kinds of deals he faced ranged from money piled into flats in Bratislava that didn’t exist to sites bought with a €10 million loan that were suddenly worth €400,000.

“So I took on six private clients who were either formally high net worth or professionals; doctors, judges, barristers, accountants. All kinds of people who’d found their way to me. I looked at these individual debt assignments and I kind of said, ugh, I don’t know how we’re going to get out of this but let’s talk to the bank.” 

The first significant deal Sheahan did was with Ulster Bank’s Global Restructuring Group. Many customers have complained about this particular unit both in Ireland and Britain. The bank itself has defended the actions of GRG. What does Sheahan think?

“I’ve certainly seen some cases that I came across where yeah, they didn’t treat people right,” Sheahan said. “But, I’m not trying to change the world, I’m trying to get deals done.”

Sheahan said he tended to advise his clients to focus on first getting out from under their banks rather than going to war with them. “You have to say to people look, they may have done this or done that, ‘Do you want to try and solve the problem?’, because if you do go on and litigate them and have a ten-year row you’re probably entirely correct but I’m not the guy for that.”

“I’m not a solicitor and that’s not what I’m doing. So, the first deal I did was for two accountants who had got involved in the property game and they had, and this phrase has become so well known to everyone, that had joined and several liabilities.”

The two accountants had become involved in property syndicates with about ten other investors. “They’d got great salaries and net worth and all that kind of stuff. But they had a joint and several liability with the others touching €50 million.” 

Sheahan negotiated hard with Ulster Bank. A deal was done that saw the accountants pay Ulster Bank a large amount of money but it was a fraction of the total liability. 

“You kind of focussed quickly on, they’re never getting their €50 million back, so they’ve to let go of that. And all these banks have provided for losses in an accountancy sense, they’ve provided for all that debt. So, in some sense what they get back is a bonus.”

“I don’t mean that in a trivial way. But you know, like say AIB, if you look back over the last five years; they’ve written back monies they’ve now recovered because all the previous debt was written off right. So, have Bank of Ireland in some respects.” 

At one stage during talks, one of the parties had flicked his business card back at him and told him: “Don’t worry, I’ll never see you again.” 

Gradually Sheahan built up a small team of specialists to help him. There were a lot of difficult situations to deal with. Sheahan built up his business by coming at it clean. He wasn’t working for Nama or the banks or a new breed of loan owner: the investment or vulture fund. This meant he had no conflict of interest when dealing with his clients who were often very distressed having gone from perceiving themselves as millionaires to being at risk of bankruptcy. 

“Back in 2010, 2011 into 2012, everybody was dabbling in debt restructuring because their core business; accountancy, management, pensions, taxation whatever it was, was suffering,” Sheahan said. “So, we were doing just debt restructuring and on a pure word of mouth basis, we started to grow. 

“It’s either settle it, carry on and try and fight, and then settle it in the future or have a legal row or go the insolvency route right. So, we would go through the options with people.” 

 “We built up a debt restructuring only practice from 2010 to 2014 and did probably 20 to 30 debt restructuring deals a year,” Sheahan said. “Our sweet spot is in the one to ten million space. So, someone has got a significant debt problem but there is a way to do a deal.”

What was the biggest deal you did? “We dealt with some massive cases but there’s almost a theoretical element to it,” Sheahan said. 

“I dealt with a case where there was about €80 million of debt with AIB.” Sheahan sold down the assets, paying most of the proceeds to the bank, with a carve out being returned to investors. “There was a debt write off and the lads still got back some money,” Sheahan said. He said banks were prepared to allow investors keep some money, provided they cooperated. 

“There’s an element of practical commerce about that,” he said. Other deals were more complicated as investors during the Celtic Tiger often invested in syndicates. “I’ve been involved in some joint and several (loans) that would get into the hundreds of millions but that’s just purely theoretical,” he explained. “My guy is one-sixth of that, he’s never going to pay NAMA €200 million.” Dealing with debt he said required looking not just at numbers.

“It’s really serious to take on the obligation of negotiating someone’s debt. We can sit here and joke about it but I’ve had three or four clients who are no longer with us and they died in tragic circumstances and that you know, I mean who knows what was going on in their brain.”

“But a lot of that was to do with their debt issues. I’m trying to give a great service and solve problems but I’ve seen the damage the debt and to some extent the banks have done to people in terms of the pressure.”

“There’s no kidding about that. Like that shit is real. So, we became good at this debt stuff.”

Ringing up a legal battle at the Belfry

The Belfry funds operated between 2002 and 2006. AIB raised about €300 million in equity from thousands of Irish investors which was loaded up with €1 billion in debt to buy commercial property in Britain. All told about 3,500 people got in on the act. 

Sheahan first heard about the funds from his clients. “A client who had a large debt issue was being pursued by AIB, and he came to me and said will you have a look at this stuff? So, I looked through their stuff, they had five investments in Belfry.” 

The client had invested with his partner and they were both over 65 years of age using money they’d inherited and made from selling land. “They were really smart people, but I wouldn’t have called them sophisticated investors. Who invests five times in the same product, across the board right? Not that many people. Particularly if they’re advised properly.”

Conor Sheahan of CKS Finance. Pic. Bryan Meade

In total his clients were on the hook for €1.5 million in Belfry. Sheahan hired a forensic accountant to look at their investments. He alleged that it was possible the investments might have been mis-sold (a claim the bank has steadfastly denied). 

“Older people buying into an eight-year investment that had no liquidity and if the loan to value clause on the loans in the mix of financing, if that loan devalue moved at all the equity was washed out. That’s what Belfry was,” Sheahan claimed. “But (to argue this) you’d need to take on the bank, you’d need to spend X million on a lawsuit. It was probably not worth it.” 

By this stage CKS had 90 live clients, and about a dozen had an exposure to Belfry. A few of them asked Sheahan to go with them to a meeting in the Red Cow of miffed investors around March 2014. About 400 people showed up. “They had the kind of theatre and the madness of a town hall meeting,” Sheahan recalled. “But there were real stories of people whose life savings had been lost.” 

“Belfry one (the first fund) made money. Belfry two (the second fund) will be great. Seven years of interest only, you can’t lose right?” Sheahan recalled hearing. “I left that meeting going fuck me, this doesn’t seem cool.”

“But you know, back to the office and on with things. And then the two guys who set up the meeting made contact with me and said, ‘Listen you were at that meeting, a number of clients put down your name we’d love to come and have a chat with you’.”

The two businessmen were Barry Flattery and Paddy Walsh. “They were resolute we’re not letting this go,” Sheahan recalled. 

They had heard about Sheahan as he’d previously been involved in helping investors in a property deal they’d been put into by Bryan Turley’s Sorrento Asset Management. 

Thirty-seven Sorrento clients had found $20 million of their money caught up in an apartment deal in the Sliver Building in Manhattan on the corner 8th Avenue and 48th Street. Sheahan had ended up representing the Irish investors as they fought to get their money back in the aftermath of the financial crisis. 

“Older people buying into an eight-year investment that had no liquidity and if the loan to value clause moved at all, the equity was washed out. That’s what Belfry was.”

“We hired a New York law firm, and raised a fighting fund where they put a few grand each into the kitty,” Sheahan said. A vulture fund had bought the debt on the condo building giving it a lean on the deposits paid by the Irish investors.  

“We had a shemozzle negotiation you know, there’s two movies in it,” Sheahan recalled. 

“We were told the money’s locked down, your money is gone, sorry, goodbye,” Sheahan said. He said at one stage during talks one of the parties had flicked his business card back at him and told him: “Don’t worry, I’ll never see you again.” 

Sheahan didn’t give up. “The money was still in an escrow account and in New York, in New York State, a deposit on a condo is a security instrument. So, it’s regulated. So, it’s a serious matter.” 

“So, we got into the maddest scramble for the money,” he said. Sheahan went to see New York’s then Attorney General Eric Schneiderman to ask for help. 

Schneiderman wasn’t prepared to litigate, but he did encourage the two sides to talk. Sheahan flew back to Dublin with a deal on the table. He met the 37 investors in the Radisson Hotel near Dublin Airport to explain what their options were. 

He said they could risk fighting at a cost of millions in legal fees, or do a deal. “We got about 60 per cent of the money back. We got about $12 million bucks back.” Some of the clients in Sorrento, were also in various Belfry deals. 

Sheahan agreed to take on the Belfry case. A group of investors was created called the Belfry Investor Action Group representing 338 people. Tom Casey, a solicitor, and barristers John O’Donnell, Gary McCarthy and Oliver Butler all came on board.  

“It’s hard taking these cases, as there’s no class action system in Ireland. We have a group of about 220 people who have now stayed with it all the way,” Sheahan said. 

About a dozen former Belfry investors have passed away since the action began. It has not been an easy process. The investors won their first case in 2016 to ensure their action was not statute barred by having taken place over six years before.  

“Of course, AIB appealed it. We lost the appeal on the statute and we’ve now been admitted to the Supreme Court, and that case will probably happen before the end of the year,” Sheahan said. And if you win there what will you argue? “If we win that our argument is that, and we have an expert witness report all done, that the bank mis-sold this product to these clients.”

“Our lead test case is an 82-year-old lady called Bernadette Goodwin. AIB sold that product to her husband Charles. The facts are: 31 days later after signing the contract, Charles died. He was terminally ill, heavily medicated.” Goodwin put €150,000 in Belfry, with the plan being this money would provide for his wife’s future. AIB has resolutely denied any wrongdoing.

Sheahan said it was the human story behind the investors that drew him to taking the action. “I’m not trying to save the world or crusade or whatever. If we win it will make a bit of difference to a bunch of people. Taking on a bank which we’re trying to do, that’s very difficult. But we’ve a brilliant legal team and we have kept going. 

“We’re six years in, there might be another year or two to go but we’ve already got further than certainly the bank thought we ever would. And I don’t know, there’s something at least satisfying about seeing that through to the end right.”

Doing deals today

After the vulture funds came to Ireland buying portfolios of loans, suddenly there was a new group of people to deal with. “The way you have to deal with them is through their regulated servicer – the Peppers or Links A lot of our business became dealing with vulture funds.” 

“Again, people say the vulture funds and all that bad stuff and they’re terrible and yeah, I’ve had cases where they’re absolutely terrible to people. But I’ve got dozens of deals done.” 

“They’re absolutely willing to be pragmatic,” Sheahan said. He said clients often wanted to go to war with them in the courts, but the reality was this was expensive and risky.

“People often need to get on with getting their deal done. We’ll try and be very resolute and frank with people about what they need to do, and not just tell them what they want to hear.”

“If they have good security, if their pack of documents stacks up… they have you dead to rights. You owe them, say, ten million.” 

The funds, he said, will have paid just a fraction of this to acquire the loan. This meant they had leeway to negotiate, but it wasn’t enough just to pay them more than what they paid. 

“They’d got great salaries and net worth and all that kind of stuff. But they had a joint and several liability with the others touching €50 million.” 

“We’ve tried to focus on what’s the value of their security right, the asset, the holiday home, the park, whatever it is. And are there any wrinkles in the documentation? And oftentimes there are so that’s worth something… Like it’s never going to be zero. It’s never going to be free. So, we try to get people to focus on here’s the space where we can get a deal done.” 

Gradually as the crisis eased, CKS’ business changed. Clients became free to start again, and started asking for help restarting in business. 

“It was a mix of I’m thinking of buying a business, I’m thinking of investing in this business, my business has got bigger, I’d like to raise funding for it, I’m thinking of selling my business. So, out of the debt restructuring world…we’re running a private company or SME corporate finance practice.”

It advised, for example, Boyne Valley Foods on the 2017 departure of its then chief executive, who was also a minority shareholder in the business. Ted Webb, Sheahan’s former colleague in IBI, was on the other side of negotiations. I asked Sheahan what types of deals had it done this year. The range of deals gives an insight into CKS’ broad capabilities. 

Conor Sheahan of CKS Finance. Pic. Bryan Meade

It advised artificial intelligence startup Voysis on its sale to Apple in March 2020 for an undisclosed sum. The month before it worked with Accelerated Payments, an invoice financier, on closing a €3.5 million series A round. While in April it worked with Northern Ireland tech company Oroson on a €750,000 funding round. 

“We’ve been lucky enough to be involved in stuff that’s bigger than people might think. There’s six of us in the business,” Sheahan reflected. “So, we’ve a finite amount of resources but we’ve had a lot of experience, and are hungry to do more.” 

Endnote: Investing in music

On August 1, 1997, solicitor Daragh Bohan wrote to the manager of musician David Gray with a proposal. EMI had just dropped Gray after his second album called Sell, Sell, Sell had failed to do so. He sent Gray a business proposal whereby a group of Irish business people would agree to fund his comeback. The project was code-named ‘Silver Lining’ and backed by Conor Sheahan, Peter Crowley, Bohan and Cormac Whelan (later the chief executive of Datalex) as well as a few others. Gray mulled it over but ultimately decided to go it alone and put out his next album himself. This record was called White Ladder, which went on to sell three million copies. The title of the fifth song on the record is ‘Silver Lining.’ Sheahan’s love of music comes from his uncle John Sheahan who played fiddle with The Dubliners from 1964 until the band retired in 2012.  

“Music has always been part of our DNA as a family,” Sheahan said. “I like to sing and play and have the craic and all that.” In 2005 Sheahan set up 1969 Records with Crowley, Daragh Bohan, a partner with corporate lawyer OBH, and Whelan. Daragh Bohan’s brother is Paul Bohan who helped Sheahan on the Action24 deal.  1969 Records was set up to release music that otherwise might not have got a commercial release. It has released albums by bands like Pugwash and artists like David Couse, the lead singer with A House. For a few years, Sheahan even managed a Dublin band called the Gandhis. Sheahan talked them into the line-up of Electric Picnic which was then run by John Reynolds. “1969 was a labour of love right. It was a bunch of friends getting involved in something that we wanted to spend a bit of time on. We had fun and it lasted for a few years and now we’re out of it.”