By one way of looking at things, Irish business is dominated by a handful of giant companies: CRH, Flutter, Kerry, Ryanair, Kingspan, ICON, Smurfit Kappa, DCC, Aercap, United Drug. 

These ten companies are worth almost as much as the entire Irish stock exchange, combined. 

But those businesses are not representative of what’s going on in Ireland. They make a small slice of their revenue at home. They happen to be Irish companies, but they’re operating at a global scale. 

Below the giant multinationals, and the publicly traded companies, there’s a thriving ecosystem of privately owned Irish companies. These companies are growing, acquiring, innovating, and getting acquired at a furious rate. 

Because they’re privately owned, they get much less scrutiny than public companies. There is no market price for their shares.

Many of the names — Eircom, Musgraves — are familiar. But many aren’t. They’ve grown along with their industry, like engineering companies serving data centres and private hospitals. Others, like Cork’s Amarenco, look like future giants. 

Dublin dominates the list. Many companies — like Maxol, Sisk and Beauparc — were founded in provincial Ireland, only to later relocate their headquarters to Dublin. More than half of the 50 companies are based there. 

It’s possible to see what’s going on inside these companies, but only imperfectly. Limited liability companies are obliged to file accounts every year. But their account filings are not like the filings of public companies. A company determined not to share its financial information could do so, by, for example, filing from the Isle of Man. 

Then there are the companies that choose to have unlimited liability. The owners of these companies are on the hook in the event of company bankruptcy. But because of this, they’re not obliged to share financial data.

The companies that choose this option are in the minority, but are some of the most valuable in the country. The Goodman family companies, Dunnes Stores, Ballymore and the Magnier companies are in this category. 

A list that included venture-funded companies would include the likes of Wayflyer, Intercom, Letsgetchecked, Workhuman, Tines, and Fenergo. In a more transparent world, these companies would no doubt be right up there with the biggest on this list. But without access to their accounts, I can merely note their absence and move on.

As well as big companies, four big industries dominate the list: utilities, engineering and construction, food processing and hospitals are worth more than the other 23 industries combined. 

This being a list of Ireland’s limited companies, with multi-year filing histories, it’s not surprising that it skews towards Ireland’s more traditional industries. 

The goal of this project was to value Ireland’s private businesses. But that begs further questions. What makes them valuable? Is it the stability of their earnings, their growth, their efficiency? And what might they be worth to different categories of buyers?

In answering these questions, four trends stood out.

Trend number one: squeezing suppliers harder

Working capital is about short-term assets and liabilities — basically the invoices you owe your suppliers, and the invoices your customers owe you. And net working capital is the two numbers summed together. 

Looking at the last three years, there’s a strange trend among these Irish companies. The average change in working capital has turned negative. This could have two potential causes: either they are paying their suppliers later or paying their customers sooner. 

In practice, it’s very unusual for healthy and growing companies to start paying their customers sooner. Much more commonly, they’re paying their suppliers later. 

Of the companies I valued, the average one is decreasing its working capital by about 20 per cent of its operating profits. This means it’s likely that suppliers to these companies are waiting longer to get paid. 

This trend is being driven by a relative handful of companies. The median, as opposed to the average, company is showing no change in net working capital. 

Trend two: high returns on capital

Return on capital is operating profits over the amount of capital that’s tied up generating those profits, both debt and equity. The average return on capital on US-listed companies, excluding banks is 6.0 per cent. Whereas the average return on capital across these 50 companies is 27.5 per cent. 

When return on capital is high, it’s a sign that the company should reinvest money into the business, where returns are high. 

And that’s exactly what we see. 

Trend three: high reinvestment

On average, Irish companies are investing heavily in capex. Their Capital expenditure rate is running 72 per cent higher than their depreciation rate, which indicates they’re growing fixed assets at a faster rate than they did previously. 

The reinvestment rate is a broader term that includes both net capex as well as changes to working capital — and that number is admittedly negative. But I believe that’s less about Irish companies deciding not to invest in themselves, than a handful of companies holding out on paying their suppliers. 

Trend four: low debt

These firms don’t fund themselves with much debt. Since these firms aren’t public we can’t use market debt to equity ratio estimates. But we can see how comfortably they’re able to cover their interest payments out of operating income. The median company on the list’s operating income is 27 times greater than its interest payments – in other words, its interest payments are tiny.

What’s causing this? It might be that the list has a lot of construction companies, who avoid debt. It might be that Ireland’s businesspeople are scarred by 2008. Or it might be that Ireland’s businessmen are under-using debt to maximise their firms’ value. 

The companies

I’ve ranked these companies by my fundamental valuation, which is based on a discounted cash flow model. Click here to read how I did it, the choices I made, and the strengths and weaknesses of this method.

What’s shown here isn’t the value of the shares in the company – equivalent to a market cap for a public company. What’s shown is the value of all the shares and all the debt, ie the company’s enterprise value. It shows the value of all the claims against the operating business.

The key thing to remember is that the DCF values these companies from the perspective of a private buyer, and private buyers are willing to pay less than public ones. I go into it in more detail over on the methodology page.

50. Campbell Bewleys: the custodian

Paddy Campbell’s first trick was to build Campbell Catering, which employed 5,000 by the mid-2010s. Next he acquired Bewleys Cafes, which he built into a successful multinational tea and coffee supplier. Campbell Bewleys is custodian of the great Bewleys brand.

Then, in his 50s, he stepped back from it all to become a sculptor. His work has been exhibited across Europe and the US, and he was asked to sculpt President Mary McAleese during her presidency. 

Now Bewleys employs 1,050 people. It generated €1.6 million in operating profit in 2019, and I’m forecasting it’ll make the same in 2021. A feature of the business in recent years is that it is capital-light, and it reinvests little, meaning a bigger slice of its cash flows go back to investors. 

It’s still owned by the Campbell family, and headquartered in north Dublin.

I valued the business at €51 million. Based on an Ebitda industry multiple it’s worth €116.1. The higher Ebitda multiple is likely down to Bewley’s chunky €5.7 million depreciation and amortisation charge, which gets added back on to Ebitda. 

49. Amarenco: future giant

Amarenco is a global solar power company based in Cork City, with operations in France, Singapore, Taipei, Bangkok, Hanoi, Tokyo, Muscat, Vienna, Lagrave and Porto. It employs 90 people. 

It was founded by Olivier Carré, Nick Howard, John Mullins and Alain Desvigne, and is backed by private equity houses Tikehau Capital and IDIA Capital. It had 90 employees at the end of 2020. 

The company’s most recent accounts are for the financial year 2020, when it earned €2 million in operating profit. Looking solely at the recent accounts, and based on the trajectory of recent earnings, you might expect Amarenco to make €2.5 million in operating profit next year. That would value it at €51 million.

But in 2020, Amarenco raised €150 million in equity funding and was seeking a total of €3 billion in debt and equity funding. It’s using the money to fund a targeted 3 gigawatts worth of projects by 2023. 

€3 billion is a great deal of money. The average return on invested capital in the power industry, says, Damodoran (2021), is 6.8 per cent. 6.8 per cent of €3 billion is €204 million. At €204 million operating profit, my model values the business at €2.6 billion (though, NB, we know very little about the new investment and plan). 

Amarenco, then: worth somewhere between €50 and €2,648 million. 

48. Aerogen: the fight against Covid-19

Before Covid came and turbocharged its growth, Aerogen was a success story. It had developed technology to deliver medicines via aerosol, which helped with lung conditions. It had attracted funding from the Singapore Sovereign Wealth Fund and operated in over 70 companies.

Aerogen is based in Galway, Ireland’s medical device capital. It was founded by John Power.

Aerogen made €4 million in operating income in 2019. But given demand for aerosol products as a result of Covid, by all accounts it’s not unrealistic to forecast 2021 earnings as high as €16 million.

Based on that (speculative) figure for 2021 income, the DCF values Aerogen at €51 million; the industry multiple puts it at €229 million.

47. McLaughlin & Harvey: A Belfast institution 

McLaughlin & Harvey is a construction firm based in Belfast, first formed in 1853. It remains in control of the Cheevers family, as it has for generations. McLoughlin & Harvey have a big operation in Britain, where it has recently worked on high-profile projects like the renovation of St George’s Square in Glasgow. In its time, McLaughlin & Harvey built major Irish projects, like the Guinness storehouse and the DeLorean car factory. 

In 2020, the firm’s operating profit took a 66 per cent hit as a result of Covid, which is much higher than the Republic-focused builders on this list. It earned £2.4 million in operating profit. That would be expected to bounce back fairly quickly. I’m forecasting £5 million of operating profit in 2021. 

The DCF values McLaughlin & Harvey at €53 million; industry multiples at €106 million.

46. Arkphire: back on top

Arkphire is an IT company. It builds, installs and manages IT systems for telecoms, banks, hospitals and factories. It’s based in Sandyford in Dublin, and it employs 100 people. 

The company was founded by Paschal Naylor, and is owned by Germany’s AO Group.

After a rough time during the 2008-12 recession, AO Group pulled out of the Irish market and tried to sell Arkphire.

But in the years since, Arkphire has refocused on FDI companies. Last year it generated a healthy €5.3 million in profit, and based on recent years it would be projected to make the same next year. 

It’s also quite efficient, in that it generates strong returns on capital, ie its profits are high relative to the amount of money its investors put into it. Arkphire’s return on capital employed is 19.6 per cent. 

My discounted cash flow model values Arkphire at €53 million. But there’s a big spread between this and the valuation using industry average Ebitda multiples, which values the business at €231 million. 

44. The Kirby Group: growing into the engineering boom

The Kirby Group is the first of several engineering companies to make the list. Founded by Tom and Michael Kirby in 1964, it is based in Limerick city. 

Kirby’s breakthrough was its participation in a complex project for a UK power utility. It reinvested in this area, and was in a position to capitalise when the data centre boom started. 

Kirby employed 1000 people at the time of its most recent accounts in 2019, though that number is expected to hit 1,500 by 2021. 

The DCF values Kirby at €60.9 million, and the industry multiple at €81 million. 

A caveat though — the DCF I’m using here is designed for stable, middle-aged companies. It doesn’t do a good job capturing growth, and Kirby is very much in growth mode. 

43. ATA Group: Ireland’s Mittelstand business

ATA Group is based outside Cavan Town, where it manufactures carbide burrs and other precision cutting tools. Its tungsten carbide burs are the most widely used in the world.

It’s not a very Irish-type company. Something you’d expect to find in Germany’s Mittelstand.

Founded in 1963, it has quietly built itself into a global player. It has acquired five companies since 2005, based in the UK, Germany, and the US. It now employs 140 people.

In 2016, Peter Cosgrove and other managers bought out the business, backed by AIB and Bank of Ireland. 

ATA Group made €8.2 million in operating profit in 2019 and would be expected to make €9 million in 2020. Again, it’s return on capital is notable here — 49 per cent. 

The DCF values ATA Group at €62.4 million, compared to €128.3 million using the Ebitda multiple. 

42. Chanelle Pharma: The Irish pharma company

There are plenty of pharma companies in Ireland. But there are few Irish pharma companies. Chanelle Pharma is one of them. 

It’s based in Loughrea, Galway. It was founded in 1985 by Michael Burke, a vet. It manufactures generic drugs — ie, off-patent drugs — for markets in 94 countries. It has 2,000 licences to produce animal health products, and 2,000 to produce human health products. 

The business is owned by the Burke family. It employs 550 people, with 70 in R&D roles. 

Forecast operating profit for 2021 is €8.5 million. This gives a 39.7 per cent return on capital employed, which is exceptionally good. 

The DCF model values Chanelle at €62.4 million. Where the industry multiple values it at €327.8 million. 

40. The Irish Times: the rebound

The Irish Times, headquartered in Tara Street Dublin, is owned by The Irish Times trust. 

The newspaper industry’s decline started in the early 2000s. First online ads drove down the price of classified ads, then circulation started falling. The fall has been quite uniform across the world, in both big and small newspapers.

The exception to this is the handful of quality titles that can command a national audience. The New York Times and Washington Post in the US are examples. Both papers have seen their subscriber numbers grow strongly in the last six years. 

There are signs that The Irish Times may be in that second category. Its revenues are up 50 per cent since 2017, to €110 million in 2020. Operating income moved from a €600,000 loss to a €3.8 million profit between 2016 and 2020. 

In that time the newspaper has added staff. 437 were employed at the paper in 2016, and by 2020 that number was up to 818. Though headcount has gone up, the paper has kept a lid on salaries by hiring younger staffers. The average salary has fallen from €84,000 in 2016 to €65,000 in 2020. 

I’m forecasting €4.5 million operating profit in 2021. Because the newspaper is not investing heavily in capex or working capital, most of that goes straight to the firm’s investors, which amplifies its value.

The DCF values The Irish Times at €77.3 million, compared to €135 million using the industry multiple. 

38. Collen Construction: 121 years in a volatile industry

Collen Construction is a general building contractor headquartered in East Wall, Dublin. Collen has the distinction of being Ireland’s oldest general contractor, with a 211-year history. Collen built iconic Irish buildings like the RDS in Dublin, Killarney house, the Barrow Street grain silo and the 1950s stands at Croke Park. 

Surviving in the construction industry is not easy. It’s an industry that’s about three times as volatile as the rest of the economy. Construction firms that get greedy and take on too much work in-house are usually the ones that don’t survive. After 121 years, Collen is still owned by the Collen family, and Neil Collen serves as Chairman. It employs 320 people. 

Collen made €6.9 million in 2019. At its trajectory, it would be expected to make €9.5 million in 2021. It’s worth €80.5 million by the DCF model, and €109 million by an industry multiple. 

36. Anord Mardix — right place, right time

Anord Control Systems was founded in Dundalk in 1969. It provided electrical control systems, and worked on major Irish projects like the Ringsend water treatment plant and the Luas.

What turbocharged the business was the arrival of the data centre industry. Electrical hardware for data centres, such as switchgear and busbars, are now its main focus.

In 2018 Anord attracted the interest of private equity, when it was sold to Bertram Capital. Shortly after, Bertram merged Anord with Mardix, a UK-based competitor. The firm now has 400,000 sq ft of factory space in six locations in Ireland, the UK and the US. 

The business made an operating profit of €12.9 million in 2019 and would be expected to make €16 million by 2021. It’s a fairly capital-intensive business, with relatively high reinvestment rates. 

Another important issue in Anord Mardix’s valuation is that company-specific risk is quite high in its industry. In other words, there’s a big range of outcomes among telecom equipment companies. Some do very well, others crash spectacularly. 

That’s an important factor when you’re considering whether the potential buyer of the business is private or public. If the buyer is private, they’re totally committed to Anord Mardix. Their risk is concentrated. 

If the buyer is public, they’re only buying a slice of Anord Mardix as part of a diversified portfolio, so their risk is diversified. This means the public buyer doesn’t have to worry about the risk of Anord Mardix in particular screwing up, since she has a portfolio of companies. Diversification gets rid of company-specific risk. In an industry like this, where company-specific risk is big, that drives down private valuations relative to public ones. 

The DCF, which is valuing the business for a private buyer, valued Anord Mardix at €94.9 million. The industry multiple (for a public buyer) values it at €205 million.

34. The Stafford Group: corporate Habsburgs

The Stafford Group is headed up by Mark Stafford, the great-grandson of its founder J. J. Stafford. 

The company got its start in shipping in the 1890s. From shipping it moved into groceries, and from there into coal importation. By the 1940s, The Stafford Group was the largest coal importer in Ireland.

Next the Stafford Group doubled down on fuels, building an oil storage facility at New Ross in Wexford. It also moved into plastic and fabric manufacturing. 

By 2000, when Mark Stafford took over the management of the business, Stafford was primarily an oil distributor. He made the decision to divest into clothes retail in 2005, acquiring Lifestyle Sports for €60 million. 

Since 2005 Stafford has sold off its oil businesses (partially to LCC, another company on the list). Now it’s a pure play clothes retailer. 

What the Stafford Group has achieved here is unusual. Most companies arise to do one specific thing, serve their purpose, and then die. It’s rare for a company to sidle from one industry to the other, buying into a growing business while divesting from a shrinking one. They remind me of the Habsburg empire, which spread over the centuries from Austria to Spain to Belgium to Northern Italy, and back to Austria.

Lifestyle Sports is in good nick. It made €6.8 million in operating profit in 2019, and I’m forecasting growth to €9 million by 2021. This values the business at €74.7 million on a DCF basis, or €152 million using an industry multiple. 

32. Abbey Capital: Northside high finance

Like in the Pharma industry, Ireland is home to many of the world’s top financial services businesses. What it lacks is top class indigenous financial services companies. 

Abbey Capital is among the exceptions. Based on Parnell Street on Dublin’s Northside, Abbey Capital was founded by Tony Gannon and Tim Brosnan. It manages what are called futures funds. One leg of its business is to sell its funds to institutions and private clients, the other is to trade its own money on the futures market. It uses, it says, a “short-term proprietary trading strategy aimed at generating profits while maintaining tight risk management control”. In 2020, about one third of pre-tax profits came from the in-house trading business, with two-thirds coming from funds managed on behalf of clients. 

Abbey Capital is another highly efficient business. Its 60 employees are expected to make 13 million in operating income in 2021 — that’s €213,000 per employee. Gowan Group, by contrast, makes €19,000 per employee. And in balance sheet terms, Abbey Capital makes a 41 per cent return on capital employed. Its reinvestment needs are also low. 

The DCF values Abbey Capital at €111.6 million, where industry multiple values it at €332 million. 

30. Supermac’s: Ireland’s favourite chips

The first Supermac’s was in Ballinasloe, Go Galway. Now there are 118 of them across Ireland. It has expanded from burgers and chips to Papa John’s pizza, Bewley’s coffee, Habaneros Mexican, and Supersub sandwiches. The company also owns six three- and four-star hotels in the west of the country. 

The company was founded by Pat McDonagh, and is headquartered in Ballybrit, outside Galway city. 

Supermac’s made €25 million in operating profit in 2019. Growth is modest so I’m forecasting 2021 operating profit of €27 million. Based on that the DCF values Supermac’s at €108 million, and an industry multiple puts it at €387 million.

28. Graham Construction: UK-focused builder

Graham Construction is a major construction business, based in Hillsborough in Northern Ireland. As is common for Northern Irish businesses, Graham is focused heavily on Great Britain. Graham has also been active in the US, having completed hospital projects in Cedar Rapids and Ringgold, Iowa.

Graham was founded in 1981 by John Graham. His son Michael Graham is now executive director of the business.

Graham is a steady business, earning £12 million operating profit in 2020. Next year, it would be forecast to make the same again. The DCF values Graham at €110 million, in euro terms, and €197 million on an Ebitda multiple basis.

26. Bon Secours: Safe and valuable

Bon Secours Hospital Group is a private hospital group headquartered in Glasnevin, Dublin, with sister hospitals in Limerick, Cork, Tralee and Galway. It employs 3,320 people. 

It was acquired in 2019 by the Bon Secours Mercy Health, an Ohio-headquartered US group that runs 50 hospitals.

Bon Secours has a fair bit of debt. The average company on this list can cover its interest payments 27 times from operating income; Bon Secours can cover payments only 2.7 times. Why all the debt? Hospitals tend to fund themselves with more debt than other industries. Aswath Damodaran, a finance professor at NYU, calculated last year that hospitals use more debt than 90 of the 94 industries he surveyed. 

Why do hospitals borrow so much? Because healthcare isn’t a discretionary item. You can’t cut back on hospital visits when money is tight. That means hospital earnings are stable. And it means hospitals can fund themselves with debt without worrying that a bad year could wipe them out. More debt means more profit left over for shareholders. 

Last year it made €2.5 million in operating profit, based on the trajectory of recent earnings I’d expect it to make €4 million in 2021. That values it at €119.8 million, or €187 million on an industry multiple basis. 

Why is it valued so highly with relatively skimpy profits? It goes back to the fact that healthcare is non-discretionary, meaning earnings are less volatile, meaning they’re discounted by a smaller amount and therefore more valuable in the present. Supermac’s earnings are discounted by 16.9 per cent, whereas Bon Secours’ are discounted by 10.5 per cent. The discount rate makes a huge difference. 

24. Dale Farm: Scale business

Dale Farm is a Northern Irish dairy Coop. Started in 1969, it’s 100 per cent owned by 1,300 farmers. 

Dale farm owns the Dromona butter and cheese brands, Mullin’s ice cream, Rowan Glen and Spelga yoghurts. 

Dale Farm made £12.3 million in operating profit in 2020, and would be expected to make £14 million in 2021. It made £12.3 million on a turnover of £486 million, a margin of 2.9 per cent. This goes to show dairy processing is both lucrative (£12.3 million is a lot!) and that it runs on tiny margins (the average operating margin among listed US companies is 9.5 per cent).

The DCF values Dale Farm at €142 million in euro terms; the industry multiple puts it at €143.

22. PM Group: Growing with pharma

PM Group commissions, designs and builds high-tech factories. Two-thirds of its work comes from the pharma industry, with the rest coming from food, medtech and other advanced manufacturing. 

The company was founded in 1973 by Jim Walsh and Brian Kearney, two engineers. Headquartered in Tallaght, it has grown to employ more than 3,000 people. It has offices in Belgium, China, India, the UK, Switzerland, Singapore and the US. The company doesn’t break out the sources of its revenue geographically. 

PM Group made €20.8 million in 2019. In 2021 I’m forecasting it’ll make €24 million. That values the business at €165 million, or €313 million using an Ebitda multiple.

21. Smyths Toys: Ireland’s new retail giant

Smyths Toys is surely Ireland’s biggest retail success story since Primark. It was set up by Birdie and Paddy Smyth in Claremorris in 1983. Selling toys was originally a side business at the Smyth family pub. 

Now Smyths has 21 stores in Ireland, seven in Northern Ireland and 104 in the UK. The business was inherited by four of the sons, Tony, Padraig, Liam and Tommy, with Tony and Padraig most actively involved. They run it from the company headquarters in Galway City.

Then Smyths did an audacious deal to acquire 93 Toys’R’Us stores in Germany, Austria and Switzerland. The deal will bring its overall store count to more than 200. 

It reported €19 million in operating profit in 2019, but once the acquisitions and store opening have been worked through I’m forecasting €27 million in 2021. That gets to DCF value of €181 million, or an industry multiple value of €510 million. 

20. The Blackrock Clinic: Building an empire

Much has happened at The Blackrock Clinic since these accounts were updated on December 31, 2019. Larry Goodman has assumed full control of the company, having squeezed out co-founder Dr Joseph Sheehan in court. It then took full control of the Galway Clinic, and the Hermitage Hospital. 

The accounts for Blackrock Hospital Limited and Subsidiary don’t show any of this. And, given Larry Goodman’s preference for secrecy, they may not even tell the full story of that hospital.

The company employs 750 at its hospital in Blackrock, Dublin. It made €11.8 million in 2019, and by 2021 I would expect that to reach €15 million. The DCF values the company at €188.9 million, and an Ebitda multiple values it at €301.3 million. 

18. Actavo: Righting the ship

Actavo has had an eventful history. Originally known as Siteserv, it was bought by Denis O’Brien from the IBRC for €45 million in 2012.

It specialises in labour-intensive technical work. Its industrial division builds complex scaffolding, maintains equipment, installs insulation and cladding, cleans, paints and removes asbestos.

O’Brien rebranded Siteserv as Actavo and set about building the company up. Between 2012 and 2016 the company went into empire-building mode, expanding into the US, Kazakhstan, and the UK. Then CEO Sean Corkery said in 2015: “An initial public offering could be an enabler in terms of financing.” 

The wheels came off around 2015-2016. Actavo was heavily indebted, and the new business lines turned out to not be very profitable. Since 2016, the company has been undoing the damage from the go-go years. 

In its most recent accounts, which are from 2019, Actavo reports a hefty operating loss. But it’s in the process of backing out of its most unprofitable businesses. In its ongoing businesses, it made a €9.3 million operating profit. Projecting forward to 2021 gives an €11 million operating profit. 

The DCF values Actavo at €189 million, but I’m suspicious of that number. It’s amplified by the fact that Actavo’s net capex in 2019 was minus €13.6 million. The DCF projects that forward into eternity and suggests Actavo can maintain its earnings while effectively liquidating its assets. Clearly, that’s a temporary phenomenon, and unsustainable. If you assume in the long term that net capex goes to zero, Actavo is worth €106.8 million. In that scenario, an industry multiple values Actavo at €185 million. 

16. Lakeland: Size through mergers

Lakeland is a dairy co-operative based in Cavan. It was formed in 1990 through the merger of two historic co-ops, Killeshandra (established in 1986) and Lough Eglish (established 1902).

Scale being the name of the game in the dairy processing business, Lakeland completed a big merger with Lacpatrick Dairy Co-op in 2019. It’s one of the five big co-ops in Ireland along with Kerry, Glanbia, Carbery and Ornua. 

Lakeland made €20.5 million in operating profit in 2019 and I’m forecasting €23 million in 2021. That values the business at €219.4 million, or €693 million using the industry multiple. 

15. Arrow Group: Diversified food processing

As any farmer will tell you, farming is a tough business. The farmer has very little control over how much money they make from year to year, and margins are slim. They take prices from the beef processors, who use their scale to dominate the industry. 

The Queallys of Waterford are the rare farmers who managed to break out of their corner. They built a food processing business of their own and added value-added branded products to the mix too. 

The Arrow Group is their business. It processes beef and pork, trades in meat, manufactures pet food, and manufactures branded food and drinks. Now Dawn Farms Foods, Arrow’s food ingredients business, is Arrow’s most important profit centre. 

Arrow group made €27 million of operating profit in 2020, and would be expected to make €28 million this year. That translates to a DCF value of €219.5 million, or an industry multiple of €775.7 million. 

14. Mannok: A great business, stuck in limbo

Mannok emerged from the wreckage of the Quinn empire, what used to be called Quinn Industrial Holdings. Its most important business is in cement and building materials. 

It was bought out by three hedge funds in 2014: Silver Point, Brigade Capital and Contrarian Capital for €98 million. Since then, sales have risen 44 per cent, and staff numbers have risen 25 per cent. 

Finance buyers usually look to sell within five years. They are not in the business of long-term ownership. But shortly after the hedge funds engaged banks to sell Mannok in 2019, Mannok executive Kevin Lunney was kidnapped and tortured by angry locals. 

The business has been in limbo since. Though the trading business is performing strongly, it doesn’t have the committed long-term owners it needs, since its hedge fund owners can’t offload it. The torturers have inflicted real damage on the company and the region.

Mannok earned €12 million in operating profit in 2019. I’m forecasting that’ll rise to €15 million in 2021. That values the business at €243.7 million using the DCF, or €348.5 million using in industry multiple. 

13. Sisk: Size helps

Sisk is Ireland’s biggest builder. It’s been passed down through five generations of the Sisk family and is now controlled by the brothers JP, Owen and Richard Sisk. 

The Sisks have employed a few strategies to keep the business going for 160 years. Construction is a highly discretionary industry (you can always do without building something new), so it’s highly risky. The Sisks responded to this by dialling down the two other measures of risk as much as possible: operational and financial risk. They reduce operational risk by lowering their fixed costs as much as possible; they reduce financial risk by refusing to borrow money. 

They reduce operational risk by subcontracting work to others. That allows them to neatly scale the business down when work dries up. It also allows them to manage cash flow by delaying payment to suppliers. It’s a benefit that comes with being the biggest in the industry. The amount Sisk owes to suppliers went up by an average of €45 million in each of the two years between 2018 and 2020. 

2020 was a bad year for Sisk, with Covid-19 and all. It made €23.7 million in operating profit. In 2021 I’d expect Sisk to get back on track and make €30 million. This translates to a DCF value of €245.9 million, or an Ebitda multiple of €324.5 million. 

12. Ballyvesey: Ireland’s biggest logistics company

Ballyvesey Holdings is headquartered in Newtownabbey, County Down. It’s owned by the Montgomery Family. 

Montgomery Transport was Ballyvesey’s original business. It has since acquired transport and logistics companies East-West Transport and JE Coulter. It also owns truck franchises for DAF, Fiat, Mercedes and Scania, as well as dealerships for plant companies Atlas, Bobcat, Genie, Mecalec, Sany and Terex. In addition, it owns rental fleets in the UK. And in 2018 it acquired a UK fuel distribution business, Morrey Oils. 

In its 2019 accounts, Ballyvesey was cooling down after a busy period of acquisitions and investment. As a result, its capex figure was quite a bit below its depreciation and amortisation. That boosted the company’s value in the DCF. 

On £5 million of forecast 2021 operating profit, the DCF valued Ballyvesey at €255.5 million. The Ebitda multiple valued it at €369.1 million.

10. Dairygold Co-op: Ireland’s biggest

Dairygold is based in Mallow and serves the farmers of the fertile Golden Vale region. It is still 100 per cent farmer-owned, by 7,000 individual farmers. 

As we’ve seen, dairy processing is a scale business. Margins are tight. But that doesn’t mean there’s not a great deal of money to be made.

I’m forecasting €30 million operating profit this year, which translates to a DCF value of €306.3 million. The industry multiple values it at €920 million. 

9, 6 & 4: Winthrop Engineering/Jones Engineering/Mercury Engineering: Ireland’s exporting superstars

Each of these three companies — Winthrop Engineering, Jones Engineering and Mercury Engineering — are mechanical and electrical contractors. 

Winthrop is controlled by founder Barry English and is headquartered in West Dublin and comes in at number nine on the list. 

Jones Engineering is more than 60 per cent owned by Eric Kinsella, and is based in Ballsbridge. Kinsella is based in Switzerland and is known for his philanthropy. It ranks at number six.

Mercury Engineering was founded in 1972 by Frank O’Kane and Joe Morgan. Its current CEO Eoin Vaughan took over in 2014, and is now the largest shareholder. It ranks at number four.

Mech and elec contractors have always been an important part of any project. The mechanical and electrical components of a building are complex, and they have to be installed correctly first time. Any old construction company can’t move into mechanical and electrical engineering. This meant mechanical and electrical engineers get to charge a premium for their services. And it shows up in the margins earned by the big three contractors, Winthrop Jones and Mercury.

Complex industrial buildings are the speciality of these engineering companies. The sums invested are huge, and the mech and elec component is critical. What started to dramatically change their fortunes was the data centre boom. A 2013 report by the US data analyst group 451 Advisors forecast Ireland was about to become a European capital of data storage based on its connectivity, political stability, renewable energy and mild climate. 

Mech and elec contractors are the rare example of an indigenous Irish exporting success story. These contractors have built on their experience building high tech industrial units for FDI companies operating in Ireland (for example, Mercury helped build Intel’s plant at Leixlip). Now they are exporting all over Europe. While Jones doesn’t break out its revenue by geography, Mercury says it derived more than three-quarters of its revenue from continental Europe in 2019, and figures seen by The Currency show Winthrop made two-thirds of its revenue outside of Ireland.

A weakness of this valuation list is that it doesn’t capture growth well. This is for two reasons. The first is that the model I’m using is a “mid-life” model, which doesn’t assume a lot of growth. The second reason is that my sources are published accounts, which in many cases are two years old. 

Going on 2019 published accounts doesn’t give a good picture of what’s happening with these engineering companies. However, my colleague Ian Kehoe came to my aid when he published a story about the detailed financial prospectus for Winthrop Engineering. 

Winthrop made €23 million in operating profit in 2019. Based on the trajectory of recent earnings, and a vague sense that data centres are doing well, you might forecast 2021 earnings of €40 million. But Ian’s reporting showed the company is expecting to make €58 million in free cash flow in 2021 (free cash flow is a close approximation of my measure, which is operating profit less tax less investment). 

If I assume Winthrop’s growth rate is representative of the other two major mech and elec contractors, their forecast operating profits jump to €100 million (Jones) and €110 million (Mercury). Based on those earnings, the three firms are valued as follows. 

Winthrop Engineering is valued by the DCF at €429 million, and €599 million using an industry multiple. 

Jones is valued by the DCF at €703 million, and €1.05 billion by the industry multiple. 

And Mercury is valued by the DCF at €827 million, and €1.15 billion by the industry multiple. 

8. Beauparc: Bootstrapped to €1 billion

From a standing start in Beauparc, Co Meath in 1990, Beauparc has bootstrapped its way to the point where it’s big enough to be acquired by a major public company. Macquarie, The Australian investment giant, bought it earlier this summer for a price thought to be around €1 billion. 

Beauparc was founded by Eamon Waters. Between 1990 and 2015 he grew the business to be Ireland’s largest waste management company, under its Panda brand. In 2015 he started to move into renewables and in 2016 began to acquire rivals. Over two years Beauparc acquired Greenstar and Bioverda in Ireland, and WSR, Scotwaste, Newearth and AWM in the UK. 

The private equity giant Blackstone bought a 37 per cent stake in the business in 2019. And now, with the Macquarie deal, Waters and Blackstone have their exit. 

I’m forecasting €40 million of operating profit this year. That translates to a DCF value of €539 million and an industry multiple of €1.3 billion. 

7. Musgrave Group: Distinctively Irish

The Musgrave Group was founded in Cork City in 1876, where it’s still based. 

It’s a food wholesaler and retailer. It owns Supervalu, Centra, Mace (in Northern Ireland) and Daybreak. 

Musgrave’s model is unusual, for a grocer, in that it doesn’t operate the stores itself. It owns the brands, runs the TV ads, and supplies them. But the shops are run by independent franchisees.

The cost of this is that it makes the products on the shelves a bit more expensive, since there’s another layer which needs to make a profit. But the benefit of it is that the shop managers are close to the ground. They know their customers and adapt the stores accordingly. That’s why Supervalu shops have that pleasant (to me) and distinctively Irish feel you don’t get in Tesco. 

Musgrave made €89.4 million in 2019, and I’m forecasting €91 million in 2021. That gets to a DCF value of €684.5 million or an Ebitda multiple of €1.38 billion. 

5. Ornua: The power of a brand

Ornua is the name for Ireland’s dairy board and strictly speaking, it’s not an independent company. It’s owned by Ireland’s coops. 

However Ornua has grown into a much more valuable entity than the dairy groups that own it. 

Ornua’s job is to market Ireland’s dairy produce, which it does via the Kerrygold brand. And Ornua is good at its job. Kerrygold is the number one butter in Germany, number two in the US, and number three butter in the UK. In addition, Ornua sells Kerrygold-branded cheeses and spreads. 

The US business in particular has exploded in recent years. Before the imposition of Trump’s tariffs, Kerrygold had a record of ten consecutive years of double-digit sales growth in the US. 

In 2020, operating profits grew 69 per cent to €83 million. I’m forecasting more of the same, but a bit less so: €110 million operating profits in 2021. That values the business at €780 million by DCF, or €2.01 billion by an industry multiple.

2. Valeo: Greater than the sum of its parts

Valeo is a demonstration of the real-life power of financial engineering. 

It was created out of whole cloth by Seamus Fitzpatrick’s private equity house, CapVest, as a vehicle to bolt together Irish food brands like Batchelors beans and Roma spaghetti. Over 18 deals, Valeo acquired a stable of brands in Ireland, the UK and Europe. 

The whole — Valeo — turned out to be worth far more than the sum of its parts. As a bigger business, it was able to negotiate better terms with supermarkets, and produce more efficiently. And when it reached a sufficient size, it came on the radar of the private equity giant Bain Capital. Bain Capital bought Valeo in May for €1.7 billion.

I was pleased to see Bain’s valuation of the company tallied reasonably closely to that of my DCF model. Based on forecast 2021 operating profit of €105 million, the DCF values Valeo at €1.58 billion. An industry EV multiple values it at €2.39 billion. 

1. Eir: By far Ireland’s most profitable, and valuable, private business  

Eircom, which now trades as eir, has had a few owners in its day: the state, the people of Ireland, Tony O’Reilly, public investors again, Babcock and Brown, Iliad SA, and now, the NJJ Telecom Fund. NJJ is a fund controlled by the French billionaire Xavier Niel. The deal valued Eircom at €3.5 billion. 

My own DCF came up with a similar number. Eircom threw off €132 million of operating profit in 2021, and I’m forecasting based on the trajectory of the previous year that profits will grow to €142 million in 2021. Based on that, the DCF values Eircom at €3.4 billion, or €2.78 billion based on an industry multiple (one of the few examples of the multiple method valuing the company less highly than the discounted cash flow). That makes Eir, by some distance, Ireland’s most valuable limited private company.