Australian Firsts

VC Successes

Private Equity Successes

R & D Start Grants

Private Equity Success Stories

Affinity Health

Two private equity houses, Ironbridge Capital and CVC Asia Pacific, purchased Affinity Health. They demonstrated great finesse during the bidding process, had an innovative approach to issues such as long-tail medical malpractice liabilities and some off-shore hospitals and their detailed and thorough due diligence enabled them to attribute full value to an operational turnaround that was already under way. The result was a bid that provided the vendor with a compelling full deal solution. Having secured the business they reversed a strategy of centralisation of control and concentrated on improving relationships with doctors. They introduced internal peer groups for benchmarking and forced a much greater focus on operational KPIs.
http://www.ironbridge.com.au/affinity.htm

Atlas Steels

Atlas Steels is a large processor and distributor of stainless and speciality steels in Australasia. It was bought by Quadrant Capital. Key success factors in the buyout included recruitment of a new managing director. The business was expanded with warehouses in Gladstone & Wodonga, more steel products were pushed down the distribution channels, and joint ventures established in Malaysia & Thailand. As a result revenues increased by over 20% and EBIT nearly doubled.
http://www.atlassteel.com

Austal Ships Limited

Austal Ships Limited, "Austal" received $15 million of venture capital in 1994 when it had sales of $40 million and only one product line (a 40m fast ferry). Since 1994 sales have increased to $183 million and it now produces a range of ferries, customs patrol vessels and other ships as required. Austal employees 1,100 people as compared to 180 back in 1993 and is listed on the ASX with a market capitalisation of approximately $250 million and after tax profits more than $20 million per year.
http://www.austal.com

Austar

Austar was in serious financial difficulties in 2002 but AVCAL member, CHAMP thought that nevertheless Austar had developed a solid core business. CHAMP also believed that the Pay TV industry was at an inflexion point. Together with a strategic partner CHAMP acquired the US bondholders’ rights to 82% of the equity of Austar. Post acquisition, the Austar management team were free to focus attention on the core subscription TV business, improving the key metrics of new subscriber growth, churn and ARPU (average revenue per user). This resulted in greatly enhanced earnings and a more than six fold increase in the market capitalisation of Austar.
http://www.austar.com.au/default.asp

Bluestone Mortgages

Bluestone Mortgages commenced operations in December 2000 and is one of Australia's fastest growing non-conforming mortgage lenders. The non-conforming mortgage market, which specialises in loans for borrowers who do not fit the lending criteria of traditional home lenders, is a rapidly growing niche. Borrowers who are self-employed, have recently arrived in Australia, are over 55 years of age, or who have had credit problems in the past, all fall within the non-conforming category. Bluestone was backed by AVCAL members, RMB Capital Partners and Crescent Capital Partners
http://www.bluestone.com.au

Breezway Australia

Breezway Australia represents the buyout of the specialist manufacturer of louvre windows from James Hardie Industries. The deal exhibited an internal rate of return (IRR) of 375%. Breezway was spun out as a separate entity from the Trend window business. The deal shows the power of cashflow with management releveraging the business to buy out AVCAL member, Crescent Capital Partners.
http://www.breezway.com.au

Brown & Dureau

At the time of the management buy-in in 1998, Brown & Dureau generated annual revenue of $50 million as a division of Amcor. With investment and support from Catalyst, the company expanded its operations and grew to annual turnover of approximately $70 million.
http://www.amcor.com/default.aspx?id=663

Childcare Centres Australia

AVCAL member, JT Campbell & Co., recognised and moved quickly to capitalise on a short-lived arbitrage opportunity between the valuation of public and private assets in the child care sector. In 4 months they consolidated 30 'long day care' facilities and floated the group as Child Care Centres Australia. This process involved innovative use of long-dated call options to maximise leverage, rapid and uncompromising diagnosis of problems, dynamic evolution of management and designing the business from the start with the exit in mind.

Claypave

Claypave is a specialist clay paver manufacturer in Queensland. By investing $5.6M in December 1997 to acquire 49.9% of the business Quadrant Capital Fund supported the vision of the founding shareholders who wanted to stage an MBO and defeat a bid from a trade buyer. During the period of the investment exports increased from 5% to 50% of sales. An IRR of 58% was achieved.
http://www.claypave.com.au

Dexion

AVCAL member, CHAMP Ventures purchased Dexion, a leading supplier of storage and materials handling solutions in the Asia-Pacific region and some Middle East markets. During the period of ownership, the company achieved significant revenue and earnings growth by successfully executing a number of growth strategies, by re-investing in the Dexion brand and by launching a new shelving product.
http://www.dexion.com.au

Flexirent

Flexirent is a leading provider of point of sale "micro-ticket" financing to SME's and consumers for the purchase of IT products. In February 2003, AVCAL member, CFSPE provided funding to facilitate expansion and the partial sell-down of one of Flexirent's shareholders. By early 2005, when CFSPE sold its shareholding to Flexirent's founders, the business had achieved significant profit growth, diversification of its funding providers and expansion into new products and markets. The strong return on CFSPE's initial investment was indicative of these achievements.
http://www.flexirent.com.au

Frucor Beverages Group

Frucor was acquired by AVCAL member, Pacific Equity Partners in 1998, floated in 2000, and acquired by Groupe Danone in 2002. During PEP’s involvement with Frucor, the Company grew threefold in terms of revenue and profits. It pioneered new product categories such as energy drinks with its highly successful "V" brand and sports water with "Mizone". It also became the exclusive bottler of Pepsi products in New Zealand, responsible for manufacturing and distributing the family of Pepsi brands.

Hastie Airconditioning

contractors and servicing businesses in Australia. AVCAL member, RMB Capital, was introduced to Hastie and were very impressed with the company's management team, track record and expansion plans. Jointly a plan was developed to acquire Direct Engineering Services (DES) to allow Hastie to fulfill its strategic plan of a full national service offering. In August 2001, RMB invested in Hastie and the funds from that investment were used to acquire DES. DES's operations are located in all states of Australia with the exception of NSW, so combined with the Hastie operations a very tight fit was achieved. In addition to air conditioning contracting and servicing work in Australia, DES also perform a substantial amount of work offshore in the marine and shipbuilding industries with work being conducted in shipyards from Ireland to Poland to Korea to Singapore. Combined the two businesses have a turnover in excess of $150 million and over 500 employees. RMB's investment has provided the expansion capital to inegrate the two companies. This new group emerges with all the strengths needed to be fully competitive in today's increasing globalisation of engineering and construction organisations.
http://hastiegroup.com.au

Hotel Dynamics

Colonial First State Private Equity (CFSPE) completed a management buy-out of Hotel Dynamics, the world's leading provider of hotel loyalty programs, in July 1999 alongside key executives of the business. Assisted by CFSPE and under the leadership of chief executive Robert Davis, the group was quickly transformed from an owner-operated business to a corporate operation in over 40 countries. In March 2002, Hotel Dynamics was sold to RCI, a subsidiary of Fortune 500 company Cendant Corporation, delivering returns to CFSPE and the company's management team of at least four times their initial investments, representing an internal rate of return (IRR) of over 63%.
http://www.hotel-dynamics.com

IPAC Securities

IPAC is one of Australia's leading wealth management businesses, servicing more than 25,000 clients throughout Australia and managing over $5 billion in funds for investors. A private equity house, UBS Capital, (now Affinity Equity Partners) assisted IPAC with corporate governance, financial reporting and management systems, cost control, acquisitions, external debt financing and then exit planning and execution ahead of its sale to AXA Asia Pacific.
http://www.ipac.com.au/ipac/ipac.nsf

JB Hi-Fi

In July 2000 Macquarie Direct Investment acquired JB Hi-Fi for A$42M, with A$14M of equity, A$25M of senior debt and A$3M of mezzanine debt. In an example of how a private equity fund can provide far more than cash, Macquarie contributed strongly to the investment’s success through deep involvement in securing the management team, developing the expansion strategy and leading the IPO in October 2003 at an enterprise value of A$175M and a market capitalisation of A$148M. The internal rate of return on the investment was 88% and 6.5 times invested capital.
http://www.jbhifi.com.au

John West Foods

In July 2003 Archer Capital completed the acquisition, in partnership with Simplot Australia, of the John West Foods business from Unilever Australasia. The John West Foods business held the dominant position in the $450 million canned fish market, a market which had been growing strongly over the past five years on the back of consumer preference for fish as a protein of choice. Archer Capital funded 50% of the purchase, which included the brand rights for John West, Seakist and Ally in Australia, New Zealand and Asia, and led the arrangement of bank finance for the acquisition. Simplot is one of the largest and most successful operators in the Australian seafood market and is also an exceptional brand manager across a number of major food categories. As a result of marketing and operational initiatives implemented during the period of joint ownership, John West Foods’ earnings were substantially increased. In October 2005, Simplot acquired Archer Capital’s 50% stake in John West, delivering Archer Capital a solid return on its investment while capturing for itself a low effective purchase price multiple on what was proven to be an excellent business. The strategic partnership between a corporate buyer and a buyout firm, while common in the US and UK, was unusual in Australia and represented another step forward in the development of Australia’s buyout industry.

Just Group

In November 2001 Catalyst purchased Just Jeans Group for an enterprise value of A$128M. Despite strong brand names and a long track record of profitability Just Jeans was unloved by the ASX market and the 60% owner (the Kimberley family) was looking to sell. The success of the investment was driven by a number of factors including the acquisition of two new retail chains, the sale of a loss-making chain and significant investment in information technology and distribution. The IPO of the business for an enterprise value of A$573M in May 2004 delivered an IRR of 157%.
http://www.justgroup.com.au

Loscam

Loscam is a pallet and returnable packaging business. It is the market leader in pallet hire in SE Asia and has 20% market share in Australia . DB Capital Partners acquired the business in a very competitive auction, having agreed before close, a very detailed strategic and operational plan with the management being brought in. The business was successfully re-branded within one month of purchase. It exceeded budget each month following the acquisition and hit its 5 year target EBITDA in the second year of ownership. A major driver of success has been significant organic growth in Asia . DB Capital sourced the incoming CEO through its Melbourne network and led the dual-track exit strategy which involved the prior negotiation of a stapled debt package to set a benchmark value and reference point for potential buyers.
http://www.loscam.com

Pacific Brands

Pacific Brands is a leading manager of well-recognised consumer brands including Chesty Bond. In November 2001 AVCAL members, CVC Asia Pacific and Catalyst led a consortium of investors to buy the business from Pacific Dunlop. At the time the deal was the second largest Australian LBO ever. Considerable improvement was made to the business by initiatives such as an increased ad spend, a 163% increase in staff training expenditure and a strong focus on working capital. The business IPO-ed in April 2004. The investment achieved an IRR of 141%.
http://www.pacificbrands.com.au

Plessey Asia Pacific

RMB Ventures invested in Plessey Asia Pacific in 1998 when Plessey Corporation decided to sell the business. Plessey Asia Pacific owned 70 per cent of PlesTel, with Telstra holding the remaining 30 per cent. RMB's support, including additional funding during 2000, helped Plessey Asia Pacific continue to expand this business into Australia's leading supplier of communication solutions to the small to medium enterprise market.

Primary Health Care

Primary Health Care operates large centres (medical supermarkets) around NSW. The company provides premises, equipment and a comprehensive range of other services to doctors and other health care providers at its facilities.
http://www.phcris.org.au

Pumpkin Patch

In November 1999 Quadrant invested $9.1M for 20% of Pumpkin Patch, the largest supplier of exclusively branded children’s wear in Australia and New Zealand. This investment enabled an accelerated store rollout in Australia. Pumpkin Patch IPO-ed in June 2004 delivering an IRR (“internal rate of return”) of 40%.
http://www.pumpkinpatch.com.au

Repco

Archer Capital co-led the $255 million acquisition of Automotive Parts Group Holdings (now "Repco Group"), formerly Pacific Automotive, from Pacific Dunlop Ltd in September 2001. Repco is the leading automotive aftermarket parts and accessories wholesaler and distributor in Australia and New Zealand. Repco's management team acquired a significant minority shareholding in the business as part of the MBO arrangements. The business was operationally re-shaped in the first 12 months of ownership, with IT functions reinstated and service levels improved to regain lost share, distribution centres rationalised, the wholesale division sold and excess working capital identified and eliminated. Over $100 million of cash was generated in the first 12 months, enabling a recapitalisation that returned to investors the equity invested originally. With operations streamlined Repco further leveraged its inherently strong market position, with EBITDA increasing 25% from 2001 to 2003. Repco was exited via an IPO in November 2003.
http://www.repco.com.au

Riviera Group

In October 2002, Gresham Private Equity lead the $180 million management buyout of The Riviera Group Pty Ltd ("Riviera"), Australia's leading producer of luxury motor yachts and cruisers. Riviera designs, manufacturers and sells Riviera and Mariner branded motor yachts through an extensive domestic and international dealer network. Gresham lead the buyout, providing institutional equity together with GIC Special Investments Pte Ltd, with ANZ arranging the debt facilities provided by ANZ and The Bank of Scotland. Riviera designs and manufacturers large luxury yachts between 29 and 58 feet in length. The Riviera brand is mainly used on flybridge boats, otherwise known as luxury sport fishers. Riviera branded boats are sold in Australia and exported to 25 countries, with the USA being the most significant overseas market.
http://www.riviera.com.au

Sydney Aquarium

Advent invested in the Sydney Aquarium located at Darling Harbour in an expansion capital deal. During Advent’s involvement, the focus on domestic tourism was shifted by lifting the attraction’s profile to that of a world- class attraction with a strong inbound tourism base. A stock market listing resulted in Advent achieving an IRR of 26% over three years.
http://www.sydneyaquarium.com.au

Tasman Building Products

Tasman Building Products (the non-timber/pulp/paper building material businesses of Carter Holt Harvey) was bought by AVCAL member, Archer Capital which saw value in a conglomerate's non-core asset. Tasman had strong brand names such as "Pink Batts" and a well balanced portfolio of products which delivered consistent cashflow through the building cycle. Described as "a classic buyout", returns were driven by buying well and timing the exit, a strong focus on working capital pushed by Archer, long overdue capital expenditure and some key senior executive appointments.
http://www.ampcapital.com.au/institutions/privateequity/trackrecord.asp

Vision Systems

Over an eight-year period, H-G Capital supported the growth of Vision Systems from annual revenue of $14 million to $300 million. Vision Systems consistently achieved growth rates of more than 25 per cent and, in the year to June 2001, achieved revenue growth of 53 per cent. The company listed on the Australian Stock Exchange in 1999.
http://www.vsl.com.au