Australian Private Equity & Venture Capital Journal // September 2014

$336m frequent flyer deal
ready for takeoff
Radiology sector attracts
new growth investment
Post escrow shares sale
returns $579m Image: A Custom city bus
SEPTEMBER 2014 · Year 22 No 245
Story page 6

CONTENTS
FEATURES
LOCAL RETAIL SECTOR HAS
GLOBAL APPEAL 19
UK BACKS HIGH TECH TO LEAD RECOVERY 22
REARVIEW MIRROR 24
EDITOR’S LETTER
Sovereign funds see value in PE 3
PERFORMANCE
Post escrow shares sale returns
$579m 5
Syndicate partially exits New
Zealand glass manufacturer 6
$150m raised in satellite
communications float 6
Lower mid-market firm exits New
Zealand bus operator 8
Private equity outperforms listed
equities over latest year 10
Listed manager doubles assets under
management 13
Life sciences venture firm exits
US investment 16
Range of alternatives return 14.8
per cent over eight years 16
INVESTEE NEWS
Poultry business rationalisation
underway 12
Plant virus protection attracts global
agri-business 14
US media executives mentor Sydney
start-up 17
Wireless charging test offered to
electronic device makers 17
PEOPLE MOVES
Global buyout firm recruits locally for
Indonesia push 13
Placement agent swaps London for
Hong Kong 15
NEW FUNDS & FUNDRAISING
New Zealand-Taiwan fund achieves
$NZ88m first close 8
Global manager offers discounts on
management fees 11
Asian region fund approaching target 14
Listed alternatives fund makes large
allocation to water 14
NEWS
$US100bn fund to allocate up to
15 per cent to private equity 8
City may offer share in $NZ2bn
commercial assets 15
‘Company to watch’ acquired for
$80m 17
INVESTMENT ACTIVITY
$336m frequent flyer deal ready
for takeoff 4
Radiology sector attracts new
growth investment 4
Second bidder emerges for wine
company 5
Turnaround firm in bus body builder
restructure 6
Local venture firm leads $US6m
funding round in Israel 10
Global firm to make first real estate
investment in Australia 12
Further $8.7m for data centre
monitoring technology 12
Growth fund takes stake in beauty
treatments business 12
Corporate venturer invests in data
collection business 13
$1m funding for development of
new products 13
Healthcare company in $3.6m capital
raising 15
INFORMAL venture capital
Jet pack raising reaches $NZ3m 15
CONFERENCES & ROUNDTABLES
Investors to examine strategies
at start-up event 17
Coming Events
Coming Events 26
Shares Chart
Shares Chart 27
Australian Private Equity & Venture Capital Journal SEPTEMBER 2014 · Year 22 No 245 | 2

Editor’s Letter
AUSTRALIAN PRIVATE
EQUITY & VENTURE
CAPITAL JOURNAL
Owned and Published by
PRIVATE EQUITY MEDIA
PO BOX 510, Five Dock,
NSW 2040
P: 02 9712 1350
www.privateequitymedia.com.au
MANAGING EDITOR
Adrian Herbert
P: 02 9712 1350
M: 0407 226 142
E: adrian.herbert@
privateequitymedia.com.au
NATIONAL ADVERTISING
MANAGER
Philip Thomson
P: 02 9489 0033
M: 0419 757 211
E: pthomson@
marketingforesight.com.au
DESIGNER
Odette Boulton
Australian Private Equity &
Venture Capital Journal is an
Independent publication. The
Journal welcomes editorial
contributions. All opinions are
those of the authors. All material
copyright Australian Private
Equity & Venture Capital Journal
and individual authors.
ISSN number: 1038–4324
SOVEREIGN FUNDS
SEE VALUE IN PE
The MySuper changes have driven
super funds to focus on cost reduction
with the result that private equity and
venture capital have been labelled as “high
fee” investments.
But what about returns net of fees? Super
funds have varying views of our industry
in this context. Some don’t see value in a
sector which requires long term commitment
yet is closely correlated to listed equities.
Others say they have tried it and it hasn’t
worked for them. A smaller number, but
including some of the largest, say they
make small allocations to private equity but
recognise it as important to boost long-term
returns.
Asset advisers generally agree that is
why private equity should be part of an
institutional investment, but only a small
part, say up to 5 per cent.
The Future Fund, however, places greater
importance on private equity. It now has
close to 8 per cent invested in the sector.
These investments include a couple of local
fund managers but are mainly with global
fund-of-funds and buyout managers.
Another sovereign wealth fund,
Singapore’s GIC Private (GIC), has even more
invested in private equity – 9 per cent – and
it is planning to increase that to as much as
15 per cent over time.
GIC says private equity investment enables
it to achieve better long-term returns
on its overall portfolio because private
equity offers the highest expected return –
although with the highest risk – among the
major asset classes.
Performance of individual private equity
deals can vary greatly, GIC says. Similar to
other asset classes, performance of private
equity can be impacted by global conditions
such as the 2008-09 global financial crisis,
although even in challenging years some
investments do well compensating for those
that underperform.
The higher returns of private equity are, in
part, compensation to investors for assuming
illiquidity risk. Underlying investments are
typically held for three years or longer and
private equity fund investments are difficult
to divest at short notice.
GIC says that as a long-term investor it can
afford to ride through private equity’s higher
volatility in expectation of higher long-term
returns.
So how has private equity performed
for GIC? Since it began investing in the
asset class in 1982, GIC’s private equity
investments have out-performed listed
equities.
The strategy? The bulk of GIC’s
investments are in developed markets
particularly in North America and Europe
and to a lesser degree in the Asian
region but it also has a substantial
presence in emerging markets particularly
in Asia.
GIC invests both via funds and directly
into companies, investing globally in
each strategy. In all, it has relationships
with about 100 private equity fund
managers and has about the same number
of direct investments either alongside its
fund managers or independently.
GIC invests across multiple industry
sectors but focuses on financial
services, business services, consumer
goods, healthcare, technology, media,
telecommunications and natural resources.
The sovereign wealth fund seeks to
invest only in top quartile fund managers
but also provides seed funding to promising
new funds.
Perseverance is clearly the key to success.
ADRIAN HERBERT
Managing Editor, Australian Private Equity
& Venture Capital Journal

INVESTMENT ACTIVITY
$336m frequent flyer deal
ready for takeoff
Affinity Equity Partners is to acquire a 35
per cent stake in Virgin Australia’s frequent
flyer programme for $336 million.
Announcing the deal on 29 August,
Virgin Australia Holdings (ASX: VAH)
said the transaction was intended “to
accelerate the growth of Velocity Frequent
Flyer and fast track its strategy to
become one of the world’s leading loyalty
programmes”.
A separate Velocity board is to be set up
with Virgin appointing the chairman and
having majority representation. Virgin said
it planned to maintain its majority holding
in Velocity.
The transaction is to be brought into
effect by Affinity purchasing Australian
dollar denominated convertible notes in a
Virgin Australia Group company. The notes
will convert after five years, immediately
prior to an exit by Affinity, on a change of
control event affecting the issuer of the
notes (excluding a change of control at
Virgin Australia level) or by mutual consent.
Affinity Australia and New Zealand head
Brett Sutton said Velocity Frequent Flyer
was one of Australia’s largest and most
successful loyalty programs.
“Velocity Frequent Flyer embodies
all of the key traits we look for in an
investment – a solid base business, strong
management and significant growth
prospects. Through this investment,
together with Virgin Australia, we hope to
rapidly grow the program and drive further
value in return.”
Virgin chief executive John Borghetti
said: “Affinity brings a wealth of experience
in driving rapid and sustainable growth
across a diverse range of businesses and
we look forward to working with them to
enhance value.”
The Velocity Frequent Flyer scheme has
been operating in Australia for nine years
and claims the widest retail offering of any
Australian programme. Recently added
brands include Starwood Hotel Group,
Australia Post and Aussie Home Loans.
The Qantas frequent flyer scheme has
frequently been mooted as a potential
private equity target but Qantas has said it
is not interested in selling.
Both Virgin Australia and Qantas
reported substantial losses in their annual
financial statements last month (August).
Asia Pacific regional private equity firm
Affinity has about $US8 billion in assets
under management. The firm has had
a Sydney office since it was formed in
2004. Current Affinity investments include
smallgoods manufacturer Primo Group
in Australia and poultry producer Tegel
Foods in New Zealand.
INVESTMENT ACTIVITY
Radiology sector attracts
new growth investment
Lower mid-market firm Advent Private
Capital has invested in the merger of
two large regional diagnostic imaging
businesses.
Merging Victoria-based Lake Imaging and
Queensland-based South Coast Radiology
will create Australia’s fourth largest business
in the radiology services sector.
Advent is believed to have committed
up to $50 million for a stake of around 35
per cent.
The deal follows European private equity
firm EQT acquiring Australia’s largest
radiology business I-MED Network for
$500 million in February (APE&VCJ, Mar 13).
Advent has taken a minority stake in
Lake Imaging alongside radiologists who
run the practices and Lake’s management
team, all of who have medical
backgrounds. The practices will continue
to operate under the Lake Imaging and
South Coast Radiology names.
Advent executive director Mark Jago
said: “Diagnostic imaging is a critical
and central part of quality healthcare
with sector growth exceeding 8 per
cent per annum over the last five years.
The combined group will have revenue
of about $150 million with over 50
radiologists and 600 employees operating
across four states.”
Advent was comfortable with being a
minority stakeholder alongside radiologists
who had built up individual practices,
Jago said. Historically, at least 50 per
cent of Advent’s deals had been minority
investments, it had started out as a
provider of development capital and it
had extensive experience in the healthcare
sector. The most recent health care
investment had been Genesis Care which
had been successfully exited to Kohlberg
Kravis Roberts (KKR) in 2012 (APE&VCJ,
Jul 12).
Jago said merging the two businesses
had not required structural rationalisation
as Lake Imaging had a dedicated
management team whereas management
of South Coast was decentralised.
Profitability would be improved primarily
by the Lake management team focusing
on upgrading services and improving
efficiency across all practices. Medicare
benefit schedules capped rates for most
services but the volume of demand was
growing and included increasing demand
for more expensive services which
required specialised equipment such as
MRI and CAT scanners. A larger and better
financed business would able to provide
these services more efficiently and should
be able to achieve benefits of scale in
purchasing. Improved financing would also
enable the business to better compete for
work such as servicing private hospital
networks.
Jago said he expected the business
would continue to focus on regional
centres where there was ample
opportunity for expansion and he did
not see acquisitions as important in that
growth. Lake’s recent acquisition of a
majority stake in West Australian business
Global Diagnostics Australia (GDA)
had already opened up a new front for
expansion.
GDA is a leading provider of diagnostic
imaging and tele-radiology services to the
Western Australia Country Health Service,
private medical facilities, public hospitals,
community centres and standalone clinics
in the state. Some of the private hospital
groups it services also have facilities in
Victoria.
Lake Imaging is Victoria’s largest
independent radiology group. The
business was founded in 2002 when it
acquired its first radiology practice in
Ballarat and it has since grown steadily
through acquisitions and opening new
practices.
South Coast Radiology is Queensland’s
largest independent radiology group.
The business has most of its practices
on the Gold coast but also has practices
in Queensland regional centres and in
northern NSW.

Group chief executive of Lake,
John Livingston, said radiologists
and management were pleased to be
partnering with Advent in the merger.
“They have deep experience in healthcare
and a solid reputation in partnering. We
remain unique in the healthcare sector with
radiologists continuing to hold the majority
of shares and having responsibility for all
local clinical matters,” he said.
Advent managing director Robert
Radcliffe-Smith said he expected the
acquisition to continue Advent’s highly
successful track record in investing in
healthcare. Primary Healthcare, Benchmark
Hospital Group and Cochlear had preceded
GenesisCare.
The Lake Imaging investment is the third
for the $200 million Advent 6 Fund which
closed in June 2013.
PERFORMANCE
Post escrow shares sale
returns $579m
Pacific Equity Partners has sold down
its stake in Veda (ASX: VED) to return
$579.317 million.
With escrow of its stake ending with
Veda issuing its 2014 financial year results,
PEP sold 269.45 million shares at $2.15 a
share on 28 August.
PEP retained about 265.068 million
shares representing a stake of 31.5 per cent.
As the holder of a 30 per cent or larger
stake, PEP retains the right to nominate
two directors to the board of Veda.
Veda’s results for the 2014 financial year
exceeded its November 2013 prospectus
forecasts with profit well above the
previous year.
Operating earnings before interest, tax,
depreciation and amortisation (EBITDA)
were up 21.7 per cent, from $105.5 to $128.4
on revenue up 12.4 per cent from $268.6
million to $302 million.
INVESTMENT ACTIVITY
Second bidder emerges for
wine company
Kohlberg Kravis Roberts (KKR) and Rhône
Capital’s joint $3.4 billion bid for Treasury
Wine Estates (ASX: TWE) is now facing
competition.

Treasury announced on 11 August that it
had received an additional bid and it has
since been rumoured since that a third bid
may be made.
Neither of these parties has been
identified but the bid reported by Treasury
is believed to have been made by TPG
Capital and the most likely other interested
party would be Carlyle Group.
The bid reported by Treasury matches
KKR’s offer for all the company’s shares at
$5.20 per share cash by way of a scheme of
arrangement.
Treasury said the bidder was “another
global private equity investor” which
had requested that its identity remain
confidential for a period of time.
Treasury reiterated that if a proposal
resulted after due diligence its board would
assess whether this offered better value
than management’s current turnaround
strategy (APE&VCJ, Aug 14).
The stockmarket was underwhelmed
by signs of an auction developing, with
investors no doubt noting that there was no
advance on price. After the announcement
of the second bid, Treasury shares briefly
hit a new high for the year of $5.26 before
slipping back to around the offer price and
then slipping further. The shares closed at
$5.11 on 29 August.
PERFORMANCE
Syndicate partially exits New
Zealand glass manufacturer
A syndicate led by Crescent Capital
partially exited New Zealand glass
manufacturer Metro Performance
Glass (NZX: MPG) in the company’s
$NZ244.2 million IPO and NZX float on
30 July.
The company also floated a secondary
stake on the ASX (ASX: MPP).
The syndicate, which also includes AIO
Finance (Ireland) Limited, JP Morgan
Special Opportunities, Portigon AG, Bain
Capital’s credit affiliate Sankay Capital
Advisors and Deutsche Bank AG, received
a return of about $NZ230 million from
the float in which they reduced their joint
holding to 18.5 per cent. Management
holds 3.8 per cent.
The Crescent syndicate and
management are to retain their shares
under voluntary escrow until Metro
announces its results for the half year to
the end of September 2015.
Metro shares were issued at $NZ1.70
and closed the first day up 3.5 per cent
at $NZ1.76 giving the company a market
capitalisation of $NZ326.5 million.
The ASX shares closed at $1.565 on 29
August.
Joint lead managers of the offer were
Forsyth Barr, Macquarie Securities NZ and
UBS New Zealand.
The Crescent-led consortium acquired
the company, then know as Metro
GlassTech, for $NZ181.5 million in a debt for
equity swap in early 2012 (APE&VCJ, Apr 12).
The business, which had been owned
by Catalyst Investment Managers and
Macquarie Investment Management, had
breached debt covenants and been taken
under control by creditors after being hit
by a 40 per cent decline in its sales of
glass for residential building construction.
Speaking after the float, Metro chief
executive Nigel Rigby, who was appointed
by Crescent, said the private equity and
debt investors had provided a capital
injection of $NZ40 million to stabilise the
company.
Metro produces more than two million
square metres of glass annually and has
about a 50 per cent share of the New
Zealand market. The company is currently
developing a $NZ21 million new production
facility in South Auckland.
PERFORMANCE
$150m raised in satellite
communications float
An IPO and ASX float of TA Associates
investee SpeedCast International has raised
$150 million.
Hong Kong-based SpeedCast is an
international satellite telecommunications
company with a strong Asia-Pacific region
focus.
A total of 76.5 million shares were issued
in the IPO at $1.96.
A total of 120.2 million shares were on
issue at the completion of the offer with TA
Associates retaining 29.5 million (24.6 per
cent) to remain the largest shareholder.
About $98 million of the raising
was to go to TA Associates and other
selling shareholders and to partly repay
SpeedCast’s debt.
SpeedCast was listed on the ASX on 12
August (ASX: SDA) with its shares closing
the day up 7.1 per cent at $2.10. This gave
the company a market capitalisation of
$252.42 million.
TA Associates plus management and
director shareholders, who jointly hold 11.7
per cent of the company, have entered
into voluntary escrow arrangements not to
dispose of their shares, apart from limited
exceptions, until after the release of the
company’s results for the six months to the
end of June 2015.
Boston-based TA Associates acquired
SpeedCast in September 2012. In December
that year it acquired a similar sized business
in Australia, Adelaide-based Australian
Satellite Communications which it merged
with SpeedCast. In January 2013, SpeedCast
acquired Netherlands-based Elektrikom
Satellite Services and later that year TA
Associates and SpeedCast jointly acquired
Sydney-based satellite communications
company Pactel International (APE&VCJ,
Jun 13).
SpeedCast generates 35 per cent of its
revenue from Australia and 50 per cent
from the Asia-Pacific region. More than 40
per cent of the staff are Australia based.
Chief executive Pierre-Jean Beylier
said SpeedCast expected to continue
making acquisitions in an industry ripe for
consolidation.
SpeedCast’s shares were trading around
$2 on 29 August.
INVESTMENT ACTIVITY
Turnaround firm in bus
builder restructure
Turnaround specialist private equity
firm Allegro Funds is part of a consortium
that has bought out of administration
the business and assets of bus-body
building company Custom Coaches
Pty Ltd.
The consortium is led by former owner
and managing director of Custom, Mark
Burgess, whose family established the
business in 1955.
New entity Custom Bus Australia Pty
Ltd will now continue building buses at
Villawood in western Sydney. A second
manufacturing facility at Royal Park,
Adelaide, was closed while Custom
Coaches was in administration.

Australia’s second largest bus-body
building company, Custom Coaches had
been placed in voluntary administration
under Deloitte at the end of May.
Following a sharp decline in new
orders, UK owners Alexander Dennis had
decided not to continue supporting the
business. Britain’s largest bus body builder,
Alexander Dennis had acquired Custom
Coaches from Burgess family interests only
in June 2012.
The business is currently at the end
of a contract to build buses for the NSW
State Transit Authority and also has a
contract to supply buses to the South
Australia departments of transport and
education.
Custom Coaches built more than 220
buses in 2013 accounting for about 15 per
cent of the Australian market.
The sale of the business has saved
about 120 jobs but this represents a
substantial scaling back from around 300
employees before Custom Coaches went
into administration. Around 100 jobs have
been lost in Sydney and around 60 in
Adelaide.
A small number of Adelaide employees
have been retained with the new owners
planning to establish a customer after-care
facility at a new site in South Australia.
Burgess said: “This is a great step
forward for Custom which transitions to a
new and stable Australian ownership with
no debt, strong cash reserves and a highly
experienced management team backed
by institutional investors. We look forward
to a bright future with our customers,
suppliers and staff.”
Allegro founding partner Adrian Loader
has been appointed chairman of Custom
Bus Australia.
“We see tremendous potential in Custom
and we are pleased that we were able to
transact quickly in a distressed situation to
ensure this business can continue building
the best buses in Australia,” he said.
Loader said the business was now debt
free and had the benefit of stable financial
backing and focused management.
He said Custom Bus would focus on its
key market, building high quality 25-year
lifespan city buses. The company had been
promised support in this from suppliers
and customers.
Allegro’s investment thesis was based on
expected growing demand for city buses
as more public transport was provided
plus legislation requiring larger numbers of
buses to be provided with disability access
and for rural school buses to be made
safer with seat belts fitted.
Loader said the bus market in Australia
was split between purpose built 25-year
lifespan vehicles specified in government
contracts and much cheaper coach-style
vehicles which had life spans of about
seven-and-a-half years. These vehicles,
many of which were fully imported, were
unsuitable for city bus routes as their
passenger compartments were above
luggage storage areas and could only be
accessed via steps.
Australia’s largest bus body builder is
Dandenong-based Volgren which also has
Intelligence on companies, deals and
multiples for private equity professionals
• Detailed financials for millions of private and public
companies worldwide
• The most comprehensive deal database
• Original documents and filings
• Deal source documents
• Unrivalled corporate structures and ownership data
• Trading multiples for listed companies
• Stock data, earnings estimates and detailed forecasts
• Reliable transaction multiples - pre and post deal
• Private equity intelligence and portfolio searching
• Bespoke comparable templates using our Excel Add-In
• Integral analysis tools including volume and value tables
Company information around the globe
Comprehensive M&A deals and rumours
bvdinfo.com
sydney@bvdinfo.com
02 92 233 088

construction facilities in Queensland and
Western Australia. Volgren was acquired
by Brazilian bus builder Marcopolo in
December 2011.
NEWS
$US100bn fund to allocate
up to 15 per cent to private
equity
Singapore’s $US100 billion plus sovereign
wealth fund GIC is now targeting an
allocation of 11-15 per cent to private equity.
Actual exposure to private equity
increased from 8 per cent at the end of the
2013 financial year to 9 per cent at the end
of the 2014 financial year.
Releasing the fund’s annual report
for the year to March 2014, group chief
investment officer Lim Chow Kiat said:
“These are challenging times for all
investors including GIC. Asset yields are
low and all major asset classes are facing
potentially low future returns. We continue
to strive for a steady long term real rate of
return by focusing on price discipline as
our investment teams originate, structure
and pursue investment opportunities
across asset classes and across the capital
structure.”
He said GIC had implemented a new
investment framework in April 2013 which
allocates capital to assets and investment
strategies based on opportunity cost.
Clearly, the potential returns from private
equity and venture capital are seen as
worth the higher management costs.
According to the annual report,
GIC achieved a real annualised rate of
return of 4.1 per cent per year in the
20 years to 31 March 2014. That translates
to 6.5 per cent in US dollar nominal terms.
Also in US dollar nominal terms, GIC
achieved annualised returns of 7 per cent
over 10 years and 12.4 per cent over
five years.
PERFORMANCE
Lower mid-market firm exits
New Zealand bus operator
Next Capital has exited its investment in
New Zealand bus operator Go Bus with the
sale of the business to the country’s two
largest Maori investment trusts.
Ngai Tahu Holdings Corporation and
Tainui Group Holdings announced on 12
August that they had acquired Go Bus.
Ngai Tahu will hold two thirds of the
business and Tainui the remaining third.
No value for the transaction was released
but S&P Capital IQ reported the sale price
as $NZ170 million.
Loan funding for the deal has been
provided by Westpac.
Hamilton-based Go Bus is one of New
Zealand’s largest bus operators with
operations from Auckland to Invercargill.
Ngai Tahu Holdings chief executive
Mike Sang said: “Go Bus is the type
of investment we seek – it’s a well-run
business in a sector we are comfortable
with and is led by an excellent team.
Go Bus will enable us to further grow
and diversify our portfolio in a way that
is complementary to the rest of our
investments.”
Tainui chief executive Mike Pohio said
Go Bus offered his trust investment
diversification and growth potential.
Reuters quoted Pohio as saying: “We
look for businesses that are well run,
have an ability to grow and have strong
underpinnings.”
Go Bus chief executive Calum Haslop
said the company welcomed the two
investment trusts as sophisticated long-term
investors.
In February Ngai Tahu and Tainui Group
invested alongside Auckland-based private
equity firm Pioneer Capital in its acquisition
of a majority stake in Waikato Milking
Systems Ltd. Waikato is the country’s
leading dairy equipment maker.
The two investment trusts were also
recently part of an unsuccessful bid for the
New Zealand waste management business
of Transpacific Industries (ASX: TPI) which
was sold to Beijing Capital Group.
Ngai Tahu and Tainui, which respectively
represent South Island and North Island
tribes, have worked together under a co-investment
agreement since 2007. They
invest funds flowing from hundreds of
millions of dollar in cash and land titles
granted by the New Zealand Government
in the 1990s to settle historic land
grievances. Together they now have funds
under management of more than $NZ2
billion.
Pohio said: “We’re looking for partners
to further our growth and private equity is
an avenue, although they have a tendency
to a short-term approach and that doesn’t
necessarily align with us and our longer-term
horizon.”
Sydney-based lower mid-market private
equity firm Next Capital invested in Go Bus
in mid-2012 (APE&VCJ, Jun 12), buying out
the stake of New Zealand private equity
firm Direct Capital. No financial details of
that transaction were revealed although
Direct Capital said at the time that it had
sold at a profit.
New Zealand-Taiwan fund
achieves $NZ88m first close
The first venture capital fund sponsored
by the New Zealand Venture Investment
Fund (NZVIF) and its Taiwan counterpart
the Taiwan National Development Fund has
reached a $NZ88 million first close.
Taiwan-based GRC Managers is targeting
a final close of $NZ118 million ($US100
million) for the GRC SinoGreen Fund III.
NZVIF has committed $NZ26.6 million.
The fund is to be managed by a team of
experienced venture capitalists including
Tony Bishop and colleagues at the former
Pan Pacific Capital, now the Auckland
branch of GRC Managers.
NZVIF chief executive Franceska Banga
said, with the first close now achieved,
GRC Managers was able to start assessing
investment opportunities.
“The terms of NZVIF’s commitment
means that at least $US35 million will be
invested into New Zealand originating
technology companies,” she said. “Tony
Bishop and two others will be based in
Auckland and looking at opportunities.
“If the fund reaches its $US100 million
target it will be one of the larger venture
capital funds supported by NZVIF. That
gives it the capacity to make the larger
investments which are needed for growing
companies looking at offshore expansion.
“With its solid interest in New Zealand
originating companies, this will be an
important fund for the growth stage
investment sector. GRC Managers has
strong networks and access in the
technology sectors including a direct
relationship with the Industrial Technology
Research Institute in Hsinchu, which has
played a major role in the development

NOMINATIONS ARE OPEN
FOR the Australian Growth
Company Awards 2014
SPONSORED BY:
The Awards are focused on celebrating excellence
in companies that demonstrate high rates of growth,
innovation, integrity and sustainability.
Award categories are:
• Growth Company of the Year
• Growth Company CEO of the Year
• Exit of the Year
• Growth company to watch.
Nominations close on the 15th September 2014.
The award winnders will be announced on
16 October 2014.
Find out more at: www.sparke.com.au/growthawards
We thank each of the award partners for their
support in bringing these awards to life.

of Taiwan’s hi-tech sector, and research
facilities in China.
“GRC Managers have been interested
in New Zealand for some time and last
year joined a delegation of venture capital
funds who visited New Zealand to meet
fund managers and entrepreneurs on a
trip organised by NZVIF and New Zealand
Trade and Enterprise.
“From a New Zealand perspective, one
of the chief benefits of the partnership
NZVIF has with Taiwan’s National
Development Fund is that it opens access
to new networks and markets for fund
managers and the high growth companies
they invest in. We hope to see more
partnership-style funds emerge over the
next few years.”
Bishop said: “Our investment targets are
technology-centric private companies with
unique strengths and substantial growth
opportunities, including New Zealand
originated technology companies which
will benefit from the growing markets in
China. We have a number of investments
under consideration and there is a strong
pipeline of companies.
“The fund’s investment target sectors
span energy and resource efficiency,
energy storage, agriculture technologies,
medical devices, data analytics and cloud
computing, new materials and other
technologies for climate change mitigation
and adaption.
“With GRC Managers’ experienced
team based in Auckland, Taipei and
Beijing, the fund is well positioned to
invest into companies with technologies
originated from New Zealand and then
foster their growth in China with technical
collaboration from Taiwan.”
The $NZ260 million Venture Investment
Fund was established by the New Zealand
government in 2003 to promote venture
capital investment through co-investment
with private investors.
NZVIF has invested alongside nine
venture capital funds and invested in more
than 60 companies.
INVESTMENT ACTIVITY
Local venture firm leads
$US6m funding round in Israel
Melbourne venture firm Square Peg Capital
has led a $US6 million Series A capital
round for Israeli online technology business
Feedvisor.
Tel Aviv-based Feedvisor has developed
an algorithmic pricing and business
intelligence platform for online retailers.
The announcement of the new funding
came just under a year after the company
announced a $US1.7 million seed round in
which Israeli investors JAL Ventures, Oryzn
Capital and Micro Angel Fund participated.
All of these investors also committed to
the new round.
According to techcrunch.com, in its
current form Feedvisor focuses on retailers
who use Amazon’s e-commerce platform
but the company’s technology is suitable
for use on other platforms. Feedvisor
helps a retailer keep its prices competitive
by using self-learning algorithms to
autonomously review competitors’ prices,
product demand and price elasticity to
determine best pricing according to pre-set
business objectives.
Feedvisor claims its platform currently
manages over $US1 billion in inventory for
its customers.
PERFORMANCE
Private equity outperforms
listed equities over latest
year
Australian private equity and venture
capital outperformed the listed market
by over 10 per cent in the 12 months to
the end of March, according to data from
industry association AVCAL and research
organisation Cambridge Associates.
The Cambridge Associates LLC Australia
Private Equity and Venture Capital Index
(CA Australia PE&VC Index) posted a gain
Cambridge Associates LLC Australia/AVCAL Index Returns for the period ending 31 March 2014
Index (A$) 1-Quarter 1-Year 3-Year 5-Year 10-Year 15-Year
Cambridge Associates LLC Australia Private
Equity & Venture Capital Index (A$)1 3.29 23.09 12.27 11.82 10.61 11.69
S&P/ASX 300 Index 1.99 12.97 8.05 13.20 9.21 8.70
S&P/ASX 300 Index mPME2 N/A 12.92 8.35 12.68 6.66 6.72
Value-Add (bps)3 N/A 1,017 393 -86 395 497
The Cambridge Associates LLC indices are an end-to-end calculation based on data compiled from 60 Australia private equity and 25 Australia venture
capital funds, including fully liquidated partnerships, formed between 1997 and 2013.
1 Pooled end-to-end return, net of fees, expenses, and carried interest.
2 mPME = Modified Public Market Equivalent
3 Value-Add (bps) is calculated as the difference between the CA Index return and the S&P/ASX 300 Index mPME return.
Sources: Cambridge Associates LLC, Bloomberg L.P., Standard & Poor's, Thomson Reuters Datastream, UBS AG and UBS Global Asset Management.
For media inquiries:
Cambridge Associates:
Frank Lentini
Sommerfield Communications
AVCAL:
Gabriel McDowell
Res Publica
of 23 per cent compared to the S&P/ASX
300 Index which returned just under 13 per
cent gain over the same period.
The CA Australia PE&VC Index showed
the sector’s continuing outperformance
by gaining almost 3.3 per cent in the first
quarter of 2014, after recording a very
positive final quarter of 2013 (APE&VCJ,
June 2014). The three year, 10 year, and 15
year time horizons also showed stronger
returns than listed equities.
But over a five year time horizon the
S&P/ASX 300 Index was ahead by 1.38
per cent, with a gain of 13.20 per cent
compared with the CA Australia PE&VC
Index gain of 11.82 per cent. This reflected
the much faster recovery of listed equities
after the global financial crisis. The 1.32
per cent margin was however well down
on the 2.12 lead that the listed equities
index held for the same time period to the
end of December 2013 suggesting that
this should prove a relatively short lived
reverse against the superiority of private
equity returns over longer periods.
AVCAL chief executive Yasser El-Ansary
said it was encouraging to see such strong
performance from private equity over
a one-year period but he stressed the
importance of longer-term results.
“One of the most important
observations from this latest data is
that when you look at long-term returns
– which are reported net of fees and
costs – across the industry you see very
compelling evidence of why this asset
class should be a feature of all diversified
portfolios for institutional investors,”
he said.
“Our asset class has a long track record
of generating above-normal returns for
super funds and other investors over

many years. The returns are a direct
reflection of the work done by fund
managers in partnering with their portfolio
companies, and driving a clear growth
strategy which expands businesses
and boosts economic and employment
opportunities.”
Cambridge Associates Sydney office
managing director Eugene Snyman
said: “The strong returns experienced in
Australia rewarded investors who stayed
allocated and invested in the asset class.
In particular, many institutional investors
who followed a disciplined manager
selection and implementation strategy
achieved a net of fees return in excess of
500 basis points above listed markets over
the long term.”
NEW FUNDS AND FUNDRAISING
Global manager offers
discounts on management
fees
Global manager TPG Capital is offering
potential investors substantial discounts
on management fees as it tries to raise a
$US10 billion new buyout fund, according
to Bloomberg News.
Investors that commit to TPG Partners
VII could get as much as 25 per cent
reduction on fees depending on the
amount committed and whether they
participate in the first round of capital
raising, according to a document obtained
by Bloomberg.
AUSTRALIAN PRIVATE
EQUITY HANDBOOK
Order your professional
practise guide
TPG, which controls more than $US59
billion in buyout, credit and real estate
assets, is offering the incentives in the
wake of disappointing returns from deals
made in the buyout boom which then
had to weather the effects of the global
financial crisis. The results cast a shadow
over more than two decades of investment
success for the major US-based funds
manager.
The discount offer follows similar offers
in recent fundraisings by rivals including
Apollo Global Management, Carlyle Group,
Kohlberg Kravis Roberts (KKR) and
Warburg Pincus.
TPG spokesperson Owen Blicksilver
declined to comment on the fundraising
or fee structure.
The first professional practise guide specifically for the Australian
private equity industry is now available directly from Private Equity Media.
Order Australian Private Equity Handbook by Nick Humphrey
(CCH Australia Limited RRP $95.00 inc. GST) now.
Simply visit: www.privateequitymedia.com.au and click on “Subscribe” in the green toolbar to buy online.
Australian Private Equity & Venture Capital Journal subscribers qualify for a special discount price of
$85.00 inc. GST.
We will mail your hard copy book as soon as your payment is processed.
Australian Private Equity Handbook is a plain English guide to professional private equity practise in
Australia covering major aspects of deal making and the establishment of a private equity fund.

Bloomberg says that to entice large
commitments TPG is offering 5, 10 and 15
per cent discounts on commitments of
at least $US100 million, $US250 million
and $US400 million respectively. The
document says the firm will give an extra
10 per cent discount to investors that
commit to the first round of capital raising.
This means an investor could be charged
around 1.1 per cent annually on committed
capital rather than the standard large fund
rate of 1.5 per cent.
The document says TPG will take a
standard 20 per cent carried interest on
net profit.
INVESTEE NEWS
Poultry business
rationalisation underway
TPG Capital investee Inghams Enterprises
has reached agreement to sell and lease
back seven properties in New Zealand in a
deal that will return $NZ57 million.
The buyer of the properties is Wellington
real estate and private equity investment
and advisory firm Caniwi Capital.
Other properties owned by the poultry
business in Australia and New Zealand are
under negotiation for sale and lease back.
TPG put a portfolio of 53 Inghams
properties, valued at more than $600
million, on sale in March. The global private
equity firm had originally hoped to sell
the properties in two large portfolios,
one comprising processing plants,
feed mills and hatcheries and the other
breeder farms.
The Inghams business is to be further
rationalised with a processing facility at
McLaren Flat south of Adelaide scheduled
to be closed in December. Processing is
to be shifted to more efficient facilities
in NSW.
TPG paid $880 million for western
Sydney-based Inghams in 2013 (APE&VCJ,
Mar 13).
INVESTMENT ACTIVTY
Global firm to make first real
estate investment in Australia
Leading global private equity firm
Kohlberg Kravis Roberts (KKR) is to make
its first real estate investment in Australia.
KKR and Abacus Property Group
(ASX: ABP) are to pay $120.4 million
for a 70 per cent interest in Towers 2, 3
and 4 of the World Trade Centre (WTC)
commercial development at Northbank,
Melbourne.
The vendor, Asset 1WTC, will retain 30
per cent.
The investment is to provide an initial
annual yield of 9.3 per cent.
Northbank is a commercial, retail and
residential precinct on the Yarra River
close to the central business district.
The WTC complex was developed
in 1983 and is made up of four
interconnected buildings. Towers 2, 3 and
4 provide a total nearly 50,000sqm of
net leasable area split into 33,500sqm of
office space, 4,600sqm of retail space,
including restaurants and bars fronting
the Yarra River, an 1800sqm childcare
facility and a 310-bay commercial car park.
Towers 2, 3 and 4 are 90 per cent
occupied with over half of the office space
let to the Victorian state government.
KKR is to fund 75 per cent of the equity
component of the investment and Abacus
25 per cent. Abacus will provide property,
asset and development management
services to the WTC.
KKR Asia Real Estate director Bryan
Southgill said the firm was very pleased
to expand its real estate business to the
Australian market. KKR already has Asian
region real estate investments in China,
India and South Korea.
The transaction is subject to FIRB
approval and finalisation of a senior debt
finance facility.
INVESTMENT ACTIVITY
Data centre monitoring
technology business
raises $8.7m
Melbourne venture firm Square Peg
Capital has invested in a Series A funding
round for data centre monitoring
technology business ScriptRock.
The $8.7 million round was led by US
venture firm August Capital. Another
US venture firm, Valar Ventures, and US
angel investor Scott Petry also invested in
the round.
Founded in Sydney and now based in
California, in 2012 ScriptRock attracted $1.2
million in a seed capital round led by Peter
Thiel’s Valar Ventures.
Other seed investors included Starfish
Ventures, US early stage investor 500
Startups and US and Australian angel
investors Scott Petry, Mark Jung, Bruce
Graham, Paul Bassat (prior to founding
Square Peg Capital), Matt Dickinson, Alan
Jones, Anthony Marcar and Larry Marshall.
Joint chief executives of ScriptRock,
Mike Baukes and Alan Sharp-Paul, plus a
third co-founder, developed the business
through the 2012 Startmate incubator
programme.
Startmate last month (August) opened
applications for its next intake.
INVESTMENT ACTIVITY
Growth fund takes stake in
beauty treatments business
Archer Capital has made a growth
investment in LaserClinics Australia (LCA).
LCA operates a chain of cosmetic
treatment clinics specialising in injecting
botox and fillers as well as laser treatment
to remove unwanted hair and skin
blemishes.
Founded in 2008, LCA says its annual
revenue has grown from $20 million
in 2012 to almost $100 million. The
company currently operates 34 clinics
and expects to increase that number to
about 40 over the next two years. Growth
of the company has been fuelled by
commoditisation of non surgical beauty
treatments.
The business uses a semi-franchised
business model with ownership of
individual clinics shared equally between
LCA and franchisees.
LCA was founded by Babak Moini and
Alistair Champion and operations are now
directed day to day by general manager
Ian Houlton.
Archer has made an unspecified
investment in LCA from its Growth Fund 2.
The fund makes substantial investments
in businesses with enterprise values in the
range $20 million to $100 million.
In January, Archer Growth invested
in GoGet, Australia’s largest car sharing
business.
GoGet manages a fleet of vehicles
available to subscribers to its service
from dedicated on and off-street parking

locations throughout Sydney, Melbourne,
Brisbane and Adelaide.
GoGet is also the owner of Fleetcutter,
a business that develops and operates
telemetric hardware and software to
manage vehicle fleets.
PERFORMANCE
Listed manager doubles
assets under management
Listed funds manager Blue Sky Alternative
Investments (ASX: BLA) has doubled its
assets under management over 12 months.
Over the year to 30 June 2014, Blue Sky
increased its assets under management
from about $340 million to more than
$700 million.
Announcing its full year results on 26
August, the company said the growth
in assets under management reflected
strong deal flow activity, increased
demand from private investors plus further
engagement with institutional investors
and family offices.
An important milestone was reached
at the end of the financial year with the
successful launch of the listed Blue Sky
Alternatives Access Fund (ASX: BAF)
in June. The fund raised more than $60
million to be deployed across Blue Sky’s
range of alternative asset strategies.
Blue Sky reported an underlying net
profit after tax of $6.24 million (up 60
per cent from the $3.89 million reported
for the 2013 financial year) on revenue of
$24 million (up 69 per cent from the $14.2
million reported for 2013).
The company is to pay a fully franked
dividend of seven cents per share.
In its report, Blue Sky said its growth
could in part be attributed to the
“mainstreaming” of alternative assets as an
investment choice.
The company said it anticipated that its
listed fund would play an important role in
drawing alternatives investment from the
self-managed super, private wealth, retail
and wholesale client investment segments.
Blue Sky founder and managing director
Mark Sowerby said he expected the
current year to show further progress for
the company.
“We have worked hard to deliver
strong investor returns in our underlying
funds over a significant period of time
and this persistence is being rewarded
with increased investor engagement and
quality deal flow,” he said.
Sowerby said expansion from the firm’s
Brisbane base into Sydney and Melbourne
as well as substantial investment in its
team provided a platform to broaden
investment and investor horizons.
“We remain committed to our vision
to build Australia’s leading diversified
alternative asset manager,” he said.
Blue Sky was established in 2006 and
was listed on the ASX in January 2012.
The company is Australia’s only listed fund
manager investing across a diversified
range of alternative assets. Blue Sky’s
portfolios include private equity and
venture capital, real estate, infrastructure,
hedge funds, water entitlements and
agribusiness.
PEOPLE MOVES
Global buyout firm recruits
locally for Indonesia push
Kohlberg Kravis Roberts (KKR) has
recruited an Indonesian educated
executive to lead the firm’s activities in the
country.
Jaka Prasetya, founder and former
managing partner of Leafgreen Capital
Partners, has been appointed a managing
director and will work with KKR’s private
equity, credit and special situations teams.
In addition to his Indonesia responsibilities,
Prasetya will lead KKR’s credit business
throughout South-East-Asia.
Two other former Leafgreen partners,
Rahul Bhargava and Allan So, have
also joined KKR. All three are based in
Singapore.
Prasetya launched Leafgreen in 2011 to
finance mid-cap companies in Indonesia,
Malaysia and Singapore. He is a graduate
of electrical engineering from the Institut
Teknologi, Bandung, West Java.
Bahargava has an MBA from
the Australian Graduate School of
Management.
KKR Asia private equity co-head Ming Lu
said: “Indonesia continues to be a dynamic
market for investment with great growth
potential and positive demographics
driving opportunities. With our first deal in
the market in 2013 (KKR acquired a 9.5 per
cent stake in PT Tiga Pilar Sejahtera Food
Tbk), we look forward to exploring new
opportunities to provide both equity and
credit solutions to companies to suit their
long term needs.”
Lu said the new team members’
understanding of the culture and business
environment in Indonesia would greatly
enhance KKR’s ability to partner with local
companies.
KKR closed its second Asia fund at $6
billion in 2013, the largest fund ever raised
for investment in the region.
INVESTMENT ACTIVITY
Corporate venturer invests
in data collection business
Corporate venture operation Reed Elsevier
Ventures has led a $6 million Series C
capital raising by Yuuwa Capital investee
Agworld.
The Perth-based venture capital firm
also participated in the round.
Agworld says its technology enables
agricultural industry users to efficiently
collect data in the field using digital pen
devices linked to mobile phones. The
mobile phones transmit the data to cloud-hosted
records and reference data.
The West Australian-based firm said
the new funding will enable it to achieve
key goals of US market expansion and an
expansion of its product offering.
The company claims to be the leading
provider of information management and
technology in its core agricultural industry
markets.
INVESTMENT ACTIVITY
$1m funding for development
of new products
Starfish Ventures, Tank Stream Ventures
and US technology accelerator 500
Startups have provided website
development bug tracking business
BugHerd with an additional $1 million in
Series A funding.
The new funding, most of which has
been provided by the two Australian
venture capital firms, is to be used to assist
BugHerd with product expansion.
Melbourne-based BugHerd is splitting
its eponymous product into three separate
products to serve more specialised needs.

The company is to recruit more staff to
help with developing the new products.
INVESTEE NEWS
Plant virus protection
attracts global agri-business
Venture-backed Nexgen Plants Pty Ltd has
entered into a collaborative arrangement
with global agri-business Syngenta (NYSE:
SYT, SIX: SYNN).
The arrangement is to be used develop
resistance to three key viruses in major
crops.
Nexgen Plants is commercialising a
cutting edge virus resistance technology
developed by University of Queensland
researchers led by Professor Peer Schenk.
Nexgen Plants was formed in August
2013 on the back of closing a $2 million
Series A round from Yuuwa Capital,
Uniseed and UniQuest (APE&VCJ, Oct
13). The company is implementing an
extensive programme to demonstrate
its virus resistance technology across a
broad range of crop and virus types and is
progressively engaging with leading plant
biotech companies around the world.
Perth-based venture firm Yuuwa
Capital invests in early stage companies
principally in the areas of life sciences
and ICT. Uniseed is a venture fund
manager operating at the universities
of Melbourne, Queensland and NSW.
Uniseed’s investment capital is provided
by the universities and superannuation
fund AustraliaSuper. UniQuest is the
main commercialisation company of the
University of Queensland.
Nexgen Plants’ technology is based
on the identification of a new class of
small plant virus RNA molecules (miRNA)
which are involved in modulating a
plant’s defence response to virus attack.
The company says discovery and the
development of associated propagation
methods enable the introduction of virus
resistant traits into major crops. This
offers farmers the potential for improved
yields and plant breeding companies
a unique competitive advantage for
boosting seed and/or plant productivity
and sales.
Nextgen Plants chief executive Brian
Ruddle said: “Crop losses from viral
infections are a multi-billion dollar global
problem. The Nexgen Plants technology
provides plant breeding companies with
a range of virus resistance strategies
covering transgenic, cisgenic and marker-assisted
approaches.”
Professor Schenk explained: “The
Nexgen technology can confer virus
resistance into existing commercial
varieties or in parent lines as part of
hybrid seed production. Plant viruses
would have to develop an extremely
unlikely mutation for the resistance to be
broken.”
Head of external collaborations at
Switzerland-based Syngenta, Moshe Bar,
said the company had been attracted
to the Nexgen technology because of
its compelling commercially focused
science and the potential for it to be used
to dramatically improve virus resistance
characteristics across breeding programs.
Asian region fund
approaching target
Kuala Lumpur-based private equity firm
Navis Capital has reached $US1.4 billion for
its Fund VII and is anticipating a December
close at the hard cap of $US1.5 billion, Alt
Assets website has reported.
In February the fundraising had been
reported to have reached $US1.3 billion.
Navis has made at least eleven principal
investments in Australia and numerous
follow-on acquisitions.
The latest Australian acquisition was
Guardian Early Learning Group which was
acquired from Wolseley Private Equity for
around $120 million last year (APE&VCJ,
Sept 13).
Navis established a Sydney office in
2006.
Listed alternatives fund
makes large allocation
to water
Blue Sky Alternative Investments (ASX:
BLA) has allocated to its water fund a
quarter of the $60 million raised on the
ASX with the float of its listed investment
company Blue Sky Alternatives Access
Fund (ASX: BAF).
Nearly 70 per cent of the raising has
been allocated so far. In addition to water,
the capital has been allocated across
Blue Sky’s private equity, venture capital,
agriculture, hedge fund and private real
estate strategies.
Chief investment officer Alexander
McNab said the large allocation to the Blue
Sky Water Fund was “based on our long
held conviction that structural drivers in
the marketplace will increase demand for
water as a scarce commodity”.
“Water has a low correlation to listed
equities and, alongside our hedge fund, it
is the most liquid asset in the portfolio,” he
added.
The water fund invests in water
entitlements and returned 15.58 per cent
for the 2014 financial year.
Nearly 13 per cent has been invested
in the Blue Sky Investment Science IS
16Q hedge fund, which has returned 15.02
per cent per annum since inception in
2007.
“This provides a good balance with the
private equity, venture capital and private
real estate investments, which traditionally
see higher returns but have low liquidity
and a higher degree of correlation to the
business cycle,” McNab said.
Close to a third (31 per cent) of the listed
investment company’s capital is yet to be
allocated.
McNab said this capital was being
retained for investment opportunities
as they arose. These were likely to be in
private equity or real estate so would
increase the allocations to those asset
classes.
He said investor appetite for alternative
investments was growing globally and the
Blue Sky Alternatives Access Fund gave
financial planning, private wealth, self-managed
super fund and retail investors
the ability to invest in alternatives through
an ASX-listed structure which made these
investments more accessible and more
liquid than through conventional unlisted
funds.
Blue Sky Alternatives Access Fund’s
allocations will provide:
• $15 million for the Blue Sky Water Fund
to invest in a diversified portfolio of
agricultural water entitlements.
• $7.5 million for Blue Sky Investment
Science’s IS 16Q quantitatively-driven
hedge fund to invest in highly-liquid

equity, commodity, fixed income and
currency markets.
• $4.4 million for the new Blue Sky
Agriculture Fund to invest in farmland
and ground water.
• $4 million for private equity investee
Foundation Early Learning to use to
fund acquisition of 15 childcare centres.
• $4 million for Blue Sky Venture
Capital’s VC2014 fund, for which
fundraising was launched in July with
a target of $30 million.
• $2 million to private equity investee
Wild Breads to help fund growth
for the artisan and specialty bread
manufacturer.
• $2 million across two of Blue Sky
Private Real Estate’s residential
developments in up-and-coming inner-city
Brisbane suburbs.
INVESTMENT ACTIVITY
Healthcare company in
$3.6m capital raising
Venture capital-backed healthcare
company Fitgenes Limited (ASX: FIT) has
launched a prospectus to raise up to $3.6
million.
The company – formerly ATW Holdings
Limited – is to seek re-listing on the ASX.
A total of 12 million shares, representing
28.6 per cent of the company, are to be
issued at 30 cents a share. The minimum
investment parcel size is $2,000.
Perth venture capital firm Yuuwa Capital
took up a $1 million converting note as part
of the company’s mezzanine capital raising
round.
Brisbane-based Fitgenes announced on
26 June that Yuuwa Capital’s investment
had brought total subscription for the
mezzanine round to $1.6 million.
In a revised prospectus issued on 1
August, Fitgenes says that over the last
five years it had developed a robust and
highly scalable technology platform
which hosts and delivers what it believes
is one of the most advanced evidence
and genomics-based healthcare and
wellness programmes. The company says
it has built a strong brand, commercially
validated its services and products and
established a certified practitioner network
across Australia, New Zealand, Singapore,
Malaysia, Hong Kong and the US.
Chairman of Fitgenes is Dr Carrie
Hillyard. Liddy McCall of Yuuwa Capital is
to become a director of the company once
it completes re-compliance.
The offer closes on 30 September.
INFORMAL VENTURE CAPITAL
Jet pack raising reaches
$NZ3m
No 8 Ventures investee Martin Aircraft
Company has raised $NZ3 million of a
planned $NZ5 million pre-IPO round.
The round is attracting strong investor
interest and forty people attended an
investor briefing session in Sydney last
month (August).
At the briefing, Martin chief executive
Peter Coker said the company expected to
launch commercial production and sales
next year.
The Martin aircraft is claimed to be the
world’s first practical jet pack.
The aircraft is powered by a 200hp V4
two-stroke petrol Mercury engine. Key
original technology is in the fans and
ducting which provide lift. This technology
is covered by a number of patents.
The one-man or remote control aircraft
is expected to retail at around $200,000
which would make it 60-70 per cent
cheaper than the least expensive helicopter
and unlike a helicopter it can be operated
in very restricted spaces. Marketing will
initially be targeted at government sectors
such as fire services, search and rescue,
disaster recovery and border security.
Wellington-based No 8 Ventures,
which is now in run-down mode, is the
largest shareholder in Christchurch-based
Martin and has been an investor since
2004. Glenn Martin, who spent 30 years
developing the technology, is also a major
shareholder.
The pre-IPO capital raising is being
managed by Sydney firm Axstra Capital.
PEOPLE MOVES
Placement agent head swaps
London for Hong Kong
Mounir Guen, founder and chief executive
of placement agent and advisory firm
MVision has relocated from London to
Hong Kong.
The move will help Guen lead expansion
of MVision’s business in the Asia Pacific
region.
Guen said: “We are seeing an extremely
broad spectrum of activity here. Asia
is currently the world’s most dynamic
economic region and there are few
limitations on opportunities for private
equity. My move to Hong Kong is a
key part of the firm’s continuing global
expansion and our presence here will not
only enhance our existing relationships in
the region but allow us to take advantage
of new opportunities as well.
“Progress of local managers with the
ability to raise large funds, the evolution
of regional institutions as prominent
investors in private markets and also the
heightened demand from international
limited partners to gain better access
to Asian opportunities are the three
fundamentals trends informing this
decision.”
MVision is to remain centrally managed
from its London headquarters.
The firm is also planning to strengthen
its international office network which
currently includes New York, Hong Kong
and Sydney where MVision is represented
by managing director Nikki Brown who
has been with the firm since 2001.
NEWS
City may offer share in
$NZ2bn commercial assets
The council of New Zealand’s second
largest city, Christchurch, may invite
a strategic partner to take a stake in
its commercial and investment arm.
Alternatively, the council may offer stakes
to a number of investors.
Christchurch newspaper The Press has
reported mayor Lianne Dalziel as saying
that offering a strategic partnership
in Christchurch City Holdings (CCHL)
is an option the city might take in its
revitalisation efforts following the 2010 and
2011 earthquakes.
Maori investment fund manager Ngai
Tahu is seen as one likely investment
partner.
Established in 1993, CCHL holds majority
stakes in businesses including regional
electricity distribution company Orion New
Zealand, Christchurch International Airport,

Lyttleton Port, Red Bus and broadband
network company Enable Services.
CCHL’s assets are valued at well over
$NZ2 billion.
PERFORMANCE
Life sciences venture firm
exits US investment
South Australian life sciences venture
capital firm Terra Rossa Capital has
exited an investment in Reverse Medical
Corporation as a result of the the Irvine,
California, company being acquired by
Covidien plc (NYSE: COV).
Other sellers, according to S&P Capital
IQ, included BioStar Ventures, Early Stage
Partners, Emergent Medical Partners, NBGI
Ventures and yet2Ventures.
Financial details of the acquisition have
not been disclosed.
Reverse Medical is developing catheter-based
prophylactic devices. These include
devices to be used during surgery to
capture blood clots that might cause
a stroke and devices to remove clots
trapped in blood vessels in the brain as a
result of a stroke.
Reverse Medical is to become part of
the neurovascular product line section in
Covidien’s medical devices segment.
Adelaide-based Terra Rossa was
established in 2006 and manages
the South Australian Life Sciences
Advancement Fund. The fund is supported
by one limited partner, MTAA Super.
Ireland-based Covidien is a $US10 billion
annual revenue company.
PERFORMANCE
Range of alternatives return
14.8 per cent over eight years
Blue Sky Alternative Investments (ASX:
BLA) has reported a lift in the overall
performance of its funds driven primarily
by private equity, venture capital and water
entitlements.
From inception in July 2006 to the end
of June this year the funds have generated
equity weighted internal rate of return
(IRR) of 14.8 per cent net of fees. This
represents 0.9 per cent improvement
over the 13.9 per cent performance figure
reported in May.
The company said private equity and
venture capital returns had increased as
investments matured and approached
exit and the Blue Sky Water Fund had
performed strongly returning 15.6 per cent
(net of fees) to investors over the 2014
financial year.
Private real estate and hedge fund
investments produced marginally lower
returns.

Blue Sky committed to providing
further portfolio updates every six
months following half yearly reviews of its
investment portfolio.
NEWS
‘Company to watch’ acquired
for $80m
Organic yoghurt producer Five: Am
– which was nominated as “Growth
Company to watch” in last year’s Australian
Growth Company Awards –has been
acquired by UK-based PZ Cussons plc
(LSE: PZC) for $80 million.
The vendor was David Prior who
founded Five: Am three years ago.
In 2013 Anacacia Capital (APE&VCJ, Jul
13) exited baby food company Rafferty’s
Garden with a $70.05 million sale to
Cussons.
Nominations for this year’s Growth
Company awards close on 15 September.
For more information visit: www.sparke.
com.au/growthawards
INVESTEE NEWS
US media executives mentor
Sydney start-up staff
OneVentures investee Incoming was one
of six companies to take part in Turner/
Warner Bros’ second annual Media
Camp start-up accelerator programme in
California last month (August).
More than 50 executives of the media
companies mentored key staff of the early
stage businesses.
Sydney-based Incoming is
commercialising predictive behavioural
machine learning and network
management technology developed at the
National ICT Centre of Excellence (NICTA).
The technology is being applied to provide
better access to video material from
mobile devices.
Incoming’s first product, Incoming TV
for mobile, has been downloaded by 1.5
million users. The app monitors users’
video downloading behaviour to predict
future usage and then downloads, at off-peak
times, material likely to be sought.
This reduces demand for bandwidth
at peak times and – significantly for
communications carriers – should make
mobile video users more successful in
downloading the content they want.
Incoming initially targeted mobile video
users but has now shifted its focus to
communications carriers recognising that
they value their end-users having access to
content via mobile devices.
Chief executive Tom Adam says
Incoming is seeking to make watching
video on mobile devices as seamless as
watching television. That is, however, not
the case today with the result that end-users
often “bail out”.
He said downloading difficulties are
inevitable because content distribution
networks were not designed for
transmitting video to mobile devices.
Incoming’s “pre-positioning” of video
content is a way of getting around this.
INVESTEE NEWS
Wireless charging test
offered to electronic device
makers
New Zealand-founded technology company
PowerbyProxi has released an evaluation kit
for electronic devices manufacturers to test
its wireless charging technology.
The Proxi-2D EVK-1 kit includes a
7.5W power transfer receiver which
PowerbyProxi claims is the most powerful
wireless power delivery currently available.
The kit can be used for charging a variety
of devices up to 15W.
Venture-backed PowerbyProxi
demonstrated the system at the Computex
exhibition in Taiwan in June. The company
claims the system offers significant
improvements over the 3.5W-5W systems
currently available.
PowerbyProxi chief executive Greg
Cross said: “The Proxi-2D EVK-1 is the next
step towards getting advanced resonant
wireless charging technology in the hands
of consumers. “Allowing customers to
experience the safety, efficiency and speed
first-hand furthers our goal to enable
innovation in the market.”
PowerbyProxi, which holds a portfolio
of 221 patents worldwide, licenses its
technology and delivery modules to
equipment manufacturers.
The company was established to
commercialise technology developed at
the University of Auckland.
New Zealand venture capital firm Movac
was an early investor in PowerbyProxi and
last year electrical connection devices
company TE Connectivity (NYSE: TEL) led
an investment round which also included
Movac.
CONFERENCES & ROUNDTABLES
Investors to examine
strategies at start-up event
Leading investors will offer advice on
entrepreneurs’ business strategies in front
of a live audience at Tech23 in Sydney on
23 October.
Now in its sixth year, Tech23 is a
technology start-up event designed to
introduce entrepreneurs to customers,
partners and investors. Winners receive
significant prizes.
Twenty-three start-ups will be selected
to present at the event from an expected
150 applicants from all over Australia.
They will present in front of an audience
expected to number more than 400.
The entrepreneurs’ strategies will
be examined by expert panels. Panel
members will include Paul Bassat of
Square Peg Ventures, Michelle Deaker of
OneVentures, angel investor Leni Mayo,
Daniel Petre of AirTree Ventures and
Deena Shiff of Telstra Ventures.
A selection of tech companies at
earlier stages of development will also be
represented at the event, manning booths
in the Innovation Island exhibition outside
the auditorium where presentations will be
made.
Event founder Rachel Slattery, of
Slattery IT, said: “The entire event is
orchestrated to put young tech companies
in direct contact with the people that will
help their businesses grow.”
Event sponsors include NICTA and
CSIRO and emphasis will also be placed
on businesses which use IP developed
with the support of Australian R&D
organisations.
Tech 23 has been the launching pad for
many successful start-ups. The founders
of taxi booking app GoCatch met two of
their three initial investors at Tech23 2010
and the founders of bug tracing service for
IT developers BugHerd were introduced to
their later venture capital investors Starfish
Ventures at the 2011 event.

Dr Dror Ben Naim, founder of online
learning business Smart Sparrow, said the
2012 event had been an important step in
gaining the right exposure for his business.
“Tech23 really helped with media, social
proof and credibility,” he said.
Smart Sparrow is now an investee of
venture capital firm OneVentures and has
expanded its customers from Australian
universities to overseas universities and
international learning services providers.
Prizes at Tech23 2014 will include the
ATP Innovations Explorer Award, which
comprises a week of hosted meetings in
Silicon Valley with potential investors and
customers, and cash prizes from REA
Group and Bendigo Bank. A number of
Tech23 alumni are also offering mentoring
sessions and subscriptions to their
services.
For further information visit: www.
tech23.com.au
INVESTMENT OPPORTUNITY
ONLINE BUSINESS -
GLOBAL APPLICATION
Opportunity for tech-smart
operator at minimal cost to run
business for two years, expanding
consumer base through social
media and other marketing, view
global license at end of term.
Please respond by email:
drkenmcd@gmail.com

FEATURE
LOCAL RETAIL SECTOR
HAS GLOBAL APPEAL
Australian mid-size retailers with
fully integrated service models are
emerging as increasingly attractive
targets for private equity, according to a
report by accountancy firm Grant Thornton.
The report – Retail Dealtracker Report,
Checkout: Shopping for Growth – ranks
Australia seventh globally in terms of M&A
deal volume for the retail sector, a ranking
that is all the more impressive considering
Australia’s economy is significantly smaller
than many of the countries in the rankings.
From the point of view of retail
businesses, the report says private equity
is becoming an ideal partner for mid-size
companies looking for strategic support
and access to capital to execute their
growth plans. Meanwhile, private equity
firms are targeting retail businesses in
large deals.
Private equity firms were the buyers in
several of the largest transactions during
the report’s study period – the three years
to the end of June 2014. Acquisitions in
Australia, were typically followed up with
private equity firms providing additional
investment to finance growth plans.
Despite challenging conditions persisting
in the retail sector in the wake of the
global financial crisis, the report notes
that Australian businesses that are
adapting to changing markets and are
seen as representing good investment
potential.
Peter Thornely, Retail Industry Partner,
Grant Thornton Australia, said: “Despite
the retail pressures, the report highlights
a new retail industry emerging where
businesses offering strong customer
relationships as a point of difference are
providing the best growth opportunities
for private equity investors.
“We’re seeing growth in niche areas like
the pet industry. Big box pet stores have
become the relationship point for pet
owners, offering everything from puppy
training to high end veterinary care to meet
customer needs.”
Meanwhile, shopping centres are
being transformed to stay relevant top
consumers. This includes providing
entertainment and high end dining to draw
foot traffic, a clear trend that retail success
is centred on fully integrated customer
service models.
Mid-size businesses which have partnered
with private equity firms have typically
been able to accelerate growth plans.
“Businesses are thriving post investment
from private equity firms,” Thornely said.
“We’ve seen the likes of Lorna Jane – post
investment by CHAMP Ventures – continue
AUSTRALIAN RETAIL
BUSINESSES ARE ATTRACTING
PRIVATE EQUITY INVESTMENT
FROM LOCAL AND OVESEAS
FIRMS.
transaction levels
450
450
450
400
400
400
300
350
350
350
300
300
250
300
250
250
250
200
200
200
200
150
150
150
150
100
100
100
100
50
50
50
50
2011 2012
450
450
450
400
400
400
300
350
350
350
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Number of deals
deals
300
300
250
300
of 250
250
200
250
Number Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Number 200
200
200
150
150
150
150
100
100
100
100
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Number 50
50
2013
50
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Sources: S&P’s Capital IQ, Mergermarket, Grant Thornton analysis
2011 2012
2011 2013
Sources: S&P’s Capital IQ, Mergermarket, Grant Thornton analysis
Sources: S&P Capital IQ, Mergermarket, Grant Thornton analysis
39%
2%
25%
19%
15%
2014
Australian transaction levels
39%
the United
Australia
observed
the relative
interest in
25% of the
international
Australian deals
3%
4%
25%
54%
22%
Cross border inbound
Domestic
Undisclosed
Distributors/
Wholesale (Ex. Food)
Food Retail Large Retail
Stores
Online Retail Total deals
291 477 5 155 1,161
127 421 4 51 719
68 81 2 22 258
2011 2012
2014
2013
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Number of deals
Total deals Average total deals (309)
Transaction levels
Globally, between 1 January 2011 and 30 June 2014 there
have been 4,328 international merger and aquisition (M&A)
transactions within the retail industry. Of these deals, there
were 114 deals where the target’s primary operations were
listed as being in Australia.
Australia’s distribution of deals according to retail subsector
was comparable to global deals, however Australia had
proportionately more deal activity in Food and Online Retail.
Deal levels
• Deal volumes were lower in 2013 than 2012 and 2011.
This is not surprising given that 2013 was the slowest
year for M&A activity globally since 2009.*
• Globally, the low deal levels continued into the first half
of 2014. However, Australia’s deal activity in the second
quarter of 2014 picked up 75% on the first quarter of
2014, with the total number of deals increasing from 4
in Q1 2014 to 7 in Q2 2014.
International deal activity
International deal mix
Australian deal mix*
Food Retail (1,575 deals)
Distributors/Wholesalers (Ex. Food) (1,249 deals)
Consumer Goods Retail (968 deals)
Online Retail (460 deals)
Large Retail Stores (76 deals)
36%
29%
22%
11%
2%
309
2011 2012
2014
2013
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Number of deals
As retail conditions are slowly improving, we
expect the level of M&A activity in the sector to
increase. A recent positive sign in Australia was
the recent acquisition by US PE firm, Bain Capital,
of a majority stake in Retail Zoo (owner of Boost
Juice). Other signs of improved market confidence
in the sector include the Initial Public Offering
(IPO) of Beacon Lighting, e-commerce business
Mysale’s recent listing on AIM and South African
retailer Woolworth’s takeover offers for David
Jones and Country Road.
Food Retail (45 deals)
Distributors/Wholesalers (Ex. Food) (28 deals)
Consumer Goods Retail (22 deals)
Online Retail (17 deals)
Large Retail Stores (2 deals)
* Refers to deals where the target is listed as being in Australia.
Source: *Australian Financial Review 23 January 2014, which quoted Thomson Reuters
2011 2012
2014
2013
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Number of deals
Total Total d deaelsals AAvevreargaeg teot atol dtaeal lds e(3a0ls9 (d3e0al9s))
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Number of deals
2 Checkout: Shopping for growth
comments
with the highest number of deals were the United
United Kingdom (UK) and Japan, with Australia
globally in terms of deal volume over the observed
high ranking for Australia considering the relative
economy.
reasonably high level of international interest in
businesses in Australia, with at least 25% of the
businesses that were sold having international
Australian deals
3%
4%
25%
54%
22%
Cross border inbound
Domestic
Undisclosed
position (Top 15 countries)
Country Consumer
Distributors/
Food Retail Large Retail
Online Retail Total deals
2011 2012
2013
0
of deals
2014
Transaction levels
Globally, between 1 January 2011 and 30 June 2014 there
have been 4,328 international merger and aquisition (M&A)
transactions within the retail industry. Of these deals, there
were 114 deals where the target’s primary operations were
listed as being in Australia.
Australia’s distribution of deals according to retail subsector
was comparable to global deals, however Australia had
proportionately more deal activity in Food and Online Retail.
Deal levels
• Deal volumes were lower in 2013 than 2012 and 2011.
This is not surprising given that 2013 was the slowest
year for M&A activity globally since 2009.*
• Globally, the low deal levels continued into the first half
of 2014. However, Australia’s deal activity in the second
quarter of 2014 picked up 75% on the first quarter of
2014, with the total number of deals increasing from 4
in Q1 2014 to 7 in Q2 2014.
International deal activity
International deal mix
Australian deal mix*
Food Retail (1,575 deals)
Distributors/Wholesalers Consumer Goods Retail Online Retail (460 deals)
Large Retail Stores (36%
29%
22%
11%
2%
2012
2013
0
of deals
As retail conditions are slowly improving, we
expect the level of M&A activity in the sector to
increase. A recent positive sign in Australia was
the recent acquisition by US PE firm, Bain Capital,
of a majority stake in Retail Zoo (owner of Boost
Juice). Other signs of improved market confidence
in the sector include the Initial Public Offering
(IPO) of Beacon Lighting, e-commerce business
Mysale’s recent listing on AIM and South African
retailer Woolworth’s takeover offers for David
Food Retail (45 deals)
19%
Distributors/Wholesalers Consumer Goods Retail Online Retail (17 deals)
Large Retail Stores (25%
* Refers to deals where the target is listed as being in Australia.
15%
2%
Source: *Australian Financial Review 23 January 2014, which quoted Thomson Reuters
2011 2012
2014
2013
0
TToottaal ld deaelsals AAvevreargaeg teot atol dtaeal lds e(3a0ls9 (d3e0al9s))
0

FEATURE
to enjoy strong growth, accessing overseas
markets and using social media to engage
with followers.”
Buyers within the local market have been
seeking businesses with strong brands and
omni-channel strategies.
“It’s imperative for mid-size retailers
to build omni-channel strategies in an
attempt to attract customers and service
all their needs whether they are in store
or online. This trend is driving M&A activity
within the sector as retailers look to secure
their e-commerce channels by acquiring
online businesses. We’re also seeing high
multiples paid for these online businesses,
most notably those of a reasonable size in
a specialist niche,” Thornely said.
The report says international buyers
accounted for at least 25 per cent of
Australian retail acquisitions over its study
period.
“Overseas buyers are interested in
Australian retail businesses because of
our stable regulatory environment, our
strong positioning in the Asia Pacific region
and the strength of our currency,” said
Thornely. “We’ve seen how (Spain-based)
Zara has benefited from this ... some of its
most profitable operations are reportedly
in Australia.”
Turning to details in the report, the
spread of deals across retail subsectors
in Australia was largely in line with
the global spread but Australia had
proportionately more deal activity in
food and online retail. There were 45
M&A deals in food retail, 28 in distribution
and wholesaling (excluding food), 22 in
consumer goods retail, 17 in online retail
and two involving large retail stores.
The report notes that private equity
firms are particularly interested in acquiring
businesses with strong brands, solid
cash flows and leading positions in niche
markets.
In regard to niche markets, Michael
Green, managing partner of Melbourne
investment company Green Capital
Partners is quoted as saying his company
focuses on niche opportunities in retail
where broader trends are creating “wind at
your back” and increased growth potential.
Green Capital Partners is a significant
investor in Sydney health food-focused
supermarkets business About Life.
Top 10 international deals*
Top 10 international deals*
1 Acquirer: Loblaw Companies Limited
Target: Shoppers Drug Mart Corporation
Deal value: A$14,324 million (m)
Acquirer country: Canada
Target country: Canada
Date: 28/03/2014
EV/EBITDA Multiple: 11.1x
1 Acquirer: Loblaw Companies Limited
Target: Shoppers Drug Mart Corporation
Deal value: A$14,324 million (m)
Target country: Canada
Date: 28/03/2014
Loblaw Companies Limited (Loblaw), a subsidiary of George Weston
Limited, is one of Canada’s largest food retailers and a leading provider
of drugstore, general merchandise and financial products and services.
Shoppers Drug Mart Corporation was the licensor of full service retail
drug stores. The acquisition strengthened Loblaw’s market position in
the growing health, wellness and nutrition sectors of the market. The
acquisition was also expected to yield annual cost synergies of $300m
within three years.
Loblaw Companies Limited (Loblaw), a subsidiary of George Weston
Limited, is one of Canada’s largest food retailers and a leading provider
of drugstore, general merchandise and financial products and services.
Shoppers Drug Mart Corporation was the licensor of full service retail
drug stores. The acquisition strengthened Loblaw’s market position in
the growing health, wellness and nutrition sectors of the market. The
acquisition was also expected to yield annual cost synergies of $300m
within three years.
2 Acquirer: Temasek Holdings Pte.
2 Acquirer: Temasek Holdings Pte.
Target: Olam International Ltd.
Deal value: A$11,758m
Acquirer country: Singapore
Target country: Singapore
Date: 23/05/2014
Temasek Holdings Pte. is a Singaporean government owned investment
firm. Temasek Holdings acquired an additional 75% stake in Olam, one
of the world’s largest suppliers of cocoa, coffee and nuts and also one of
the largest cotton companies. Temesak was seeking to capitalise on the
expected increase in global demand for food.
Temasek Holdings Pte. is a Singaporean government owned investment
firm. Temasek Holdings acquired an additional 75% stake in Olam, one
of the world’s largest suppliers of cocoa, coffee and nuts and also one of
the largest cotton companies. Temesak was seeking to capitalise on the
expected increase in global demand for food.
Target: Olam International Ltd.
Target country: Singapore
Date: 23/05/2014
3 Acquirer: Ares Management LLC; Canada
Pension Plan Investment Board
Target: Neiman Marcus Group LTD LLC
Acquirer country: United States
Target country: United States
Date: 25/10/2013
EV/EBITDA Multiple: NA
Neiman Marcus Group Ltd LLC (Neiman Marcus) is one of the largest
luxury, department store retailers in the US. It also operates a high
end, online retailing division. The two PE funds bought the business
with the intention of injecting substantial capital to strengthen the
online retail business and to look for opportunities to expand the brand
geographically. The acquisition was expected to be timed to capitalise
on a forecast a revival in the luxury retail segment, as the US economy
starts to improve.
3 Acquirer: Ares Management LLC; Canada
Pension Plan Investment Board
Target: Neiman Marcus Group LTD LLC
Date: 25/10/2013
4 Acquirer: CP ALL Public Company Limited
Target: Siam Makro Public Company
Limited
Acquirer country: Thailand
Target country: Thailand
Date: 26/06/2013
Neiman Marcus Group Ltd LLC (Neiman Marcus) is one of the largest
luxury, department store retailers in the US. It also operates a high
end, online retailing division. The two PE funds bought the business
with the intention of injecting substantial capital to strengthen the
online retail business and to look for opportunities to expand the brand
geographically. The acquisition was expected to be timed to capitalise
on a forecast a revival in the luxury retail segment, as the US economy
starts to improve.
Siam Makro Public Company Limited (Siam Makro) is a leading discount
chain store in Thailand. It was acquired by CP ALL Public Company
Limited (CP), which operates thousands of 7-Eleven stores in Thailand.
The acquisition was undertaken in order to strengthen CP’s portfolio
at a time when the sector was expected to benefit from government
measures to spur consumption in Thailand. CP also planned to expand
Siam Makro throughout Southeast Asia, China and Pakistan. The
business was purchased at a premium transaction multiple of 30.2x on
the expectation of strong growth opportunities for the business in South
East Asia.
4 Acquirer: CP ALL Public Company Limited
Target: Siam Makro Public Company
Limited
Acquirer country: Thailand
Target country: Thailand
Date: 26/06/2013
5 Acquirer: Alimentation Couche-Tard Inc.
Target: Statoil Fuel & Retail ASA
Target country: Norway
Date: 19/06/2012
Siam Makro Public Company Limited (Siam Makro) is a leading discount
chain store in Thailand. It was acquired by CP ALL Public Company
Limited (CP), which operates thousands of 7-Eleven stores in Thailand.
The acquisition was undertaken in order to strengthen CP’s portfolio
at a time when the sector was expected to benefit from government
measures to spur consumption in Thailand. CP also planned to expand
Siam Makro throughout Southeast Asia, China and Pakistan. The
business was purchased at a premium transaction multiple of 30.2x on
the expectation of strong growth opportunities for the business in South
East Asia.
Alimentation Couche-Tard Inc. (Couch-Tard) is a large independent
convenience store operator in North America. Statoil Fuel & Retail
ASA (Statoil Fuel & Retail) is a leading convenience and fuel retailer in
the high growth markets of Central and Eastern Europe. Couch-Tard
planned to leverage its experience in the North American convenience
store market to enhance Statoil Fuel & Retail’s retail business. The
acquisition also provided Couch-Tard with greater diversification and
an entry platform into the European market at a time when market
conditions were expected to be improving.
*Where deal values are available
5 Acquirer: Alimentation Couche-Tard Inc.
Alimentation Couche-Tard Inc. (Couch-Tard) is a large independent
convenience store operator in North America. Statoil Fuel & Retail
ASA (Statoil Fuel & Retail) is a leading convenience and fuel retailer in
the high growth markets of Central and Eastern Europe. Couch-Tard
planned to leverage its experience in the North American convenience
store market to enhance Statoil Fuel & Retail’s retail business. The
acquisition also provided Couch-Tard with greater diversification and
an entry platform into the European market at a time when market
conditions were expected to be improving.
Large retail businesses are looking for opportunities to expand their
businesses internationally.
Credit Card BANK
Consumer goods Food retail Large retail stores Online retail Distributors/Wholesalers 4321 9876 5012 9900
Target: Statoil Fuel & Retail ASA
Target country: Norway
Date: 19/06/2012
*Where deal values are available
6 Acquirer: Bain Capital Private Equity (Bain)
VALID
FROM 12/12 EXPIRES
END 09/16
Mr J Smith
Skylark Co. Ltd (Skylark) is a Japanese restaurant chain operating
approximately 3,500 restaurants under 48 brand names, including
Kozo Sushi Chain and Gusto. The restaurant chain is positioned to take
advantage of the slow economic growth in Japan, as consumers look
for value options. Bain intended to further expand the business in Japan
and look for opportunities to diversify the business outside Japan. Bain
has also invested in other restaurant businesses globally, including in
Domino’s Pizza, Burger King and Dunkin’ Brands.
Large retail businesses are looking for opportunities to expand their
businesses internationally.
Target: Skylark Co., Ltd.
Target country: Japan
Date: 30/11/2011
7 Acquirer: Albertsons, LLC
Target: New Albertson’s, Inc.
Date: 21/03/2013
Albertsons LLC (Albertsons) acquired five supermarket chains
operating under different banners from a wholly owned subsidiary
of Supervalu. The 877 stores acquired were complementary to
Albertson’s existing operations, which are focused on traditional
grocery retail. Albertson planned to invest in the stores to improve
operations and grow revenues. The business was sold by Supervalu,
who was restructuring its business in response to the difficult retail
conditions, which had placed financial pressure on the company.
8 Acquirer: Leonard Green & Partners, L.P.;
TPG Capital, L.P.
Target: J. Crew Group, Inc.
Date: 07/03/2011
J.Crew Group Inc. (J.Crew) is a multi-channel retailer of women’s,
men’s and children’s apparel, shoes and accessories and had 246
stores in the US at the time of the transaction. The business was
bought by two PE funds that already had significant holdings in the
retail sector. The investors saw the potential to capitalise on J.Crew’s
strong brand and multi-channel strategy to further expand the
business, both in the US and internationally.
9 Acquirer: Golden Agri-Resources Ltd
Target: PT Sinarmas Distribusi Nusantara
(SDN)
Target country: Indonesia
Date: 02/06/2014
SDN primarily operates as a distributor of fast moving consumer
products. Golden-Agri Resources is the world’s second largest palm
oil plantation company; it cultivates, harvests and refines crude palm
oil into products such as cooking oils and margarine.
10 Acquirer: Hudson’s Bay Company
Target: Saks Incorporated
Target country: US
Date: 04/11/2013
Hudson’s Bay Company (Hudson’s Bay) is a large mid-market Canadian
department store chain. Saks Incorporated (Saks) is one of the most
well recognised luxury retailers in the US. Hudson’s Bay acquired
Saks because its strong, unique brand would add a luxury dimension
to Hudson’s Bay’s lower priced stores. Hudson’s Bay also planned to
expand Saks into Canada and to continue to roll out Saks’s outlets
across the US.
Sources: S&P Capital IQ, Mergermarket
NA: Not available
Credit Card BANK
Consumer goods Food retail Large retail stores Online retail Distributors/Wholesalers 4321 9876 5012 9900
VALID
FROM 12/12 EXPIRES
END 09/16
Private Equity firms were the buyers Mr J Smith
in 30% of the largest
transactions.
Dealtracker for the retail industry 5 6 Acquirer: Bain Capital Private Equity (Bain)
Target: Skylark Co., Ltd.
Target country: Japan
Date: 30/11/2011
Skylark Co. Ltd (Skylark) is a Japanese restaurant chain operating
approximately 3,500 restaurants under 48 brand names, including
Kozo Sushi Chain and Gusto. The restaurant chain is positioned to take
advantage of the slow economic growth in Japan, as consumers look
for value options. Bain intended to further expand the business in Japan
and look for opportunities to diversify the business outside Japan. Bain
has also invested in other restaurant businesses globally, including in
Domino’s Pizza, Burger King and Dunkin’ Brands.

FEATURE
Green says: “The organic food market
is expected to grow 10 per cent to 15 per
cent per year as consumers increasingly
realise the health benefits of clean
food and the premium price over
conventional food narrows. At AboutLife,
we focus on creating an attractive and
authentic shopping experience with a
deep range of products where we can
educate customers on the benefits of
clean eating.”
George Pezaros of Degari Bakery Cafe
credits his company’s private equity
investors NBC Capital with improving “back
of house operations”.
He says: “They have put the right tools
in place to prepare our business for our
next progressive growth phase. We also
expect to benefit from their merchandising
and management experience as we
continue to grow.”
The report predicts that as retail
conditions slowly improve the level of retail
M&A deals in Australia will also increase.
It notes as positive signs the acquisition
(from The Riverside Company) of a
majority stake in Retail Zoo – the owner
of Boost Juice – by US private equity firm
Bain Capital; the IPO of Beacon Lighting;
the listing on the AIM board of the
London Stock Exchange of e-commerce
business Mysale; and South African retailer
Woolworth’s takeover offers for David
Globally, private equity firms were active
in 15 per cent of total retail transactions
and these were weighted toward larger
transactions.
Of 633 deals in which private equity
firms were involved, they were buyers in 37
per cent, sellers in 41 per cent and were on
both sides in 22 per cent.
Of 4,328 M&A retail transactions globally,
Australia accounted for 114 deals.

Australian Private Equity & Venture Capital Journal // September 2014

Australian Private Equity & Venture Capital Journal // September 2014

Recommended

Recommended

More Related Content

What's hot

What's hot (16)

Similar to Australian Private Equity & Venture Capital Journal // September 2014

Similar to Australian Private Equity & Venture Capital Journal // September 2014 (20)

More from CAR FOR YOU

More from CAR FOR YOU (20)

Recently uploaded

Recently uploaded (20)

Australian Private Equity & Venture Capital Journal // September 2014