Advent V

Advent V is managed by Melbourne based Advent Private Capital ( Founded in 1984 Advent is one of the most experienced private equity investment firms in Australia, having invested in over 80 companies since inception. Advent have built substantial value across their investments over a full range of economic conditions and portfolio cycles. Advent Limited, Advent III and Advent IV Private Equity Funds each achieved top quartile returns for their respective vintage years.

The Advent V fund is focussed on investing into mid market, buyout and expansion funding opportunities into profitable, predominately Australian, businesses with enterprise value of between $10 million and $150 million.

Advent V has to date completed eight investments; Locker Group Holdings, Solomon Food Group, Scada Group, UGM Mining Solutions, Integrated Packaging Group, SJ Electrics, Genesis Care and Orionstone.

Locker Group Holdings is a manufacturer and supplier of perforated plate, expanded metal, woven wire, wire belting, walkway and platform systems, grating and screening products across a wide range of applications for the general industrial, architectural building, commercial construction, infrastructure and resources sectors. Advent’s investment funded the replacement of UK-based investors and introduced management to the additional financial resources and strategic input of a private equity investor. Existing management shareholders also re-invested alongside Advent.

Following Advent’s original investment in 2006, Locker grew to become the market leader in Australia with additional offshore manufacturing operations. Locker built up its manufacturing footprint, invested heavily in equipment, sales and operations, and expanded its operations offshore into India and China.

Under Advent’s guidance, the strengthened sales and marketing team also began capitalising on fresh opportunities in the architectural and construction industries, along with the engineering,  infrastructure and mining markets.

In February 2013,  Advent completed the sale of its investment in Locker Group Holdings Pty Ltd to US-based Valmont Industries, Inc. Valmont acquired 100% of the group, bringing Advent’s return to 2.5 x the original investment.

Valmont Industries is a global provider of engineered products and services for infrastructure, as well as irrigation equipment for agriculture. The Locker acquisition complements Valmont’s existing Australian operations.

Solomon Food Group is a Queensland based independent broad-line wholesaler engaged in the supply and distribution of fresh, frozen, dried and chilled foods to all segments of the food service industry.

Advent’s initial investment in Solomon funded the acquisition of two complementary businesses and the replacement of an existing shareholder. Advent continued to provide ongoing capital to support the roll-up as it continued through 2007 and 2008.

In February 2009 the core Brisbane business of the Solomon Food Group was sold to Metcash one of Australia’s largest food distributors and the parent company of the IGA supermarket chain.

In January 2010, Advent V sold all of its remaining interests in the company.

Scada Group is a leading provider of systems integration solutions and supervisory control and data acquisition (SCADA) products to water utilities and oil & gas businesses. These solutions allow Scada’s clients to monitor and control their valuable infrastructure assets, meet legislative and regulatory standards, and improve safety, efficiency and security of supply. For example, Scada’s systems are utilised by Sydney Water to monitor its water pipelines, reservoir levels and water treatment plants.

Advent’s investment in Scada in March 2006 (via Advent IV) funded the replacement of the existing private equity investor and enabled management to continue with their growth strategies for the business. Advent V invested in Scada in May 2007 to enable the company to acquire a complimentary business to further enhance earnings growth.

On the 23rd April 2010 Advent sold SCADA Group Pty Ltd to the European based Schneider Electric.

The agreed valuation for the sale was AUD$200 million, with a small retention for working capital adjustments and warranties. The sale price represented 11 times forecast FY10 EBITA, which reflects the fact that the Company had been built up to be a world class strategic asset, under the stewardship of Advent.

Advent Management announced that Advent V would make a return of 3 times its total investment in SCADA Group representing an Internal Rate of Return (IRR) of 44%.

UGM Mining Solutions (UGM) is a leading underground coal mining contractor based in the Hunter Valley (NSW). Its primary contracting services focus on: coal cutting; conveyor installation and maintenance; outbye services including secondary roof support, ventilation and civil services; and diesel fleet hire and servicing.

UGM’s key customers are Australia’s major coal mine owners including Xstrata, Anglo Coal, Peabody and Centennial Coal. The Business employs 400 people across its operations in the NSW and QLD coalfields.

Advent’s investment in UGM in September 2007, provides the Business with capital to fund acquisition opportunities that add scale and diversity to its operations in coal mining contracting as well as to provide a platform for growth into other mining sectors in Australia.

Integrated Packaging Group (IPG) is an Australian stretch film wrap manufacturer and distributor whose products are used in industrial and agricultural applications in Australia and New Zealand. IPG also manufactures and distributes a full range of pallet wrapping machines.

Advent’s investment in IPG also enabled the company to acquire the business and assets of Amcor Flexibles, Kewdale WA (AFK). AFK is a flexible packaging business producing cast and blown polyethylene products including stretch and shrink film that it markets throughout Australia and New Zealand. The company also distributes a full range of pallet wrapping machines and associated equipment.

During September 2017, Integrated Packaging Group (‘IPG’) entered into an agreement to merge with ASX listed, Pro-Pac Limited (‘PPG’) in a reported $177.5m deal.

The merger is expected to deliver a complementary blue-chip customer base with no material crossover, and significant cost synergies and cross selling opportunities making the newly merged group the leading player in the flexible and industrial packaging manufacturing and distribution market.

The completion date for the merger was 6th November following certain conditions precedent being met, including the issue of shares to the vendors which were received by Advent V on 26 October 2017 following PPG shareholder approval. Following the merger, Advent V became the second largest shareholder in the merged group.

As reported in the media, the merger was funded through a combination of $60.0 million Pro-Pac shares issued to the vendors, a $54.8 million fully underwritten equity raising and $70.0 million from a new debt facility.

Advent V Executive Chairman, Rupert Harrington has been appointed to the Board of PPG as Non Executive Director. Other IPG senior management, including John Cerini, the current CEO of IPG, and CFO, Patsy Ch’ng have also taken up seniorpositions in the merged group.

Following the completion of the merger VPEG received its share of the initial cash component of the transaction in mid November 2017.

SJ Electrics (SJE) is a privately-owned electrical engineering, contracting and switchboard manufacturing company with offices in Melbourne, Sydney, Brisbane, Adelaide and Perth, and over 325 staff.

In a highly fragmented market, SJE has a high market share in some of its key niches, with an emphasis on refrigeration and “mission critical” commercial installations.

Genesis Care consists of an established national network of premium cardiology (HeartCare) and radiation oncology practices (CancerCare).

Genesis Care’s cardiology practices are located in Brisbane, Melbourne, Adelaide and Perth while its radiation oncology practices are located in Sydney and Adelaide. The company employs over 450 staff across its businesses including 60 doctors across both specialties.

In August 2012, Advent Private Capital Pty Ltd completed the sale of Advent V’s shares in Genesis Care to a fund managed by Kohlberg Kravis Roberts & Co. L.P. (KKR). The deal was struck at an enterprise value multiple of around 10 times forward earnings and KKR  invested approximately $350m to take an ownership stake of more than 60 per cent in Genesis Care.

The sale delivered Advent V investors, including VPEG, a top quartile IRR over the 3 year period of the investment, generating a 2.8 x money multiple for investors.

Orionstone is a heavy equipment rental  and sales company primarily focused on the mining industry with operations in Western Australia and Queensland.

Orionstone rents heavy earthmoving equipment to major mining and civil infrastructure customers across Australia. Its head office is in Mackay and it has a substantial office in Perth. It also has workshop facilities in Perth, Kalgoorlie and Mackay.

On 27 April 2017, Advent V (‘Advent V’) announced Orionstone had effectively completed the three-way merger and recapitalisation with ASX listed Emeco Holdings Pty Ltd (‘Emeco’) and Andy’s Earthmovers Pty Ltd (’Andys’). Following the merger, the shares acquired in Emeco were sold by Advent V in an off market transaction on 27 April 2017 to an International Investment Fund Manager.

The successful completion of the merger and subsequent sale of the shares received from the merger, resulted in a positive outcome for Advent V investors including VPEG, compared to the carrying value of the investment, particularly in light of the continuing difficult industry conditions for the mining services industry.