Exited Investments

Paradise Food

www.paradisefood.com.au

In June 2006, Archer Capital led the management buyout of Paradise Foods, Australia’s second largest biscuit manufacturer and marketer. The company has an extensive range of branded biscuits, is a major supplier of private label biscuits and bars to a number of grocery retailers in Australia, and has low-cost, state-of-the-art biscuit and bar manufacturing facilities in its Brisbane plant. Paradise has an impressive record of innovation and sales growth, with brands such as Cottage Cookies, Lites and Veri Deli increasingly becoming the preferred choice of Australian biscuit eaters. Archer is working with management to capitalise on the growth opportunities available to the company, which include the growing demand for private label products from Australia’s major grocery retailers, the continued development of the company’s branded product range and the growth of new distribution channels.

RED Paper Group

www.redpaper.com.au

Archer Capital led the $70 million management buy in of paper merchanting businesses Edwards Dunlop and Commonwealth Paper Company from PaperlinX Limited in September 2001. The businesses were merged, forming Australia's largest independent paper merchanting group. In April 2002, RED Paper Group acquired the paper distribution businesses of New Zealand-based forest products company Carter Holt Harvey Limited: Raleigh Paper Company in Australia and BJ Ball in New Zealand. The $61 million acquisition consolidated RED Paper Group's market position as Australasia's largest independent paper merchant, with a 25% market share in both Australia and New Zealand.

Emeco

www.emeco.com.au

Archer Capital co-led the $450 million management buyout of Emeco Ltd in December 2004. Emeco, with operations in Australia, Indonesia, North America and Europe is the market leading provider of "low-houred" large scale earth moving equipment, such as dump trucks, bulldozers and excavators, for sale, lease and rent. The companies customer base is predominantly in the mining industry but it also services some of the larger construction companies with its fleet of over 750 pieces of rental equipment. Emeco uses its global procurement network to source “low-houred” equipment for both the rental fleet and sales division.

SULO

www.sulo.com.au

Archer Capital led the management buyout of SULO’s Australian and New Zealand operations in March 2005. SULO is one of the world’s largest providers of waste management services. In Australia SULO has operated for over 20 years, manufacturing and distributing mobile garbage bins and related accessories to local councils and waste contractors. In 1996, SULO built a highly automated, state of the art injection moulding facility at Somersby on NSW’s central coast where it manufactures "24/7" and has developed a reputation for providing the largest and highest quality range of mobile waste containment products. In 2006, SULO acquired Rabbit Plastics, a rotational moulding business that manufactured industrial bins and lids. In 2007, Sulo commenced manufacturing water tanks from a newly leased facility in West Gosford.

Archer Capital Fund 2 sold its stake to management in November 2007.
 

John West Foods

www.johnwest.com.au

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

Repco

www.repco.com.au

Archer Capital co-led the $255 million acquisition of Automotive Parts Group Holdings (now "Repco Group"), formerly Pacific Automotive, from Pacific Dunlop Ltd in September 2001. Repco is the leading automotive aftermarket parts and accessories wholesaler and distributor in Australia and New Zealand. Repco's management team acquired a significant minority shareholding in the business as part of the MBO arrangements.

On acquisition, Repco comprised five core operating divisions:

• Repco Australia, the largest reseller in the Australian automotive aftermarket, supplying trade repairers, OEM dealers and retail customers.
• Repco New Zealand, the largest reseller of automotive aftermarket parts in New Zealand.
• Ashdown, the major player in the specialist automotive electrical segment in Australia.
• Motospecs, an assembler of replacement kits, servicing wholesalers and resellers in Australia.
• CarParts, a marketing and sales organisation specialising in the wholesale sector of the automotive aftermarket.

The business was operationally re-shaped in the first 12 months of ownership, with IT functions reinstated and service levels improved to regain lost share, distribution centres rationalised, the wholesale division sold and excess working capital identified and eliminated. Over $100 million of cash was generated in the first 12 months, enabling a recapitalisation that returned to investors the equity invested originally.

With operations streamlined, Repco further leveraged its inherently strong market position, with EBITDA increasing 25% from 2001 to 2003.

Repco was exited via an Initial Public Offering (IPO) in November 2003.

Tasman Building Products

www.pinkbatts.co.nz

In 1998 Archer Capital initiated and co-led the $165 million management buyout of Tasman Building Products Limited, formerly the Carter Holt Harvey Building Products Group. On acquisition, Tasman’s core businesses were:

• Insulation New Zealand, the largest manufacturer and distributor of insulation products in New Zealand under the "PinkBatts" brand. 
  
  
• Insulation Australia, the manufacturer and distributor of insulation products in Australia under the "Fattbatts" brand. 
  
  
• Tasman Roofing, the world’s largest producer of steel roof tiles with manufacturing facilities in New Zealand and the USA. 
  
  
• Tasman Sinkware, the manufacturer and distributor of stainless steel sinks in Australia under the Oliveri brand. 
  
  
• Tasman Access Flooring, the largest producer and installer of access flooring for the Australian commercial building market.

The Group performed very well from acquisition.  In mid 2001, following three years of strong performance by the company, Archer Capital Fund 1’s largest co-investor, AMP Private Equity, required an exit.  Archer Capital took the view that this investment would generate further value and so decided that Archer Capital Fund 2 would acquire the AMP shareholding.  The business was releveraged, initial investors paid a distribution in excess of original funds invested, and Archer Capital Fund 2 invested a further $23 million to increase Archer Capital's overall stake to 54% of the company.

Tasman was sold to Fletcher Building Products in September 2003. 

www.tasmaninsulation.com

MCK Group

www.mckgroup.com.au

Archer Capital initiated and co-led the $180 million management buyout of MCK Group in August 1998. Formerly McKechnie Pacific, the Australasian subsidiary of McKechnie plc, a UK-listed engineering group. When acquired, MCK was a diversified metal manufacturer whose largest business was focused in low growth commodity markets. Over the past seven years Archer has driven the strategic repositioning of the group with the result that today MCK is exclusively focused on the production of plastic products for the automotive and industrial OEM markets.

Australian Geographic

www.australiangeographic.com

Archer Capital led the $50 million management buyout of Australian Geographic Pty Limited from the John Fairfax group in December 1998. Australian Geographic comprises a publishing and a retailing division. The publishing division produces the Australian Geographic Journal (with the largest subscriber base of any magazine in Australia), the DMag magazine, specialist book titles, travel guides, diaries and calendars.

The retail division of Australian Geographic includes 50 Australian Geographic branded stores and 23 Socrates stores, which have been rolled out since the acquisition of Socrates in 2004. Australian Geographic sells a diverse range of products in categories such as travel, Australiana, science and kids discovery; while Socrates specialises in educational toys, novelty items, games and puzzles. The retail operations of Australian Geographic also include a wholesaling business, which supplies and maintains retail modules in locations around Australia and a mail-order business. Archer Capital and the Australian Geographic management team are working to increase the value of the Australian Geographic brand by continuing to grow retail sales, improving gross margins and increasing journal subscribers.

Signature Security Group

www.signaturesecurity.com.au

Archer Capital initially invested $10.2million in the Signature Security Group in June and September 1999. Signature's business involves the provision of bundled security services, including the sale or lease, installation, monitoring and maintenance of security equipment. Its core market comprises residential and small to mid-sized commercial customers. Signature began its operations in March 1997 by purchasing the security monitoring business of Securitas in Australia and New Zealand and continued to grow through a combination of acquisitions and organic growth to become the second largest provider, behind Chubb, of security monitoring services in Australasia. Although the strategy was sound, the execution of the roll-up was poor and the company encountered some financial difficulties leading to a recapitalisation of the company in August 2001 at which time Archer Capital made a follow-on investment of $3.1m. Although the company’s smallest institutional shareholder, Archer Capital played a leading role in the recapitalisation and turnaround of the business. This turnaround involved significant changes to the group’s operating strategy, a reconfiguration of senior management and a reduction in the cost base. This plan saw the group show a swing of more than $40million in cash generated by the business in the following two years. The business was sold in December 2005 to Allco Equity Partners.
 

Dome Coffees

www.domecoffees.com.au

Dôme Coffees Australia is a specialty coffee group with operations in coffee roasting and wholesaling, café franchising and café ownership. Established in Perth in 1983 as a coffee wholesaling operation for the Western Australian market, Dôme later opened Dôme Café outlets in Perth, Melbourne and Brisbane. Dôme Café outlets are designed to create an ambience sympathetic to the classic European coffee culture, with an emphasis on serving fine coffee under the Dôme brand.

By 2003, the Dôme network had grown to 60-plus outlets in six countries: Australia, Singapore, Malaysia, Indonesia, the Philippines and the United Arab Emirates. Archer Capital owned 50% of the equity in Dôme, alongside its four founders. Archer Capital’s investment in Dôme enabled the company to expand its presence in Australia, particularly in the key markets of Sydney, Melbourne and Brisbane.

Dôme was sold to Naxis Investment Partners (Asia) in November 2003.