Jarden tips recovery in mergers, acquisitions and private equity deals, after stronger earnings

Reporting improved earnings, trans-Tasman investment bank Jarden believes September marked a turning point for deal optimism and corporate confidence.

Among Jarden’s recent investment banking deals is a capital raising for Auckland International Airport.

Trans-Tasman advisory firm Jarden believes September marked a turning point for deal optimism and corporate confidence, boding well for takeover activity over the next five months even as the firm homes in on controlling costs.

In a dispatched quarterly shareholder update, obtained by The Australian, Jarden’s executive chairman Fraser Whineray said the firm had gone from being in a challenging position to navigating the “most difficult market conditions in two decades” and raking in record revenues.

A Jarden spokeswoman verified the contents of the shareholder update, declining to comment further.

The New Zealand-headquartered firm managed capital raisings for Auckland International Airport and beleaguered materials group Fletcher Building during the six months ended September 30, and also worked on a sell down by ASX-listed Woolworths in pubs and hotel group Endeavour.

The shareholder update showed Jarden posted earnings before interest, tax, depreciation, amortisation, and bonuses of NZ$38m ($34.5m) for the six months ended September 30, on revenue of NZ$116m. That was up from earnings of just NZ$6m in the same period last year and revenues of NZ$83m.

“Against subdued market conditions, this is a very pleasing outcome and demonstrates the operating leverage of revenue growth when costs are controlled,” Mr Whineray said in the document. He noted that on a monthly basis, September was the firm’s most successful month since entering the Australian market in 2020.

“Our continuing operating expenses decreased slightly to NZ$68m, consistent with budget. We will remain focused on cost control.”

Jarden co-chief executive Aidan Allen.

Jarden co-chief executive Sarah Rennie.

Mr Whineray – who is now a shareholder in Jarden since taking the reins in July – added that all of Jarden’s business units were “in line with or ahead” of budget expectations for the year ended March 31, 2025.

But the earnings headway follows a tumultuous period for Jarden in Australia since 2020. An entity called Jarden Australia Holdings Pty Ltd – a subsidiary of the New Zealand-incorporated Jarden Group – posted steep losses of $23m for the 12 months ended March 31, 2023. In Jarden’s following financial year, the firm recovered to a net profit of $16.5m helped by higher advisory and capital markets fees and an income tax benefit of $14.8m, the latest accounts lodged with the corporate regulator showed.

Australian rival Barrenjoey, which counts former UBS rainmakers Matthew Grounds and Guy Fowler as co-executive chairmen and also began operations in 2020, has also started to get traction. The firm declared a maiden dividend of $11m and reported an net profit of $34.7m for the 12 months ended June 30, reversing a loss.

Industry players have repeatedly argued the Australian investment banking sector is too crowded for the size of the market, which exacerbates the fight for fees when deal and trading activity slumps.

The investor update said Jarden would transition to holding quarterly share auctions for shareholders, with the next one slated for late this month.

Mr Whineray used to shareholder update to suggest Jarden had passed the worst of a softer period for deal making.

“While the beginning of the year was relatively quiet, September marked a shift in corporate confidence, as illustrated by recent notable transactions, and supported by key economic indicators,” he said. “The team is cautiously optimistic about an uptick in activity in the second half, particularly with private equity firms looking to recycle capital.”

Joint Jarden chief executives Aidan Allen and Sarah Rennie told shareholders the advisory business had a robust pipeline of work and was “well ahead of budget” as the firm’s second half played out.
Still, while the firm’s Australian league table performance has improved since last year, Jarden continues to sit outside the top five investment banks for equity capital markets deals and outside the busiest 10 players for merger and acquisition advisory work. According to London Stock Exchange Group, formerly Refintiv, Jarden ranks eighth so far this year on equity capital markets with Australian deals of US$716.6m.

In deal advisory, with any Australian involvement, the firm sits in 15th spot working on transactions worth US$1.9bn.

Jarden does have a string of deals in both categories that are yet to complete that will add to its fee haul in coming months. One of those, is the ASX-listing of civil construction and equipment hire company Symal which is moving ahead with a float this year. Symal is raising about $136m with Jarden and Ord Minnett acting as joint lead managers.

The shareholder update said Jarden’s fixed income, currencies and commodities revenue declined in the first half, attributing the fall to lower interest on client funds.

This year saw Jarden conduct a sell down relating to its wealth management arm. That was facilitated via a merger involving National Australia Bank‘s NZ wealth business and an investment through private equity firm Pacific Equity Partners.

NAB and Jarden received a cash payment along with a retained shareholdings of 45 per cent and 20 per cent of the merged business respectively while PEP purchased a 35 per cent stake.

Mr Whineray also used the shareholder update to address Jarden’s culture.

“The annual employee survey was recently completed which also reflects tremendous progress,” he said.

Jarden was in 2022 forced to commission an independent review of workplace behaviour after new concerns were raised by an Australian employee, because an original complaint was so poorly handled that two staff members resigned.

Originally published as Jarden tips recovery in mergers, acquisitions and private equity deals, after stronger earnings