ACCC warms up to be tougher cop on the corporate beat finally

Sturt Krygsman illustration of Gina Cass-Gottlieb of the ACCC.

Gina Cass-Gottlieb take a bow for running the ACCC as an actual competition enforcement agency, drawing a line in the sand against the Transurban monopoly, Qantas and energy major EnergyAustralia for alleged misleading electricity price information just in the last few weeks alone.

The former trade practices lawyer together with enforcement boss Liza Carver and merger boss Steven Ridgeway are running the shop so well, some say the merger reforms demanded may not be necessary after all, because they are actually using the powers they already have.

Granted, getting a case to court is part of the challenge, actually winning it is another and the dream team has yet to be tested in court on its own cases so the final test remains.

But importantly they are establishing a reputation in the business community for being tough, no-nonsense operators of an enforcement agency.

Investment bankers like Barrenjoey, which is at least temporarily being denied success fees on the ANZ-Suncorp deal, and Transurban may not be so enamoured but Australian consumers are winning.

The lawyers in charge are also looking after their own because more clients need their comrades’ help.

Former Transurban boss Scott Charlton, who has neatly swapped from one monopoly to another with his Sydney Airport job, had always argued the toll road group had competition with the state roads, the state set the tolls and the competition was in the bidding.

The Victorian government has finally woken to the reality that bidding won’t be competitive against Transurban with 100 per cent of toll roads, and control of the toll e-tag system.

It and other state governments preferred to boast about big ticket auction sales for ports and other infrastructure, damning consumers to anti-competitive markets.

The only shame is it is the ACCC doing the dirty work for the short-sighted, weak politicians.

Next battleground is the private equity roll-up case in point, Woolworths’ acquisition of Petspiration, which trades under the brands of Pet Stock, Best Friends, My Petwarehouse, Pet City and Pet Stock Country.

Transurban and Horizon can seek an immediate test to the ACCC decision by proceeding with the sale and getting the ACCC to stop it in court.

Such games may eventually prove successful, but in case Richard Goyder (Qantas), Charlton, Shayne Elliott (ANZ) and Mark Collette (Energy Australia) haven’t realised it, the wheel has turned against Australia’s over-concentrated industry and there is a team in place willing to play the role of competition cop.

Green take over

This week the Ontario Teachers Pension Plan (OTPP) took 90 per cent control of Australia’s biggest carbon project developer by taking out KKR’s 36 per cent stake and other minorities in Green Collar.

The minorities included former PM Malcolm Turnbull and co-founders including Murray Bleach, Peter Salisbury and Lewis Tyndall.

Just how long Grant King stays as chair remains to be seen along with other board members like former ACF boss Mara Bun and Harris Farm’s Cathy Harris.

In December 2021 OTPP acquired a 36 per cent stake in Green Collar for $250mn valuing it at around $750m and this week’s deal pushed that value up slightly.

Remarkably Green Collar’s parent, Green Climate Pty Ltd, reported an $18.2m loss in the 2022 year and $15.2m in 2021 on revenues of $22.2m and $16.8m respectively.

So where does OTP get its $760m valuation? It must be based on hopes for growth and in particular for a better carbon price than the circa $31 a tonne this week, which compares with a low of $24 in July and a high in January last year of $58 a tonne.

Green Collar does have a wide group of projects including reef, biodiversity, water and plastic credits not included in these accounts.

KKR sold its 36 per cent stake for around $280m on top of the $100m earned when OTPP was first acquired plus dividends, so on any read a good return on the $100m investment in June 2020.

OTPP is more a long-term investor which should suit the Green Collar team which has served since 2008

One of the firm’s founders, chief executive James Schultz, sold down his sake from around 12 per cent to around 5 per cent which meant he pocketed around $50m.

The average payout for the 130 staff was around $350,000 with variation around seniority and length of service but a milestone in being a staff payday from a private equity sell down.

Green Collar operates by taking circa 30 per cent share of profits with its farmers but the accounts reveal some big ticket transactions like the $86.1m the unknown vendors of Terra Carbon (the vehicle used to register carbon credits) collected when it sold to Green Climate in the last couple of years.

The vendors probably included the aforementioned Schultz, his brother Jonathan and the other founders so more icing on the cake but again no comment when asked.

Staff costs for the 130 people employed were $18.6m last year up from $15.8m in 2021 for an annual stipend of $143,000.

Receipts from customers last year stood at $35.1 which at a $50 carbon price would be more like $56.6m which is a guide to the blue sky OTPP is looking at.

More to the point the deal is a major coup for Shultz and his team, underlining their professional ability and innovative skills and along the way the integrity of the Australian carbon system.

The firm declined comment on the numbers.

The key being with OTPP controlling 90 per cent-plus, Green Collar’s long planned overseas expansion should gather speed.

Major coup

Dr Phil Ireland at the Tiverton-owned Carbon Neutral have scored a major coup with its strategic partnership with the Save the Children Fund helping the giant NGO to assess the carbon footprint of its offices around the world, establish carbon projects and marketing the carbon credits.

The fund has projects on going in among other places Nepal, the Solomon Islands and Pakistan and the brief is to multiply these to help the fund’s carbon objectives.

Ireland said the work would build on its existing projects with indigenous carbon project partners and he has hired Dr Rebecca Pearse to help build its team on this major international expansion.

Carbon Neutral is best known for its work in the 21 hectare Yarra Yarra biodiversity corridor north of Perth where it has planted some 30 million trees.

Ireland, who made his name as founder of soil carbon measurement company Hone Carbon, joined Carbon Neutral earlier this year.

Australian-based Paul Ronalds runs Save the Children Global Ventures.

New tool

With ASIC now holding companies responsible for cyber breaches former McAfee executive Ian Yip has developed a new software tool to help companies keep track of their potential exposure to cyber hacks and comply with myriad government regulations to show how the company is handling its obligations.

The software-as-a-service company Avertro operates in the US and Australia.

A recent study has shown big companies have circa 20,000 different touch points with the internet which could be exploited by cyber criminals.