Deal-maker Wylie building up to private-equity buyout of a broken-up Boral

Investment banker John Wylie. Picture: Luis Enrique Ascui

Star investment banker-turned vocal shareholder John Wylie might be about to put his deal-making skills back to use, with suggestions the country’s largest building materials provider Boral is in his sights.

Since selling the Carnegie Wylie advisory firm he founded to Lazard and saying goodbye to investment banking, Mr Wylie has launched the Australian family office and investment and advisory firm Tanarra Capital.

Already, Tanarra has invested in consumer finance company Flexigroup, and GrainCorp, for which he publicly shared his advice for the country’s largest grain handler with its board about a break-up of the business.

But the latest speculation is that Mr Wylie is eager to raise funds for a break-up of Boral that would ultimately result in a private-equity buyout in parts.

Mr Wylie did not return a call to DataRoom to confirm the talk in the market about his intentions. Some remain sceptical that Mr Wylie, who chairs the Australian Sports Commission, would be successful with such a pursuit should it be in train, given that private equity has run the ruler over the iconic company in the past without launching an assault.

The expectation is that if a deal eventuates, it would be next year at the earliest. Yet it may be worth keeping a close eye on Boral’s share register in the coming weeks, given that Mr Wylie’s strategy is perceived to be one where he owns shares in a company and agitates from within.

As Margin Call reported in February, Mr Wylie has been raising funds to target companies with poor governance or dysfunctional operations to sit alongside other bespoke private equity and credit funds that his Tanarra already operates.

Boral, the country’s largest building materials provider, has been a point of frustration for shareholders over the years and recently its shares crashed by 20 per cent on the day it reported its results last month after warning of a bleak outlook for the current financial year.

One idea is that Mr Wylie could apply pressure on the company to demerge its US operations from those in Australia after they have continued to disappoint over the years, with some less than convinced about its $3.5bn acquisition of the Utah-based building products manufacturer Headwaters.

In the aftermath of the global financial crisis, it was its US bricks business that proved to be a disappointment.

Shares are trading well below their 2018 highs and now could be the perfect time for private equity to strike.

Australian industrial stocks are considered good value, with Australian institutional investors said to be currently selling out of high-growth stocks in the technology space and reinvesting in Australian industrial companies such as manufactures to capitalise on the lag in share prices due to what are currently soft economic conditions.