Australia’s private equity market is not immune to the fundraising pressures playing out at the moment, but many have work to do this year before turning their attention to raising more capital – and that’s selling assets.
Most of the local firms still have funds, with quite a number of yet-to-be-sold assets, as the conditions were not quite right in 2023 to exit investments at the prices hoped for.
Deals like a sale of Ticketek owner TEG, a company owned by Silver Lake, are now on the cards for this year, as well as others like the sale of Journey Beyond and childcare businesses owned by Quadrant Private Equity (Affinity Education Group) and Partners Group (Guardian Early Leaning).
But take a look at what’s in the portfolios of well-known private equity funds in Australia, and one can only come to the conclusion that a fair bit of clearing the decks needs to be done this year.
Experts say that the volume of deals was reasonably strong for the $50m to $100m value in 2023 but anything north of $200m was harder to offload. Here’s what some of the funds still own:
Quadrant Private Equity
Founded in 1996 by Chris Hadley, Quadrant currently has companies such as Fitness and Lifestyle Group, AMart Furniture and auction house Grays Online on its books, along with RockPool Dining Group and Superior Food Services, which is slated for a sale this year.
RockPool and the gyms operations were hit hard by the Covid-19 pandemic.
So it’s a matter of Quadrant of getting them back in shape before offloading the operations.
All of the above Quadrant businesses, except Grays Online, may find their way on to the market in the coming 12 months, as could its snack food company, Rite Bite Group, which owns Darrell Lea.
Quadrant also has workwear company Jaybro which may find its way on to the market if a buyer is there.
BGH Capital
Quadrant’s rival BGH Capital was founded by top TPG Capital executives Ben Gray and Simon Harle and former Macquarie Group investment banking boss Robin Bishop in 2017.
It has been a big success in its fundraising efforts and has counted AustralianSuper as a big supporter. But it’s yet to land a big sale despite being awash with cash for spending.
Some industry experts believe its education business Navitas may come up for sale in 2024 as it capitalises on the return of international students to the Australia market after they were locked out during the Covid-19 pandemic.
Another asset is its dental care chain Abano.
Abano operates in the attractive healthcare sector, though the buyer universe is said to be smaller for dental care businesses.
CyberCX is a business BGH owns operating in the sought-after area of cyber security.
The primary healthcare business it purchased from Healius and renamed For Health may not be on offer for a while until more government funding support is offered to the GP industry.
Poultry producer Hazeldenes may get sold at some point soon.
BGH owns theme park and cinema owner Village Roadshow, and some believe that the logical deal is for it to sell the company’s cinema assets to Entertainment Ventures.
It also owns Laurent French Artisan Bakery.
Pacific Equity Partners
PEP, founded by Rickard Gardell, Paul McCullagh, Simon Pillar and Tim Sims in 1998, is now in fund raising mode after offloading quite a number of its businesses at the end of the pandemic and achieving top dollar.
It recently partially sold down INova as it did smart metering company Intellihub. It has only just recently purchased hospital operator HealtheCare.
Some think the asset most likely to come up for sale in its portfolio during 2024 will be Zenith Energy.
CPE Capital
CPE Capital, previously known as Champ Private Equity, was founded by Bill Ferris and Joe Skrzynski in 2014.
It has Civilmart Adventure Online, which some believe could be offloaded, and the Banksmeadow processing centre facility it purchased from Bingo Industries.
The firm is now run by John Haddock.
Adamantem
PEP spinoff Adamantem, founded in 2016 by former PEP executives Anthony Kerwick and Rob Koczkar, has assets such as New Zealand retirement business Heritage Lifecare; Hygain Holdings, which it has previously tried to sell; and the former laundry business of Spotless, Linen Services Australia.
It also recently purchased Boost Juice owner Retail Zoo.
Some market experts believe its New Zealand-based smallgoods company Hellers could come up for sale this year.
Allegro
Allegro’s Perth radiological healthcare business is expected to be put on the block this year, while another company it could sell is the after-school care operator Camp Australia.
Allegro also owns the former Toll Holdings business, renamed Team Global Express, UpEducation, Gull, Questas, Everest Foods, Terrex Seismic and drilling company JSW.
The fund, which typically targets turnaround opportunities, has been busy on the deal scene, making a bigger name for itself in 2023 by buying PwC’s government consulting arm.
It was founded in 2004 by Chester Moynihan and Adrian Loader.
Next Capital
Some observers believe Next Capital, founded in 2005 by ex-Macquarie executives John White, Sandy Lockhart and Patrick Elliott, could put up for sale its Funlab business, InterHealth Care or French bakery business Noisette.
It also owns Jucy, Enviropacific, Eptec, TM Insight, SilverChef and NZ Bus.
Anchorage Capital
After buying department store chain David Jones in 2022 and bidding for ARN Media, the Phil Cave, Daniel Wong and Michael Briggs-founded Anchorage appears to have plenty on its plate.
The firm, which has been going since 2007, owns Specialised Linen Services and Evolve Education, and both businesses at some stage will come up for sale.
The firm is expected to remain in buying mode during 2024, as the turnaround fund often targets distressed opportunities with a plan to add value.
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