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CPE Capital

From today, Australasia’s pioneering and most experienced institutional private capital manager has refreshed and extended its brand to become CPE Capital, capturing the firm’s entire 32 year history under one name.

 

“As we work towards our 40th anniversary, CPE Capital is a name that embraces the firm’s full history.” CEO John Haddock said.

 

The firm was founded in 1987 by industry pioneers Bill Ferris AC and Joe Skrzynski AO as Australian Mezzanine Investments.  In 2000, a joint venture was entered into with Castle Harlan Inc from New York to form Castle Harlan Australian Mezzanine Partners, later referred to as CHAMP Private Equity.  Over the last five years the firm’s leadership has successfully transitioned to the next generation, a first of its kind in Australasia.  At this time it is also acknowledged that the prior arrangements with Castle Harlan and CHAMP Ventures have concluded.

 

This brand refresh highlights the firm’s unique 32 year history:

 

  • Net returns to investors on all exited deals have delivered a compound annual return of 21% pa, compared to the ASX All Ordinaries Accumulation Index return of 9.5% pa over the same period.

 

  • Ten landmark investments over this time have averaged a 6x return by turning ~$410m of investors’ equity into ~$2,520m of cash proceeds.

 

  • 289 millionaires have been created from former portfolio company executives who have invested alongside the firm.

 

“CPE Capital’s experience and performance over 32 years across all market cycles and aspects of the private capital business in Australasia is unique and a foundation for the delivery of future superior investment returns.”  CEO John Haddock said.

 

About CPE Capital

 

CPE Capital (“CPEC”) is Australasia’s most experienced private capital manager having been managing institutional private capital investments since 1987.  Over the last 32 years the firm has made 75 platform investments across eight funds through the deployment of A$3.8 billion in investor commitments.  Founded by industry pioneers Bill Ferris AC and Joe Skrzynski AO, since 2014 the firm has been managed by its next generation, making it Australasia’s first successful private equity leadership transition.

 

CPEC undertakes control buyout transactions, enters into founder partnerships and provides growth investments for mid-market companies in Australasia, including those which possess significant offshore operations or ambitions. 

 

CPEC’s long history of sustainable performance across all investment cycles is based on its ability to identify situations and opportunities that offer growth on a risk adjusted basis. 

 

Experience, flexibility, nimbleness and a specialist functional team structure are CPEC’s core attributes.

 

 

For media enquiries please contact:

Rob Dempsey

+61 419 888 831

+61 2 8248 8860

robdempsey@concordecorp.net

 

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CSR
On Thursday evening, the Garvan Institute of Medical research held its annual Researcher Awards. The awards provide important seed funding for innovative research ideas from outstanding early-mid career researchers.

At the event, Professor Marie Dziadek, Chief Scientific Officer at the Garvan Institute of Medical Research said: “Research prizes and awards funded by generous organisations provide great support for innovative science. They allow our researchers to push the boundaries and test ideas to support their applications for significant peer reviewed funding.

“We’re extremely grateful to CHAMP Private Equity, the Joseph Palmer Foundation and Ridley Corporation, who we’ve had long relationships with.” 

CHAMP’s Young Pioneer Award provides $10,000 in funding for initial experiments for an early-mid career researcher to test a new idea. Dr Nathan Zammit, from the Transplant Immunology Laboratory, received the 2019 award for ‘the TGN1412 trial, an immunological mystery’. The TGN1412 clinical trial tested a novel immunomodulatory drug, that began with great promise to treat autoimmunity and prevent rejection of transplanted organs. However, the trial abruptly ended after multi-organ failure was rapidly developed in the 6 healthy participants.

Dr Zammit has put forward a hypothesis for why this happened and why it was not predicted in pre-clinical testing. He will be able to test this hypothesis with the funding from this award.

CHAMP is pleased to continue its long-standing relationship with the Garvan Institute of Medical Research. 

Find out more about the 2019 Garvan Researcher Awards.
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Portfolio company announcement
Shelf Drilling, Ltd. (“Shelf Drilling” or the “Company”, OSE: SHLF) announced today that it has secured a three-year contract for the High Island V jack-up rig. This is a direct continuation of its current contract with the same customer.

The expected availability of the rig is now March 2022.

About Shelf Drilling

Shelf Drilling is a leading international shallow water offshore drilling contractor. It has rig operations across Middle East, Southeast Asia, India, West Africa and the Mediterranean. Shelf Drilling was founded in 2012 and has established itself as a leader within its industry through its fit-for-purpose strategy and close working relationship with industry leading clients. The company is incorporated under the laws of the Cayman Islands with corporate headquarters in Dubai, United Arab Emirates. The company is listed on the Oslo Stock Exchange under the ticker “SHLF”.

Additional information about Shelf Drilling can be found at www.shelfdrilling.com
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CPE Capital
Leading global supplier of precision engineered solutions, Marand Precision Engineering Pty Ltd (Marand), today announced that it had reached an agreement to sell the company to funds managed by CHAMP Private Equity (CHAMP). The terms of the transaction are confidential.
 

Marand supplies sophisticated engineering solutions to the defence, aerospace, rail, automotive and mining sectors. Its customer base is predominately multinational blue chip organisations including Lockheed Martin, Boeing, BAE Systems, BHP and Rio Tinto, for which it designs and manufactures complex innovative solutions.

“My father Andy Ellul founded Marand in 1969 and last week we were delighted to celebrate the company’s 50th anniversary,” said David Ellul, Executive Chairman of Marand.

“Over five decades, Marand has evolved from a machine tools and equipment supplier to the automotive industry to being recognised as Australia’s leading precision engineering company and Australia’s largest supplier into the F-35 Joint Strike Fighter program. We consider CHAMP a fantastic custodian of the business, who will help ensure Marand maintains its innovative culture and reaches its full potential.”

“While the terms of the transaction remain confidential, the Ellul family retains an investment in the business,” he said.

Rohan Stocker, CEO of Marand said, “This is a wonderful opportunity to facilitate further growth in the business. Marand’s innovative engineering, advanced manufacturing and sustainment capabilities will continue to add value to our customers and we are excited by the prospect of working with CHAMP to take the business to the next stage in its development”.

The CHAMP Group is one of Australia’s most experienced private equity managers, having first raised institutional capital more than 30 years ago. Since that time, CHAMP has made more than 90 investments and deployed more than A$3.7 billion in equity capital. CHAMP has one of the largest dedicated investment teams in the country. The investment will sit within the CHAMP IV Fund, alongside companies including Cell Care, Gourmet Food, StraitNZ and Dutton Garage.

The agreement is subject to regulatory and other customary approvals.

KPMG Corporate Finance acted as corporate advisers to Marand and the Ellul family, alongside Gadens Legal and Dobbyn and Carafa.

For further information on Marand, visit www.marand.com.au

Media Contact – Marand
Alex Lyon Marand
Business Development Manager
alex_lyon@marand.com.au
+61 417 384 223

Media Contact – CHAMP
Rob Dempsey 
robdempsey@concordecorp.net
+61 419 888 831
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Portfolio company announcement

Axieo is widely known as the distributor of choice for many of the worlds’ leading chemical, raw material and functional ingredient producers.


Not only do we represent the best suppliers through our agency and distribution business, we are also experts in our own right and we have a long and proven history of developing and manufacturing our own branded surfactants and esters.


To bring this portfolio to our customers and showcase our expertise, we proudly introduce Aximul – Axieo’s own brand emulsifiers. This is the first product group to launch under the Axieo Brands range.


Aximul emulsifiers consist of high quality, functional emulsifiers for various applications including:


  • Agriculture
  • Cleaning
  • Food
  • Personal
  • Mining

Our proven expertise in emulsifier chemistry is showcased in the strength, diversity and quality of the Aximul portfolio. We look forward to introducing you to our range over the coming months.


Find out more: www.axieo.com

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Portfolio company announcement
Axieo is proud to announce our ANZ partnership with Nascent Health Sciences – the World’s Number 1 manufacturer of Stevia. Stevia, a natural, plant derived intense sweetener, is used to reduce or replace sugar in food and beverage applications.

Nascent’s SoPure stevia range includes high purity extracts of the seven most abundant glycosides, including Reb A, C, D and M. Nascent are also uniquely positioned to offer Organic Certified Stevia to our market.

Sugar reduction is a global trend, attracting an increasing focus from health organisations, Government bodies and consumers. Axieo is excited to offer our clients solutions around calorie and cost reduction.

Our team are ready to offer formulation guidance and support across a range of applications including beverages, bakery, confectionery and desserts.

Find out more: www.axieo.com
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CPE Capital

CHAMP Private Equity took two divisions of Constellation Brands and turned them into a diversified portfolio of premium wine brands. It has secured a more than 5x money multiple for its efforts

In wine, companies get one chance a year for about six weeks when the grapes are harvested to make improvements to the production process. In the event of a bad vintage, brands with a reputation to maintain could have to wait two years before they can muster the quantity or quality they need.

The combination of lifestyle marketing potential and long-cycle agribusiness risk that characterizes this fragmented segment suggests an interesting private equity opportunity – but only for those who are sufficiently diligent about its cultural and operational nuances. This was the philosophy that underpinned CHAMP Private Equity’s investment in Australia-based Accolade Wines, which will be sold to The Carlyle Group for A$1 billion ($770 million). The GP is set for a more than 5x return on the deal.

Its strategy focused on leveraging the Australian wine industry’s unique overlaps between brand platform building capacity, primary production strengths, and competitive access to increasingly sophisticated Asian markets. John Haddock, CEO of CHAMP, describes the result as not only the centerpiece of its third fund, but the creation of a local champion. 

“I’m not sure that something of this scale or value-add has been done in Australian private equity,” he says. “This is a global company that’s based out of Australia making two-thirds of its earnings offshore, physically exporting nearly $400 million a year of product to 140 countries, and it’s in the top five consumer goods companies in its category. It talks to what private equity can do.”

CHAMP paid A$290 million for an 80% stake in the Australian and UK wine divisions of US-based Constellation Brands in 2010, fusing them into a single, capital-light acquisition platform under the Accolade banner. In addition to rejuvenating longstanding brands such as Hardys and Grant Burge, the portfolio was slanted toward more premium offerings and expanded to cover five continents.

Dividends delivered by organic growth, however, were a major factor in generating CHAMP’s ultimate return. Accolade experienced rapid earnings growth as hierarchical decisioning processes were streamlined and new management was introduced. In 2010, the company was revenue generating at only a break-even rate, but this was enough to allow the negotiation of asset-based debt packages with GE Capital that were the primary bolt-on financing mechanisms.

All the while, the winemaking families of Hardy and Burge have remained passionately involved in the stewardship of their namesake products. CHAMP sees these human-level commitments as the key to success in the wine game. Notably, part the Accolade turnaround included paying off a GBP40 million ($57 million) employee pension deficit in Constellation’s UK division.

“It’s a very personal product so you need to be careful in the way in which you go about the management of the business,” says Haddock. “The advice I provided Carlyle is that they’ll be most successful if they understand to some degree they’re a custodian of heritage assets for families and the wine industry in general.”

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CPE Capital, Portfolio company announcement
2018 AVCAL Annual Awards Recognise the Industry’s Best.

CHAMP Private Equity wins the award for the “Best Upper Mid-Cap Investment between $250 million and $500 million” for their investment in Accolade Wines.

At the industry’s 25th anniversary marquee annual event, the Australian Private Equity and Venture Capital Association Limited (AVCAL) handed out awards to a number of outstanding firms and industry leaders.

“The private capital investment industry in Australia plays a significant role in growing businesses, creating new jobs, and nurturing a more innovative and dynamic Australian economy, these awards recognise the contributions that make that happen, said AVCAL Chief Executive, Mr Yasser El-Ansary.

More than 450 of the private capital industry’s leaders are gathered at the annual AVCAL Conference this year, with the awards event concluding two days of thought-provoking discussion and debate about the big issues which will shape the future of Australia, and global financial services markets over the next decade.

“When you bring the power of our collective industry together, you see very clearly the potential for private capital investors to drive big shifts in the economy in areas such as energy, healthcare and data,” added Mr El-Ansary.

Award winners in a number of categories were celebrated at tonight’s event, including a number of special awards for industry pioneers who have played a role in growing private capital in Australia over the past 25 years.

“All of the award winners are leaders who have demonstrated exceptional investment execution strategy through the work they have done to grow and expand good businesses, transforming them into great businesses,” said Mr El-Ansary.
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CPE Capital, Portfolio company announcement

An agreement has been entered into between 80% shareholder, the CHAMP III Funds (CHAMP) and 20% shareholder, Constellation Brands, Inc. (Constellation) to sell 100% of their shareholdings in Accolade Wines (Accolade) to The Carlyle Group (Carlyle). The total consideration for the purchase is A$1 billion.

In early 2011 CHAMP acquired two separate divisions from Constellation for A$290 million and began the process of creating Accolade Wines. CHAMP Private Equity CEO Mr John Haddock said “We saw an opportunity, but the wine industry has long cycles so we knew we had to commit to a longer hold in order to realise that opportunity.”  

“The two divisions CHAMP acquired had separate strategies, separate management, operated out of Australia and the UK and were even on separate IT systems. Firstly, we had to bring the two divisions together to create one business.” Mr Haddock said.

More than seven years later under CHAMP’s stewardship Accolade is the largest producer of Australian wine, exporting to more than 140 countries, and one of the world’s leading wine companies. Accolade is a proud Australian success story deriving more than two thirds of its earnings offshore and with more than A$350 million in annual exports of Australian wine.

“We followed a deliberate strategy of creating a New World wine platform so that we now have wine making operations in Australia, New Zealand, South Africa, the United States and Chile, while also premiumising our local offering through the acquisitions of Grant Burge Wines and the Fine Wine Partners portfolio, which included brands such as St. Hallett, Petaluma and Croser.” Mr Haddock said.

CHAMP has also made significant investment in Accolade’s production facilities and following the completion next year of the new bottling and warehousing facility at Berri in South Australia, the company will have the largest bottling, packaging and distribution centres in both Europe (Accolade Park in the UK) and in the Southern Hemisphere to service all of its key markets.

CHAMP is proud of the work undertaken to both rejuvenate core brands like Hardys, which has been making wine for more than 160 years, and growing the brands that have been added to the portfolio. “I know Sir James and Bill Hardy are very pleased with the renewed trajectory that their family’s heritage brand is taking and since Accolade’s acquisition of Grant Burge, sales have increased by more than 80%.” Mr Haddock said.

Accolade is now a leading Australian based consumer goods company of a size and scale which puts it in the top five of its sector globally, with established assets, brands of special heritage and an export driven platform pointing towards Asia.

“Accolade represents the best of private equity ownership: taking the time to develop a business, investing in multiple areas of the business and orientating the company towards a growth opportunity that has many years ahead of it.”

“CHAMP is proud to have been the custodian of so many widely respected brands, to have contributed to the great Australian wine industry and to have added export value to Australia. We are very pleased that a global firm of such experience and capability as The Carlyle Group will now take Accolade forward.” Mr Haddock said.

About CHAMP Private Equity

The CHAMP Group is one of Australia’s most experienced private equity managers having first raised institutional capital more than 30 years ago. Since that time CHAMP has made more than 90 investments and deployed more than $3.5 billion in equity capital. CHAMP has one of the largest dedicated investment teams in the region and is currently investing the CHAMP IV Funds. Current CHAMP portfolio companies include: Pepperstone, Containerchain, Strait NZ, Dutton Garage, Jaybro, Axieo and Shelf Drilling.  

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CPE Capital

An agreement has been signed for the acquisition of a group of New Zealand transport and shipping companies owned by the Barker family, in keeping with the company founder’s wishes.

 

Strait Shipping (operator of the Bluebridge Cook Strait Ferry service) and Freight Lines, both founded by transport industry legend Jim Barker, as well as freight forwarding business Streamline, are being bought by funds managed by CHAMP Private Equity -­‐ it was announced today.

Strait Shipping managing director and Barker family spokesperson Sheryl Ellison says the sale represents the end of an era for the family and a very positive future for the businesses.

“We are extremely proud of these three leading New Zealand transport businesses and we are excited about their future under a new growth focused ownership.”

Ms Ellison says her father, Officer of the New Zealand Order of Merit Jim Barker, had been closely involved in the sale process up until his death in August.

“It was Dad’s vision that these businesses would continue to thrive, grow and lead New Zealand’s transport industry into the future and we’re confident that this sale will ensure this.”

CHAMP managing director Cameron Buchanan says his company is excited about the acquisition and future potential the three companies offer.

“We’re committed to building on the strong foundations the Barker family has created and growing these businesses for the benefit of not only investors but also the wider New Zealand freight and passenger transport markets.”

Mr Buchanan says the CHAMP team is looking forward to working with management of each of the businesses during coming months to firm up plans for future growth and expansion.

“We are future focused but we also recognise and respect the strong existing heritage of these companies.”

Settlement is expected to take place in the first quarter of 2017 subject to regulatory approval but for the meantime it will be business as usual for the three companies as they head into the peak summer travel and transport season.

The Barker family will retain ownership of Bulklines and Stocklines -­‐ which are not included in this sale.

Find out more: www.streamlinefreight.co.nz

ENDS


About CHAMP Private Equity

The CHAMP group manage approximately A$3 billion for private equity investments in Australasia. CHAMP  has  one  of  the  largest  private  equity  teams  in  the  region  and  is  one  of  the  most  experienced independent advisors to private equity funds in Australasia, having invested in over 83 companies during its 28 year history.


Media contact:


Barker Family

Wendy Pannett

0064 21 440 891


CHAMP Private Equity

Robert Dempsey

0061 2 9252 0200

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