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CPE Capital
ASDAM today announced the acquisitions of TAE Aerospace (“TAE”) and RUAG Australia, which join Marand and Levett as part of the ASDAM Group. ASDAM has established an industry leading Australian sovereign industrial capability in engineering, advanced manufacturing and sustainment across defence, aerospace and industrial markets.

Steve Sargent, Chairman of ASDAM, said, “Marand, Levett, TAE and RUAG Australia are all outstanding businesses in their own right. Their combination within ASDAM creates a leading Australian engineering and sustainment partner across aerospace and defence programs. ASDAM’s role is to provide continued access to capital and resources to build and grow Australian sovereign industrial capability.”

As part of the transaction, the current CEO of TAE Andrew Sanderson assumes the role of CEO of ASDAM and joins the Board of ASDAM. Rohan Stocker continues in his roles as the CEO of Marand and Levett and as an Executive Director on the ASDAM Board.

Andrew Sanderson, CEO of ASDAM said, “TAE and RUAG Australia’s focus on sustainment of aerospace and defence platforms will be highly complementary to the design, engineering and advanced manufacturing capabilities of Marand and Levett in the ASDAM Group. The expanded resources of the group will enable each of the businesses to invest and grow their capabilities to support our global defence, aerospace and industrial customers.”

ASDAM operates from 20 locations across Australia and the United States, and has approximately 1,000 employees. ASDAM is majority owned by funds managed by CPE Capital.


ENDS


About ASDAM

ASDAM is a leading sovereign defence, advanced manufacturing and sustainment company with operations in Australia and the United States. It provides end-to-end capability across design, engineering, manufacturing, assembly and sustainment. ASDAM services a number of defence and non-defence programs, and has long term relationships with governments, defence prime contractors and other industrial customers. It is Australia’s largest supplier to the F-35 Joint Strike Fighter Program. Select customers include Lockheed Martin, BAE Systems, Honeywell, Pratt & Whitney and BHP. ASDAM is majority owned by funds managed by CPE Capital.

About TAE Aerospace and RUAG Australia

TAE is Australia’s largest engine maintenance, repair & overhaul (“MRO”) provider and the operator of the only F-35 Joint Strike Fighter engine MRO facility in Asia Pacific. TAE services engines for both commercial clients and global and local defence programs, including the Abrams tank for the Australian Army and the Super Hornet for the Royal Australian Air Force.

RUAG Australia provides MRO, aerostructures manufacturing, engineering, additive technology and surface treatment solutions for defence and non-defence customers. It has been designated by the US Joint Program Office as the sustainment and support provider for a number of components on the F-35 Joint Strike Fighter in the Asia Pacific region.












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CPE Capital
When Todd Wilson joined several friends from the corporate world in 2010 to form Gourmet Food Holdings, they were spurred on by what they saw as a gap in the market. “Product innovation was not occurring and retailers needed a new entrant to fill their demand for packaged seafood,” he explained. “We started Ocean Blue with Woolworths and Costco as our founding customers. It was important to us to operate in premium foods. We didn’t want to be in commodities, we wanted high-value, high growth, on-trend categories.”

It went very well, but it was tough at the beginning. “We had everything on the line. By 2018 when CPE Capital joined the share registry, we had 84 equipment finance leases in place, and a lot of liability and personal guarantees on the table. We had also struck a healthy deal with an international bank that funded our working capital. The launch of a second business in 2015 – producing premium entertaining crackers under the OB finest and Olina’s Bakehouse brands – was paid for with a working capital facility. We had a really good relationship with the bank because they funded business number one and had seen our track record.”

Todd says both companies were making profits within the first three to four months of trading. “We were very frugal on costs, our infrastructure was low-tech and we took a very commercial approach. We never sought to get ahead of ourselves and remained solely focused on products that returned a maximum margin.” The partners shared the profits, taking their first dividends from Ocean Blue in 2013-14 and in 2017 from the cracker business.

By the time CPE Capital came along however, a big chunk of capital was required. “We needed a greenfield manufacturing site, which was a $25m-$30m commitment, and the risk appetite of the shareholder group was different,” Todd explained. “While some shareholders were up for it, others were fairly nervous. We thought it was a good time to see how we could fund it properly.”

The partners took external advice. “I wasn’t sure I wanted to work with private equity, but we had built a very strong relationship with CPE Capital and it became evident early in the process that we could partner with these guys. Business is done across the table, eye-balling each other – trust and integrity and those types of things. That’s really important to us and I felt we could have that with these guys. They understood our model and were there to support us. They had a track record in food, could bring merger and acquisition expertise, provide external advice and knew about the exit process. It would be useful to have people outside our business and industry to check with, receive advice from and who could provide a level of governance.”

Others were interested too, but CPE Capital won because the partners believed they could work together. Todd liked the team. “I felt we were aligned,” he said. CPE Capital was keen to keep the founders motivated and economically involved. It took 70 per cent of the equity, paying a healthy amount of cash to the founders and leaving them with a combined 30 per cent. The founders were also aligned with CPE Capital on the future growth plan and reinvested in the business to demonstrate their commitment.

CPE Capital’s managing director Cameron Buchanan explains: “Todd took me through the history of what had been created. What interested me most was the thinking that had gone into the categories they had entered, targeting premium, high value, high growth. We had experience with branded foods, selling into retail, so we understood what they needed. A lot of people will say Coles and Woolworths are tough customers. They are if you are not delivering any innovation, good category margins and leveraging growth. But, this was a group with a significant amount of knowledge, a track record in the corporate world and that had created two market leading businesses. First and foremost, I was impressed by the people and the thinking that had gone into the business. We had to make sure Todd and his founders were still very much motivated and economically involved.

“By the time we all signed on the dotted line in July 2018, we had a really clear plan. It was to continue giving the business the resources needed to deliver new product development. The business was capacity constrained, so we allocated $20m-plus of capital to build a world class manufacturing facility and develop an export channel. We had designs on building a food service distribution channel, but the guys did such a good job on the export and grocery business that we didn’t need to get to the wholesale part of the plan.”

The partnership between Todd, his partners and CPE Capital lasted three years. A time frame for the exit was set at the start, although it came a little earlier than originally anticipated. CPE Capital had achieved what they set out to deliver in their growth plan for Gourmet Food. The new manufacturing plant was built, but with a larger capital outlay that enabled a number of additional product lines. The business had established category leading positions in premium grocery and deli crackers, health and chilled packaged seafood. New export markets, including New Zealand, North America, Asia and the UK were developed. The business was also supported by a strong management team, and sales and back-office function. The time was right to sell to what they had always hoped would be a significant trader buyer. It was.

With brands including Cadbury, Toblerone and Oreo, Mondelez is a US-domiciled, global snacks business, which says its purpose is to “empower people to snack right”. It sets out to “lead the future of snacking” by offering the right snack, for the right moment, made the right way. Todd still sits on an advisory board which manages the Gourmet Food business. They call him when they need to. “We put in a good quality management team under me and the other founders before the exit. Those guys have rolled with the business. My COO is now the MD. Mondelez promoted him, and I am there to support them.”

This article was first published by the Australian Investment Council.
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CPE Capital
Dippers is a modified Nippers and surf education program that is open to all ages and abilities. The program was developed by Autism Swim (AS) and is run in collaboration with local Surf Life Saving Clubs (SLSC). The SLSC’s have a proven track record in water education and provide some of the volunteers needed to run a safe program.

 

The Dippers program is now in its 5th year and has expanded from its original location, Bondi, to five sites across New South Wales and one in Queensland:


  • Bronte
  • Coogee
  • Bondi
  • Port Macquarie

 

CPE Capital is pleased to support Autism Swim for the 3rd year running. Together with other partners, this support enables AS to run the program during summer.


About Autism Swim

 

Autism Swim is an  international charity, focused on wandering and drowning prevention for those who have Autism Spectrum Disorder (ASD) and other abilities. AS is the only certifying body in the world specific to ASD and aquatics. It also runs the award-nominated, modified nippers and surf education program, Dippers.

Find out about other programs CPE Capital supports

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CPE Capital, Portfolio Company Announcement

CPE Capital (CPEC) has sold Cell Care to Generate Life Sciences, the world’s largest provider of newborn stem cell services and reproductive tissue banks.

 

During CPEC’s 2.5 year investment, Cell Care experienced consistent growth in EBITDA, including through the COVID-19 pandemic. The growth in CPEC’s equity value came from the successful implementation of several initiatives, including:

 

  • Entering into new hospital partnership agreements, particularly in Australia; 
  • Introducing new online marketing channels and increasing presence on social media;
  • Updating and optimising the pricing structure in Canada; and
  • Developing a number of other future growth initiatives including: the public bank partnership, entry into the NZ market and a new placental storage business.

 

This exit continues the CPEC 8 Fund’s strong momentum, following April’s sale of Gourmet Food Holdings.

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CPE Capital, Portfolio Company Announcement

CPE Capital (CPEC) has sold its 100% interest in Gourmet Food Group (GFG) to Mondelez International. The global packaged food business, which is listed on the NASDAQ with a market capitalisation of US$75 billion, purchased GFG for A$454 million. 

In less than three years under our ownership, GFG grew EBITDA organically from A$17m to A$41m. This growth has come from the successful implementation of several initiatives, including:

  • new product development and category expansion;
  • doubling manufacturing capacity;
  • doubling of employees, with several key operational and finance hires, including COO and CFO;
  • significantly improved OH&S compliance procedures and financial reporting; and
  • material reductions in energy emissions.


CPEC looks forward to watching the continued success of the Gourmet Food brands under the ownership of Mondelez International.

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CPE Capital
 

Winner of the 2019 CPE Capital Young Pioneer Award (The Award), Dr Nathan Zammit, has been internationally recognised for his work in medical immunology.

 

The Award provides important seed funding for innovative research ideas from outstanding early-mid career researchers.

 

Dr Zammit used this funding to understand how complex environmental cues shape the immune response and disease outcomes, with his findings supporting the importance of considering environmental impacts when investigating human disease and immune reactions.

 

The mouse model established in Dr Zammit’s work has already been applied to research which aims to understand the effect of individual drugs or gene variants on human health.

 

According to Dr Zammit, the model will be a vital resource for The Garvan Institute of Medical Research

 

“As we have witnessed this year by the COVID-19 pandemic, patient outcomes can differ widely based on personal history that is molded by environment, genetics, and age, underlining the importance of our research,” Dr Zammit said.

 

Dr Zammit’s work has received international recognition, and has resulted in his recruitment to Harvard Medical School, where he’ll take a postdoctoral research position in January 2021.

 

CPE Capital has been supporting the Young Pioneer Award since 2014.

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CPE Capital
 

Children with autism are 160 times more likely to drown than their peers but local program, Dippers, is helping to change that.

 

Dippers is a surf education program (a modified Nippers) that has been developed and run by Autism Swim, an organisation founded on the belief that everyone has the right to survive and thrive in the water. The program is run in collaboration with local Surf Life Saving Clubs and is open to all ages and abilities.

 

CPE Capital is pleased to have been able to support Autism Swim to run its program this summer.

The Dippers program is in its fourth year. The program provides vital water skills to those who may otherwise not have the opportunity. Each participant is supported in a 2:1 or 3:1 capacity and has the opportunity to work toward their individual goals. These may include putting their face in the water, riding a board, learning when to go over or under a wave or  the ability to interact socially with others.

About Autism Swim

Autism Swim is an  international charity, focused on wandering and drowning prevention for those who have Autism Spectrum Disorder (ASD) and other abilities.


Find out about other programs CPE Capital supports

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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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CPE Capital
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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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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