Hastings Private Equity, established in 2001, is a leading Australian private equity manager with in excess of $240 million in funds under management.
Our focus is to lead investments in later stage management buy-out, buy-in, expansion and replacement capital transactions involving established Australian businesses with enterprise values ranging from $20 million to $150 million. Hastings Private Equity also participates in larger transactions as a co-investor.
The right chemistry between management teams and investors is critical to long-term value creation.
At Hastings, we strive to be:
- approachable - we are a small, friendly team who are readily obtainable and will listen to your ideas;
- responsive - we give prompt feedback and work efficiently to use everyone's time effectively;
- flexible - we work with management to create mutually beneficial investment solutions; and
- professional - we have a reputation for discretion and integrity in following through with commitments.
Whilst we are 'active' managers, we invest in management to run the business:
- we are professional investors, not owners;
- we support management in executing their ideas;
- our 'active' involvement is to work with management through Board representation;
- we bring new ideas to management through our prior experience; and
- we can facilitate acquisitions/financing through our business network and funding capability.
We are continually looking to invest in the management teams of businesses that:
- focus on shareholder value creation;
- have a proven history of performance;
- have fully developed products and an established customer base; and
- compete in a large market.
Management teams that we invest with typically use the capital for a variety of purposes, including:
- management buy-outs or buy-ins;
- expansion capital to fund growth plans;
- acquisition/roll-up strategies; and
- replacement capital for existing shareholders.
Our investment parameters include:
- the opportunity to invest $5 million-$30 million;
- minimum equity ownership of approximately 15 percent (with Board representation); and
- a clearly defined exit strategy.
We do not invest in businesses that are seed, start-up, greenfield or commercialisation ventures.
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At the time of Hastings' investment, MCS was the largest syndicator of direct property interests in Australia. MCS had delivered seven years of revenue and profit growth, and had over $850 million of assets under management in 16 retail property syndicates (comprising 34 shopping centres around Australia).
Hastings provided replacement capital, allowing management to sell down some of their ownership of MCS prior to fully exiting the business. During the investment time frame of two years, Hastings worked with MCS to improve its product offering through open-ended syndication, and facilitated the acquisitions of additional assets.
Hastings exited its investment in MCS in July 2003 via a trade sale of 100 percent of the management company to the ASX-listed Centro Properties Group. The acquisition established Centro as the second-largest owner and manager of shopping centres in Australia after Westfield. At the time of exit, MCS had grown to over A$1,500 million of assets under management in 20 retail syndicates.
Hastings commented that: 'The timing was right to exit this investment given the level of consolidation activity in the sector. The outcome is that HPEF unitholders received returns of approximately a 53 percent IRR and a money-multiple of 2.7 times the original investment.'
IPG is a manufacturer of industrial and agricultural stretch film with over $70 million in revenue derived from leading market positions in Australia and New Zealand. Prior to investment, IPG had invested over $20 million in research and development, securing worldwide patents in a proprietary technology that delivered a 'step-reduction' in the costs of manufacturing its products.
Having proven this technology and demonstrated success in converting customers to the new product, Hastings provided the capital to deploy the new technology throughout its manufacturing facilities. Hastings has assisted the company in licensing this intellectual property to a major worldwide US film manufacturer.
Natra is the leading supplier of automotive and industrial radiators and cooling systems in Australia and New Zealand, with over $70 million of annual revenue and 280 employees. The Natra Group includes:
- the Natrad franchise business, which has over 120 retail outlets around Australia and provides after-market radiator and air conditioning repairs to passenger and commercial vehicles;
- ACSA, the leading distributor of radiators, air conditioning systems and related parts for the Australian after-market;
- Air Radiators, the leading Australian original equipment supplier of radiators to the industrial market for on-highway vehicles and industrial applications; and
- National Radiators, the leading supplier of radiators to the NZ automotive and industrial after-market.
Management executed a well-developed growth strategy, which combined the continuation of organic growth initiatives and the pursuit of appropriate acquisitions.
Hastings was selected by management to provide equity funding and coordinate bank financing in a management buy-out of the business from its former parent, Austrim Nylex. Hastings then assisted management in executing four acquisitions (including that of K&J Industries).
Hastings exited its investment in Natra in late 2006. The terms of this transaction remain confidential but delivered strong returns for unitholders.
At the time of Hastings' investment, Craigcare was a leading private provider of nursing home and aged care services in Western Australia. John Gillett, a former senior executive with the Moran Health Care Group led the management buy-in with funding from Hastings.
Since completing the transaction in 2003, management have substantially improved the financial performance of the business and (with the assistance of Hastings) executed a major acquisition on the east coast. The acquisition enabled Craigcare to expand its portfolio to sixteen aged care facilities and in excess of 1,100 nursing home beds.
Hastings exited its investment in Craigcare in late 2006 achieving an IRR in excess of 27 percent.
In May 2005, Hastings completed an investment in Auscap Closures, a leading manufacturer of metal closures for the beverage market. Prior to investment, Melbourne based Auscap experienced several years of rapid growth as screw caps gained greater acceptance in the wine industry. Management demonstrated a clear strategy to continue Auscap's growth as screw caps further penetrated the wine market (replacing traditional cork closures).
Hastings was selected by the founding shareholders to provide replacement capital, strengthen the existing management team (via the introduction of two experienced management-buy-in candidates) and coordinate bank financing.
Hastings exited its investment in Auscap in January 2006 via a trade sale to Guala Closures S.p.A., a listed company on the Milan stock exchange. The terms of this transaction remain confidential but delivered strong returns for unitholders.
HPEF II completed an investment in Recovcorp Pty Ltd on 11 January 2007. Recovcorp is a scrap metal aggregation business and Hastings' initial investment funded the acquisition of two successful scrap metal trading businesses, Associated Metals in Victoria and Metropolitan Scrap in New South Wales.
The scrap metals industry is highly fragmented and the business' strategy is to grow ferrous and non-ferrous scrap volumes organically and by acquisition. The core businesses currently source scrap metal from a number of industrial suppliers and smaller scrap merchants. The scrap is aggregated and processed by Recovcorp prior to sale to domestic customers and export markets.
On 23 February 2007, Endeavour Learning Group (ELG) acquired the Australian College of Natural Medicine (ACNM). With a history spanning 30 years, ACNM is the largest national provider of for-profit higher education and vocational education and training services within the natural medicine and beauty sector. ACNM, which has campuses in Brisbane, the Gold Coast, Melbourne, Box Hill and Perth, is committed to expanding its delivery of natural medicine and beauty courses both in Australia and internationally.
ELG, the holding company for ACNM, is backed by Hastings Private Equity Fund II and a consortium of management shareholders. ELG's strategy is to expand its footprint in high growth sectors within the for profit education sector through a mix of organic growth initiatives and targeted acquisitions.
Shorko Australia, headquartered in Wodonga (Victoria), develops, manufactures and markets biaxially oriented polypropylene film (BOPP). Shorko markets its products in Australia, New Zealand and Asia for use in packaging film structures for both food and non-food use. Shorko's plant comprises two modern production lines and a state of the art vacuum metalliser. A wide range of films (transparent, voided, white opaque and metallised) are offered to customers.
In December 2005, Hastings Private Equity and a management consortium acquired Shorko from its German based parent, Treofan Group (one of the world's leading producers of high performance polypropylene film).
Hastings' investment was premised on the fact that, (i) Shorko has a strong position in the local BOPP market and is a leading supplier to major domestic manufacturers of consumer staple products (food and beverages) and, (ii) Shorko management are highly experienced professionals with a clear strategy to grow the business over the short to medium term.
G&S is a leading provider of specialist engineering, maintenance and construction services in Queensland. Established in 1995, the company is based in Mackay primarily servicing blue-chip coal mining operators in the Bowen Basin. G&S also provides engineering services to the sugar processing, energy, bulk materials handling and manufacturing industries.
G&S has experienced significant growth over the last three years driven largely by increasing global demand for energy, which has increased the working capital needs of the business.
Hastings was selected by management and shareholders to invest in G&S based on its experience and expertise in driving strategic and operational initiatives in mid-market companies, as well as its ability to fund the continuing growth of business.
Aegis is a Sydney based equity research house. Aegis provides independent research to predominantly wholesale clients including financial planning networks and share brokers. Research coverage includes equities, structured products and property.
Hastings was attracted to the Aegis business by (i) its track record of financial performance, (ii) its strong management team lead by the founder and major shareholder and, (iii) the growing regulatory requirements in the financial planning and retail broking sectors that underpin demand for quality, independent research.
NQR is a Melbourne based grocery clearance business. NQR is the market leading retailer of end-of-line and near best-before-date grocery products with more than 20 stores in metropolitan Melbourne and regional Victoria.
Hastings lead the buy-out of the NQR business in conjunction with specialty investment house Step Capital whose founders have significant experience in managing and growing Australian retail chains.
Hastings investment was predicated on NQR's leading position in the defensive grocery clearance market, the strength of the NQR brand and the opportunity to expand the store footprint.