Current Investments
New Zealand Rental Group
In July 2006 Next Capital invested A$27 million to purchase 75% of New Zealand equipment rental and plant management services company Hirepool. The total transaction value was A$139 million.
Since acquisition, the business has increased earnings through:
- Employing over A$25m capital to fund eight bolt-on acquisitions across New Zealand, including strategic product diversification into trucks and commercial vehicle hire (Henderson Rentals), road barricade hire (Barricading Solutions) and generator retail (Power Plant Supplies) which have been earnings accretive;
- Completing two Greenfield initiatives, including the establishment of Hirepool Energy Division, a product extension into power rental services;
- Initiating internal control measures to reduce the cost base of the group, particularly around systems and extraction of synergies in capital procurement (in conjunction with Onsite); and
- Rebranding Hirepool as NZ Rental Group, reflecting the national presence and wide ranging products / services offered across the group.
New Zealand Rental Group is one of only two New Zealand rental companies with national coverage across the North and South Islands and shares a close partnership relationship with Onsite in Australia.
Visit the Hirepool website
Steelforce
Next Capital invested $35 million to acquire a 55.6% stake in Brisbane-based steel manufacturer and distributor SteelForce in July 2006. Established six years ago, SteelForce currently owns and operates a 120,000 tonne per annum steel pipe and tube manufacturing plant mill in Dalian, China.
The company also imports product from other South East Asian mills for distribution in the Australian market.
Since July 2006, the business has:
- established a second manufacturing line in Dalian increasing volume capacity by 90,000 tonnes per annum;
- established a trading division, sourcing imported product mainly from China;
- opened five Greenfield branches creating a national distribution network; and
- expanded the product lines to distribute a full range of structural, merchant bar and pipe and tube steel products.
Investment highlights include:
- an integrated business model generating margins at three levels;
- internationally competitive supply channel providing access to Australian standard pipe and tube;
- a rapidly evolving competitive landscape placing the company in a strong position to capitalise on opportunities; and
- capable managers with strong relationships and expertise within the steel industry.
Visit the Steelforce website
Vitaco
Vitaco is the coming together of two of Australasia’s leading health and well being wholesalers, Healtheries and Nutra-life. Combined Vitaco employs over 300 staff and has over 1,300 product lines.
In December 2006, Next Capital invested A$21million to acquire an 88.2% stake in Healtheries, one of Australasia's leading health food, functional beverage and supplement manufacturers and a recognised market leader in a number of categories.
In February 2007, Next Capital invested A$17 million to acquire Nutra-Life Health & Fitness, a New Zealand health supplements and sport nutrition company.
Investment highlights include:
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highly trusted and well-respected brands; -
leading market shares in New Zealand and Australia; -
high barriers to entry; -
scalable distribution networks; -
high cash flow generation with minimal capital expenditure requirements; -
inherent revenue growth opportunities within existing channels due to an ageing population and a trend towards prevention rather than cure; and -
an experienced and capable management team.
In addition to the stand alone attributes, the other significant opportunity is the benefit from combining the manufacturing operations of Healtheries and Nutra-Life, whilst keeping the market and brand positions of each organisation separate. As at September 30 over NZ$20m has been invested in upgrading and expanding the manufacturing and warehouse facility at Tamaki, where the Group’s head office is also now located.
Nutra-Life and Healtheries are wholly owned subsidiaries of Vitaco in which Next holds a 74% stake. Mike Thompson, the founder of Nutra-Life, holds a 19% stake and the management of Nutra-Life and Healtheries hold the balance.
Healtheries
Established in 1904, Healtheries exports products to more than 40 countries including Australia, the United Kingdom, China and Singapore. Approximately 90% of revenue is generated from Australiasia.
Its product range includes dietary supplements, herbal teas, sports nutrition (powders, bars and drinks under the Aussie Bodies brand), free-from, organic and healthy foods. Its products are distributed primarily through the grocery and route channels.
Visit the Healtheries New Zealand website
Visit the Healtheries Australia website
Nutra-Life
Established in 1967, Nutra-Life is a major supplier of products both in Australia and New Zealand and currently export to more than 20 countries.
Nutra-Life has strong manufacturing capabilities and established brands which occupy market leading positions in health food and pharmacy channel in NZ and in health food channels in Australia. As a leader in the Autralasian market for health supplements and sport nutrition, Nutra-Life is well positioned to capture the expected growth from changing lifestyle trends and increasing per capita income.
Visit the Nutralife website
Roll Press Group (RPG)
In June 2007, Next Capital invested $30.3m acquiring a 75.7% of the company at an EV of $92 million. RPG has been in operation for 60 years and is Australia’s only fully integrated steel processor undertaking plate procurement, profiling, pressing and rolling on behalf of its 1,600 customers.
In addition to steel processing the company is also an active supplier of steel towers for the wind farm industry, heavy fabrications and large diameter welded pipes for wharf and water infrastructure. RPG operates from Wacol and Richlands in Brisbane and Kilburn in Adelaide.
Funding raised as part of the transaction was applied to:
- Facilitate the exit of a number of passive shareholders;
- Allow 2 senior managers to realise part of their shareholding;
- Fund the complete acquisition of the Kilburn based Air Ride Wind (steel towers);
- invest in capital upgrades in steel processing and tube making; and
- Potentially acquire a competing tube manufacturer.
Investment highlights include:
- Exposure to high growth infrastructure spend in renewal energy, water and ports;
- Opportunity to lead further industry consolidation;
- Improved competitiveness by the selective investment in capital assets; and
- Strong operating cashflows over the short to medium term.
Visit the RPG website
Onsite In July 2007, Next Capital acquired two individual yet related businesses, Onsite Industrial Rentals Australia Pty Ltd ("OSIRA") and Onsite Australia Pty Ltd ("OSA") to form a national hire group specialising in commercial rental of access, scaffolding, portable buildings and portable toilets. Next Capital invested $25 million to acquire a 60% stake in the combined business.
Since acquisition, the business has:
- integrated the OSIRA and OSA businesses merging the back offices and extracting significant cost synergies under a group structure;
- completed a rebranding exercise across OSIRA and OSA under the Onsite brand;
- invested over $60m capital to fund expansionary growth opportunities across the country including four Greenfield branches in high growth mining areas in Queensland and WA;
- established generator hire as a third specialist division, initially as a greenfield operation which was subsequently bolstered by the acquisition of WASP, a specialist in diesel generator hire and sales based in Brisbane; and
- developed a strong partnership relationship with NZ Rental Group to facilitate synergies around capital procurement and implementation of best practice models between the companies.
Investment highlights include:
- Diversified product range provides a balanced portfolio with exposure to fast growing markets, particularly mining;
- recognised brand name with long standing customer relationships and strong supply arrangements with international access supplier (Genie); and
- geographic expansion prospects to generate national footprint in all states of Australia
Experienced, high quality management team
Visit the Onsite website
Independent Pub Group (IPG)
In September 2008, Next Capital invested $24.4m to acquire a 19.8% interest in the Independent Pub Group ("IPG"). IPG was established in 2007 to build a large scale diversified pub and retail liquor group over the next 2 - 3 years. Currently, the portfolio includes a mix of 19 freehold and leasehold venues across South Australia (12) and, Queensland (7). IPG is the sixth largest pub operator in Australia.
The portfolio will deliver balanced earnings across retail, food and beverage and gaming segments. IPG's experienced management team has been mandated to build a portfolio of venues. Investment highlights include:
- IPG owns a balanced portfolio with significant strategic value;
- IPG's portfolio was acquired at an attractive valuation, with favourable buying conditions expected to continue;
- IPG is managed by an experienced and proven team; and
- IPG's management team is focused on delivering a strong, relatively low risk earnings growth plan underpinned by stable market growth and identified operating and capital improvement opportunities
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