was a clear example of this strategy in the past year. Stable founder‑led businesses where new products can be introduced or rebranded may also be of interest to PE bidders, particularly if those products can be introduced or scaled in Asia. The acquisition of The Real Pet Food Company for $1 billion by an Asia‑based consortium comprising Hosen, New Hope and Temasek from Quadrant is one such recent example of an international rollout strategy predicated on changing consumer behaviour in China. HEALTHCARE CONSUMER & RETAIL Major trends in 2019 1 ACTIVE PUBLIC‑TO‑PRIVATE MARKET BUILDING BROADER MOMENTUM Public M&A activity in 2018 was particularly active , driven by acquisitive companies seeking growth through acquisitions and divestments and favourable macroeconomic factors in both Australia and abroad. Public deals involving PE acquirers accounted for approximately 30 per cent of all completed deals valued at $50 million or above, which is broadly consistent with public‑to‑private transactions ( P2P ) activity levels in the US and Europe. Given the limited number of opportunities for non‑listed assets, and the risk of overpaying for assets in fiercely competitive auction processes, there is ample evidence to suggest that PE bidders will continue in 2019 to pursue listed assets that are trading at reasonable or attractive valuations. 2018 started off promisingly , with the announcement of the acquisition of troubled retailer Billabong International by Oaktree Capital Management (via its portfolio company, Boardriders, Inc), combining the iconic surf wear brand with Oaktree’s Quicksilver and Roxy, in an attempt to improve dwindling EBITDA margins and create a more competitive global retail player. Pacific Equity Partners, which has had success with listed targets in the past, acquired Lifehealthcare, the second time the business has come under PE ownership. The strategy of rolling out businesses with strategic intellectual property assets and brands into mainland China remains popular, with the acquisition of Sirtex Medical by Beijing‑based CDH Investments, and the ROC Capital/Wattle Holl scheme of arrangement for Capilano Honey. Transactions that remain on foot include the proposed acquisition of Greencross by TPG Capital, the proposed acquisition of education business Navitas by a BGH Capital‑led consortium, and the proposed acquisition of MYOB by KKR. Interestingly, in the case of MYOB, the business has been under PE ownership on three separate occasions in recent years, again demonstrating the fiercely competitive landscape in the Australian market. The proposed take‑private of private hospital operator Healthscope Limited has resulted in a contest between the PE arm of Brookfield who has entered into an implementation agreement with the company, and Australia’s largest PE fund, BGH Capital. Again, it appears likely that Healthscope will return to PE ownership, having previously been owned by TPG Capital.
- Fall '18
- Pacific Equity Partners