Anchorage exits NZ Burger King to Blackstone
It's a good time to be targeting turnarounds in Australasia. Private equity firms, hedge funds and investment banks are pursuing a host of opportunities in the consumer segment where companies have been hit hard by the seize-up in spending that followed the global financial crisis. The highest-profile rejuvenation to date has been at Colorado Group, the Affinity Equity Partners-backed Australian fashion retailer that into receivership in May but emerged last month under a new name.
In this context, Anchorage Capital Partners' exit from Antares Restaurant Group, which operates the Burger King franchise in New Zealand, might serve as a timely example of what happens when a turnaround works. The specialist private equity firm acquired the restaurant chain for NZ$46 million ($36.9 million) in 2009 and has now sold it on to The Blackstone Group in a deal believed to be worth NZ$150 million.
"We have generated a good return for our investors," Mark Bayliss, the Anchorage partner who served as chairman of Antares, tells AVCJ. "We go into underperforming businesses, fix them up and put them on a sustainable growth platform, and then we get out. A lot of our investments tend to be under three years. The Antares deal is a classic example of what we do."
The firm, which was set up in 2007 and is currently investing out of its A$200 million debut fund, targets assets that are likely to appeal to secondary or strategy investors.
According to Bayliss, Anchorage saw in Antares a strong brand and pathway to customers that was underinvested and not being run particularly well. Following the acquisition, the PE firm kept on two of the senior management and brought in two new executives, then set about reorganizing operations. Six restaurants were opened, taking the overall total to 75 nationwide, and existing outlets were refurbished.
In the past two years, revenue has grown from around NZ$150 million to NZ$161.6 million for the most recent financial year, while net profit came in at NZ$6.8 million. Several parties expressed an interest in buying Antares when Anchorage decided to exit.
"With quick-service restaurants, there's no silver bullet," Bayliss says. "It's a pretty simple process - you just have to do the right things at the right time."
Bayliss adds that Anchorage's specialist focus means it doesn't get caught up with events in the wider market. Nevertheless, Australia's fast food segment has seen two other PE exits in the last few months. In June, Archer Capital bought Quick Service Restaurant Holdings (QSRH) - which owns Red Rooster, Oporto and Chicken Treat - from Quadrant Private Equity for A$450 million. Pacific Equity Partners followed up in July with an IPO exit from KFC and Sizzler proprietor Collins Foods, raising A$201.8 million.
More on Australasia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.