CHAMP Ventures exits Australian Portable Buildings
CHAMP Ventures has agreed to sell Australian Portable Buildings (APB) to two Canadian companies, Black Diamond Group and Britco, for A$72.5 million ($75.2 million). The Australian private equity firm acquired a near 80% stake in the company in February 2007 for a reported A$12 million.
The transaction is expected to close in mid-January.
Black Diamond, a North America-focused remote lodging, modular building and energy services company, will pay A$41.1 million for a 90% stake in APB's modular rental business and 20% of its portable building manufacturing operation. Britco, a construction company that supplies Black Diamond, will take the remaining interests in each business for A$31.4 million.
CHAMP's investment in APB was a succession planning solution as the company founder, Rick Welch, was looking to retire. The private equity firm brought in Neville Katz as CEO and gave him and his management team a stake in the business. Black Diamond said that all key management will be retained.
When CHAMP got involved, APB had three sites in Sydney, Brisbane and Perth, manufacturing portable buildings for the construction, industrial, education and mining sectors. The company went on to extend its operations in Queensland and Western Australia, where the mining sector has a strong presence, and also set up a nationwide hire business.
According to The Wall Street Journal, revenue and earnings grew more than 3.5 times and 4 times, respectively, during CHAMP's ownership period.
APB's rental fleet now stands at 913 modular accommodation and workspace units, while its manufacturing operation spans 120,000 square meters across four sites. Approximately two thirds of the company's revenue comes from the mining and natural resources sector. On a geographical basis, 45% of its customers are in Western Australia, 33% in Queensland and 22% in New South Wales.
Revenue from rental and associated operations came to approximately A$12.6 million for the year ended June 2012 and Black Diamond expects similar EBITDA margins to those generated by its North American rental business. The company attached a value of A$6.9 million to its minority stake in the manufacturing operation.
Britco said the investment represents an excellent entry point into one of the world's largest markets for portable buildings. Britco and APB have similar product lines.
"We are excited about working with the strong management team at APB - the acquisition of APB gives Britco the ability to share experience and expertise across all parts of our operations and to serve our customers better," Mike Ridley, president of Britco, said in a statement.
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