Allegro fully exits Australia's TSC Group to Engie

TSC comprises the Australia-based Trilogy Building Services and Spectrum Fire and Security brands, and New Zealand-based Cowley Services, all of which belonged to the Hastie Group before the parent company entered receivership in 2012. Engie had previously bought a minority stake in TSC in 2013, the year after Allegro led a management buyout with Hastie Services CEO Roger Jowett.

While Engie initially held a stake of only about 20%, the company made its purchase with the goal of transitioning to full ownership over a period of time. Allegro Managing Director Chester Moynihan told AVCJ that Engie was satisfied enough with the direction of the company that it decided to accelerate the transition and assume full control earlier than planned.

"The view that Engie came to is that the turnaround had been completed, the business was stable and growing, so why go through a staged acquisition of the assets?" Moynihan said. "The commitment had been de-risked from their perspective, so why not just move to 100% ownership this year?"

The acquisition price for TSC has not been disclosed, but Moynihan indicated that it was between A$30 million and A$40 million ($21.6-28.8 million). This represents a 40% IRR, and a 2.4x return for Allegro over its three-year holding period.

Engie, which was known as GDF SUEZ until changing its name earlier this year, is based in France and provides energy generation services worldwide, with revenues of EUR74.7 billion ($84.4 billion) in 2014. The company plans to make TSC the core of its operations in Australia and New Zealand.

Allegro specializes in turning around distressed assets, having begun as an advisor before taking over as GP of a fund previously managed by ABN AMRO. Earlier this year it closed its second fund at A$180 million. Investments from this fund so far include the purchase of a controlling stake in New Zealand-based flooring retailer Carpet Court in July, and the takeover of Australia's Great Southern Rail in March.

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• Topics
• Australasia
• Infrastructure
• Exits
• Credit/Special Situations
• Buyout
• Australia
• New Zealand
• Allegro Funds
• energy
• Infrastructure
• Exit
• buyout
• Distressed