Australia’s Anacacia in healthcare MBO
Anacacia Capital has acquired Hills Healthcare Equipment from its Australian Securities Exchange-listed parent Hills Holdings through a management buyout. The value of the transaction was not disclosed.
According to a Hills regulatory filing, the asset has been bought by K Care, a vehicle owned by Anacacia and company management. The transaction is expected to be completed by the end of January.
Anacacia's investment will be channeled through its second fund, which reached a second close of A$125 million ($129 million) in November. It is expected to reach its hard cap of A$150 million. Jeremy Samuel, the PE firm's managing director, told AVCJ that he sees a lot of potential in the lower mid-market buyout space as several industry participants have graduated to larger fund sizes.
Fund II targets Australia-based small- and medium-sized enterprises (SMEs) with revenues of A$20-100 million and positive earnings. The plan is to make 12 investments over the 10-year life of the fund.
Ted Pretty, managing director at Hills Holdings, said the divestment is in line with broader restructuring initiatives. The company will continue to look for opportunities in the healthcare sector, but focus on areas that complement its electronics and communications business. As a manufacturer of assisted care equipment, Hills Healthcare was deemed to be non-core.
The business was part of its parent's lifestyle and sustainability division, which also incorporates home and garden equipment, technology services for the construction industry, solar-powered appliances, water and chemical tanks, auto components and plumbing products.
Hills Holdings reported a net profit of A$28.8 million for the 2012 financial year, having suffered a loss of A$73.1 million in 2011.
However, weakness in the construction sector continues to challenge the company. It announced in October that results for the first quarter of the current financial year would be likely be down 45% year-on-year. Underperforming and inefficient operations have subsequently been lined up for exit or closure in order to reduce costs.
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