Next Capital exits NZ bus operator to Maori funds

NTHC will take a two thirds interest in the company with TGH holding the remainder, according to a Go Bus statement. The deal is expected to close at the end of September. Stuff.co.nz reported the purchase price as being NZ$170 million ($143 million).

Next Capital teamed up with Go Bus management to buy the company in 2012. AVCJ Research's records show that the consortium paid approximately $32 million for an 82% stake. The principal seller was Direct Capital, a New Zealand-based private equity firm that took a majority interest in Go Bus in 2007, facilitating an exit for the founding financial investor.

Go Bus claims to have a leading position in four of the six largest public transport markets in New Zealand - Hamilton, Napier, Tauranga and Christchurch - providing urban, school, special needs transport and charter bus services.

Next Capital was attracted by the company's competitive positioning as a low-cost, flexible bus operator, its experienced management team, pipeline of growth opportunities within New Zealand, and solid earnings stemming from long-term contracts with limited revenue and margin risks. Go Bus tends to work with government agencies on a long-term basis and is therefore not exposed to the cyclical intercity and tourist markets.

"Combined, TGH and ourselves have assets in excess of NZ$2 billion with a mandate for reinvestment and growth. Go Bus is the type of investment we seek - it's a well-run business in a sector we are comfortable with, and is led by an excellent team," NTHC CEO Mike Sang said in a statement. "Go Bus will enable us to further grow and diversify our portfolio in a way that is complementary to the rest of our investments."

NTHC is the investment company of a charitable trust run for the benefit of Ngai Tahu, the principal Maori tribe in the southern region of New Zealand.

It had total assets of NZ$968.7 million in 2013, up from NZ$747.8 million from the previous year. Property accounts for 43% of its holdings, with 18% in rural land, 8% in seafood and 9% in tourism. The remaining 22% is held by Ngai Tahu Capital, which targets equity investments in asset classes outside of those controlled by subsidiary operations.

TGH manages the commercial assets of the Waikato-Tainui people, a group of Maori living in the western central region of New Zealand's North Island. TGH and Waikato-Taninui Fisheries had NZ$738 million in assets at the end of 2013, up from NZ$694 million the previous year. Property and hotels make up more than 90% of the portfolio. There is a 1% private equity allocation.

NTHC and TGH were part of a consortium run by New Zealand fund manager Morrison & Co. that bid for Transpacific Industries Group's New Zealand waste management unit earlier this year. They lost out to Beijing Capital Group.

The Go Bus investment came from Next Capital's second fund, which closed at A$285 million ($264 million) in June 2009. The private equity firm also exited Discovery Holiday Parks in February alongside Allegro Funds and Macquarie Funds as Sunsuper raised its stake in the asset.

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• Topics
• Exits
• Australasia
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• Australia
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