Australia’s CHAMP PE to buy Nuplex assets for $112m

Nuplex revealed last month that it was in talks with the PE firm about a potential deal. The company claims it was not actively seeking to divest the assets, but given they are increasingly non-core, when CHAMP made an offer it decided to proceed.

According to a regulatory filing, the assets - Nuplex Specialties and Masterbatch - will be transferred to a newly-created, CHAMP-controlled entity called Axieo. The transaction is expected to be completed by the end of 2014, with Nuplex using much of the proceeds to pay down debt.

Nuplex Specialties distributes raw materials, ingredients and specialty chemicals to customers in Australia and New Zealand. Masterbatch supplies colors used in plastics to manufacturers of plastic and packaging products, construction materials and piping, with a footprint that includes Vietnam as well as Australia and New Zealand.

The divestment will see Nuplex focus on its global resins business, which will account for 84% of sales. The company's geographical focus will also change, with more emphasis on emerging markets and less on Australia and New Zealand.

Nuplex reported a net profit of NZ$52 million ($41.5 million) for the 2014 financial year, up from NZ$45 million in 2013, while EBITDA was level at NZ$126 million. Revenue fell to NZ$1.64 billion from NZ$1.67 billion. Both Nuplex Specialties and Masterbatch struggled in 2014, with EBITDA of NZ$14.2 million, down 44.3% year-on-year.

The company's net debt to EBITDA is expected to fall from 1.8x to 0.8x as a result of the divestment.

This is CHAMP's first announced investment of 2014, not including bolt-on acquisitions by existing portfolio companies. The firm deployed in excess of $1 billion in 2012 and subsequently focused on digesting this deal flow. John Haddock, CHAMP's CEO, told AVCJ earlier this year that 2013 was "more portfolio company focused."

There have, however, been several exits this year, with Centric Wealth sold to Financial Index Wealth Accountants and LCR Group exited to Archer Capital. CHAMP also offloaded its remaining minority stake in Manassen Foods, having sold a 75% stake to China's Bright Food Group in 2011.

 

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• Topics
• Buyouts
• Australasia
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• CHAMP Private Equity
• buyout
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• Australia
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