Anacacia set for 5x return on Home Appliances investment
Anacacia Capital has agreed to sell its controlling stake in Australian cooking products supplier Home Appliances to McPherson’s for A$22 million. The private equity firm is expected to secure a 5x money multiple and an IRR of more than 90% once the deal closes by the end of March.
According to a regulatory filing by McPherson's, the transaction price represents 4.9x Home Appliances' 2012 EBITDA. Anacacia owns about 82% of Home Appliances and the deal has been structured so that company management retains the remaining equity for at least two years, after which they will have the option to convert their holdings into McPherson stock.
Anacacia first invested in Home Appliances in 2009, having established the company to acquire a controlling interest in Euromaid's appliances business. Through a combination of organic growth and the bolt-on acquisition of IAG Appliances, revenue has more than doubled during the holding period to around A$41.4 million in 2012. EBITDA came to A$5.5 million in 2012.
"It's great to see the returns from a very significant investment in new product development and increased employment in the business five-fold," said Jeremy Samuel, managing director at Anacacia. "The extra focus on our customers and sourcing the best quality affordable appliances has been fairly recognized by the market. It's been a great partnership with the founders and management team."
Anacacia reached a second close of A$125 million for its second fund in November. The private equity firm has already exceeded its target of A$100 million and is on course to reach the hard cap of A$150 million. The first investment out of the fund came in January with the acquisition of Hills Healthcare Equipment from its listed parent Hills Holdings.
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