Advent generates 2.5x on rationalization play

Advent bought the business in 2006 for an enterprise valuation of $109 million but subsequent attempts at a recap were unsuccessful. The GP responded by selling off the Screenex division - which produces screening media used in the iron ore and coal industries - to Germany's Schenk in 2008. The transaction wiped out the debt that supported the Locker buyout and then the company re-entered the screening business once the non-compete expired.

Advent's next step was to streamline the remaining operations. "We expanded into China, put in place a joint venture in India, closed a factory in Sydney and consolidated in Melbourne," Rupert Harrington, managing director at Advent, tells AVCJ. "There was new capital expenditure, new processes and systems. We sorted out what should be manufactured locally and what should be done offshore."

Locker, which produces perforated and expanded metal products used in industrial flooring and handrails, now has more than 300 employees across five manufacturing locations in Australia, New Zealand, India and China. Annual sales are approximately A$80 million.

A decade ago, the company ended its long tenure as an Australian subsidiary of a UK-listed Locker Group after the parent completed a takeover of one of its largest British rivals (although the deal was later unwound by competition regulators). The Australian management team bought the business, supported by a consortium of private investors. A single high net worth individual held a majority interest which was eventually sold to Advent in 2006 as the PE firm took an 80% stake.

Locker CEO Ed Sill has been a consistent presence and he will remain in place now the business is wholly-owned by Valmont.

Harrington notes that the US industrial infrastructure specialist was always top of the list when exit options came under serious consideration last year. "They had expressed interest previously and from our perspective we saw the most synergy between these two businesses," he says. "Locker has assets in China, India and Australia and Valmont wants to build a $1 billion presence in Asia."

Advent generated a 2.5x money multiple on its investment, the third exit in six months that has reaped a return of this magnitude or more. The GP has now returned most of the invested capital from its A$300 million fifth fund, with four investments still to be exited.

"Getting a 2.5x return for a manufacturing business in not the best of economic climates is pretty good," Harrington adds. "Locker is heavily exposed to the non-residential construction, which is pretty desperate right now, but management still increased sales and profit."

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• Topics
• Exits
• Industrials
• Australasia
• Exit
• Trade sale
• Australia
• Advent Private Capital
• manufacturing