CHAMP IV
CHAMP IV is a $1 Billion (target) mid market buyout fund, managed by Sydney, Australia headquartered CHAMP Private Equity Pty Ltd (“CHAMP”).
CHAMP has one of the most successful private equity track records in Australasia, with a history of principal investment dating back to 1987. Its core focus is on the Australian and New Zealand markets, but with an international reach extending into Asia and North America.
CHAMP has delivered top quartile results to its investors over its historical track record since 1987.
CHAMP is equally proud of its record of partnering with top flight management teams, and sharing the rewards of the success of developing portfolio companies with these teams. Over 280 investee company executives have made more than $1 million each from their equity participation alongside CHAMP in its portfolio companies to date.
The CHAMP group has offices in Sydney and Brisbane, Australia, and affiliated offices in Singapore and New York, giving it an unrivalled reach amongst Australian based peers. This allows it to identify both Australian and cross border investments, as well as seeking international growth opportunities for existing investee companies.
Since inception, CHAMP has invested across a broad range of sectors, including media, transport, industrial services, education, retail, agribusiness, health and financial services.
The investment philosophy at CHAMP is value creation through earnings growth. Prudent leverage is a factor in the business model, however, the real driver of value creation is sustainable earnings growth based on superior management and investment in growth initiatives.
CHAMP Founders, Bill Ferris and Joe Skrzynski, have been honoured with the inaugural Life Achievement Awards by both the Australian and Asian Private Equity industry associations.
CHAMP IV has completed ten investments to date; Pepperstone Group, Containerchain, Dutton Group, Straight Shipping, Gourmet Food Holdings, Jaybro Group, Panthera Finance, Cell Care, Marand Precision Engineering and Banksmeadow Recycling Tranfer Station
Pepperstone Group. During March 2016, CHAMP IV completed its first investment into Pepperstone Group a high growth online investment platform specialising in Foreign Exchange, commodities and Contract For Difference (CFD) products.
Founded in 2010, Pepperstone is headquartered in Melbourne with offices also in Shanghai and Dallas, providing 24 hour global coverage and client support to its over 26,000 active clients that currently trade more than $100 billion in Foreign exchange turnover monthly utilising Pepperstone’s platform.
With an automated proprietary back-office IT systems to enable operations, Pepperstone provides superior technology that uses low-latency execution and delivers low-cost spreads, resulting in exceptional customer service.
CHAMP invested in Pepperstone to assist it to expand internationally, grow the company’s branding efforts and widen its product offerings through partnerships with technology vendors in different regions.
Pepperstone’s CEO Owen Kerr stated in a press release “For Pepperstone to have the backing of one of Australia’s leading private equity firms as a significant investor and business partner is extremely exciting for us. We plan to continue taking the business to a much higher level in the years ahead and are excited for what the future holds for Pepperstone and ultimately, our clients. Our focus has always been on providing our clients a far superior trading experience than what is in the market today, whether that be our lower spreads, best in class execution or customer experience. We feel this investment will exponentially assist in achieving our goal of becoming the world’s number 1 FX Broker.”
Containerchain. On 31 August 2016 CHAMP IV invested in Containerchain, a business to business, web based technology software provider for the container logistics sector.
Containerchain’s technological solutions are tailored to the intricacies of the Landside, Dockside and Waterside needs of all participants in the industry including freight forwarders, importers, exporters, transport operators, empty container depots and shipping lines.
Containerchain was founded in 2007 after founder, Tony Paldano identified a need to improve container depot operations after noting a growing dysfunction in the Melbourne empty container industry. In March 2010, at a forum of leading industry bodies, it was unanimously agreed that there was an urgent need for technology to share information between transport operators and empty depots.
Counterchain’s software was subsequently installed at every Australian empty container depot with expanded operations to Singapore and Malaysia, where it is utilised at the Penang Port, the international gateway for the Northern region of Malaysia.
In 2012, Containerchain were recipients of the Technology and Innovation Award at the annual Australian Freight Industry Awards.
Dutton Group. During December 2016, CHAMP IV acquired 50% of Australia’s largest wholesaler of prestige used cars, Dutton Group from Morgan Sachs.
The company was first established in 1911 by Albert Octavius Dutton and was acquired in 2000 by business partners and BRW rich-listers George Nakas and Gavin Fernandez.
While the Dutton brand is known for its legacy of auto racing in Australia, Dutton Garage is known for its iconic showroom for best luxury, prestige, exotic and classic cars encompassing modern, sporting and historical classics. The dealership operates in the lucrative niche market of world classic cars which is populated by extremely wealthy collectors who scour the world for unique vehicles.
Dutton is Australia’s largest luxury car wholesaler with more than 40 buyers nationwide purchasing and selling cars internationally and trading nearly 12,000 prestige and luxury cars every year.
According to the Australian Financial Review, classic cars have been the No.1 performing luxury asset class over the past decade, with the value of rare and exotic vehicles rising nearly 20 per cent every year for the past 10 years.
On 2 May 2023, CPE Capital 8 announced that they had signed an agreement for the 100% sale of portfolio company Dutton Group to Sojitz Corporation, a listed Japanese conglomerate for a media reported $250 million.
CPE Capital 8 acquired Dutton Group in December 2016, which at the time was an Australia luxury car wholesaler with more than 40 buyers nationwide purchasing and selling cars internationally and trading nearly 12,000 prestige and luxury cars every year. CPE Capital’s investment supported Dutton Group’s ability to invest in new technology and systems, their expansion into new markets, including Melbourne and Brisbane, as well as supporting improvements in their customer service, branding and marketing. The sale of Dutton Group delivered another strong return to CPE Capital investors, including VPEG2. Following the completion of the sale, the net proceeds from this exit were distributed to investors, including VPEG2A and VPEG2B in May 2023.
Straight Shipping. On 6 December 2016, CHAMP IV acquired a group of New Zealand transport and shipping companies formally owned by New Zealand’s transport industry icon Jim Barker. The companies acquired included Strait Shipping (operator of the Bluebridge Cook Strait Ferry service), Freight Lines (road freight) and freight forwarding business, Streamline.
Strait Shipping has been moving freight between the North and South Islands of new Zealand since 1992 and diversified into the passenger market with the launch of the Bluebridge service in 2003. The founder Jim Barker established Strait Shipping after realising the need for a second ferry service to transport cattle during the late 1980s. The group is one of two service providers in the region and is accredited in the media with making “the most spectacular difference to New Zealand’s shipping industry”. Strait Shipping currently operates two ferries, the Straitsman and Strait Feronia.
Freight Lines was subsequently established in 1993 as a result of the market research conducted by Jim and Bev Barker whereby they identified the potential increase in demand in line haul, bulk and general freight. Freight Lines is a diversified logistic service provider providing clients with a complete end-to-end service and currently operates a fleet of 300 units that include company owned vehicles, owner drivers and sub-contractors.
Streamline Freight was founded in February 1989 and has consolidated its position to become a niche freight forwarder, specialising in the transportation of general goods, consumable and fragile products on behalf of its large customer base of commercial and industrial clients, operating a Nationwide Distribution System from Auckland throughout both islands.
During March 2022, CPE Capital 8 completed the sale of previously announced exit StraitNZ to Morgan Stanley Infrastructure Partners (MSIP) for a media reported $472 million.
Since CPEC’s investment in March 2017, the business has grown significantly, with shipping EBITDA 60% greater than it was at acquisition. The growth was driven by the successful implementation of a number of initiatives, including the successful transition from a family-owned business to an integrated logistics platform with new group management, group-wide StraitNZ branding and co-located national road freight operations. In addition, management performed a resetting of the cost base via an organisational restructuring and procurement program, as well as an extension of both 10-year port access contracts to 15 years in Wellington and 20 years in Picton (South Island). CPEC also drove the transition of 70% of shipping freight revenue to long-term contracts in order to stabilise revenue.
The exit delivered a top tier performing return to CPE Capital 8 investors, including VPEG2 across a 5.3 year investment hold period, with the proceeds of the exit being received by VPEG2 and distributed to all VPEG2 investors during May 2022.
Jaybro Group. On 12 December 2017, CHAMP IV acquired Jaybro Group a supplier of consumables in Australia and New Zealand, specialising in direct to site delivery for mid to large sized civil infrastructure and construction contractors. Jaybro was founded in Sydney in 1996 by Steve Joyce and with over 20 years of history, the business has established a reputation in the infrastructure consumables sector that has made it synonymous with quality, reliability and first class customer service.
Since the establishment of the Brisbane branch in 2010 (the first site outside of Sydney), the management of Jaybro have built the business through both organic and inorganic growth. Currently the company has four distribution centers and seven warehouse facilities across Australia & New Zealand. The introduction of world class systems, processes, people and a number of initiatives has made Jaybro a market leading infrastructure consumables supplier In Australia.
During February 2022, CPE Capital 8 completed the 100% sale of Jaybro to Quadrant Private Equity, a Sydney-based private equity firm investing in companies in Australia and New Zealand, for a media reported $650 million.
Since CPEC’s investment in December 2017, the business has grown significantly with EBITDA increasing 350% since initial investment. The growth was a result of the successful implementation of a number of initiatives driven by management, notably with the completion of 13 bolt-on acquisitions. This included the acquisition of Delnorth (Australia’s #1 manufacturer of road guideposts and rails). The acquisitions also allowed business performance to benefit from the increased penetration of key product groups within the existing customer base, along with cross-selling opportunities. As a result of this growth, employee numbers doubled from 170 to 310 and customer numbers increased from approximately 20,000 to 40,000 during CPEC’s period.
The exit delivers a robust return to CPE Capital Investors, including VPEG2 across a 4.3 year hold period, with the proceeds of the exit being received by VPEG2 and distributed to all VPEG2 investors during May 2022.
Panthera Finance. On 22 December 2017, CHAMP IV invested in Panthera Financial, Australia’s largest privately‐owned receivables management company. Founded in 2005 by brothers Matthew and Jamie Hough and headquartered in Brisbane, Panthera Finance is a debt ledger acquisition and debt collection company that buys receivables off the likes of the big four banks and utilities providers such as Telstra.
Banks are increasingly looking to sell receivables in an effort to lighten the load on their own balance sheets and release capital, and as a result, Panthera is expected to grow its business, to capitalise on these market dynamics.
Gourmet Food Holdings. During July 2018, CHAMP IV announced the acquisition of a majority share in Gourmet Food Holdings, a market leading Australian and New Zealand branded manufacturer and distributor of gourmet crackers and chilled packaged seafood.
Gourmet Food Holdings consists of a range of small up-market food companies, which include OB Finest a manufacturer of a large range of specialty crackers, such as Cranberry & Pumpkin Seed crackers and Olina’s Bakehouse, which also manufactures specialty artisan and wafer crackers.
The business also distributes sugar free biscuit maker Gullon and owns a stake in chilled packaged seafood brand Ocean Blue, which is known for small packages of salmon, smoked salmon, blue swimmer crab and other seafood products.
Gourmet Foods Group is expected to seek to grow its portfolio of brands in the future with a focus on premium entertaining food categories.
On 10 March 2021, CHAMP IV announced the trade sale of Gourmet Food Group to Mondelez International, a global packaged food business listed on the NASDAQ with a market capitalisation of US$75 billion.
Cell Care. During September 2018, The CHAMP IV Funds acquired a majority holding in Cellcare, the leading private umbilical cord blood and tissue storage bank in Australia and Canada. Cellcare is a consumer healthcare business collecting and storing cord blood. Cord blood is collected at birth from the umbilical cord, being used worldwide in over 40,000 transplants to date. The business has leading market positions in Australia and Canada and is one of the top 10 cord banks globally.
Given the stable underlying market drivers (i.e. births), strong market position in Australia and Canada and cash flow generation of the business, the investment has favourable inherent downside protection.
During June 2021 CPE Capital 8 announced the 100% sale of Cell Care for a media reported value of $200 million to Generate Life Sciences, the world’s largest provider of newborn stem cell services and reproductive tissue banks.
Since CPE Capital’s investment in Cell Care in October 2018, the company has experienced consistent growth in its financial performance, underpinned by the evolution and development of the Canadian annual storage model. The growth in CPEC’s investment value came from the successful implementation of several initiatives including:
- Implemented new hospital partnership agreements, particularly in Australia;
- Updated and optimised the pricing structure in Canada;
- Introduced new online marketing channels and increasing presence on social media;
- Successful early refinancing with returns of capital during CPEC’s ownership; and
- Developed a number of other future growth initiatives including: the public bank partnership, entry into the NZ market and a new placental storage business.
The sale of Cell Care represents a robust investment return and distribution for CPE Capital 8 investors, including VPEG2 across a 2.6 year investment hold period. VPEG2’s share of the net sale proceeds of Cell Care will be distributed to all VPEG2 investors upon the realised proceeds being received during the September 2021 quarter.
Marand Precision Engineering. On 12 June 2019, CHAMP IV signed an agreement to acquire a majority interest in Marand, a supplier of precision engineered solutions with key capabilities in the design and fabrication of aerostructures, tools and automated production systems for the aerospace and defence industries.
Founded in 1969 by Andy Ellul, Marand is the exclusive Australian and New Zealand agent for high quality off-the-shelf machine tools, industrial robots, testing, gauging and measurement equipment from leading international suppliers. The customer base of Marand is predominately multinational blue chip organisations including Lockheed Martin, Boeing, BAE Systems, BHP and Rio Tinto, for which it designs and manufactures complex innovative solutions.
Banksmeadow Recycling Transfer Station. On 24 September 2019, CHAMP IV was pleased to announce that they had signed an agreement to acquire a 100% interest in the Banksmeadow Recycling Transfer Station, from Bingo Industries Limited (ASX: BIN).
Bingo Industries Limited (BIN) is a waste management and recycling company operating predominantly in New South Wales. It is a vertically integrated waste management operator having capabilities across the waste collection, processing, separation and recycling components of the waste value chain.
The Banksmeadow facility is a building and demolition waste processing and transfer station located in Sydney’s inner eastern suburbs. This facility has the capacity to recycle up to 200,000 tonnes and collects construction and demolition waste in from around Sydney.
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