Champ acquires golding contractors
In March CHAMP Private Equity, along with existing Golding Management, acquired Queensland-based mining and civil infrastructure services company Golding Contractors Pty Ltd.
The acquisition price was undisclosed. However, total revenue will be over A$350 million per annum for Golding, with expected EBITDA of $50 million. The company specialises in mining and civil infrastructure services for the resources, transport and construction industries.
Golding Contractors, established in 1942 by Cyril Golding with a second-hand five-tonne Ford truck, now has five Queensland offices and 850 employees.
Labour costs hit record high
Wage and non-wage labour costs achieved new highs and the price index also rose to unprecedented levels during the December 2007 quarter, according to the Commonwealth Bank-ACCI Business Expectations Survey released in February.
Overall trading conditions remain sound and businesses continued to take on more staff, with the employment index only moderately down from the March 2007 all-time high. Continued strong employment is a likely indicator that other business improvements are offsetting wage increases.
Expected economic performance was down from September, as well as sales revenue and profits, however selling prices rose to help combat rising labour costs.
Deloitte predicts lower 2008 IPO activity
While the credit market crisis had limited impact on IPO activity in Australia in 2007, the same could not be predicted for 2008, according to the 2007 Deloitte IPO Report.
The late 2007 stock market dip left seven of the top ten IPOs in Australia trading below their issue price on 31 December. While the number of IPOs increased by 41 percent from 184 in 2006 to 260 in 2007, overall share price performance was weaker than previous years.
The average return for all IPOs in 2007 remained strong at 30 percent, boosted by exceptionally large gains from many small floats of resource exploration companies. However, the all-IPO average return was down from 53 percent in 2006.
Playford Capital exits online optimiser Maxamine
Australian seed investor Playford Capital recently sold its stake in website optimisation innovator Maxamine to global consulting giant Accenture. The deal closed on 15 February 2008 and terms were not disclosed.
Founded in Australia in 1997, Maxamine scans websites to identify implementation problems which undermine online marketing performance. The company is based in California, with R&D operations in Australia.
Playford Capital was the first professional investor in Maxamine and formed part of a unanimous shareholder agreement to sell off nearly all Maxamine’s assets. Playford Capital intends to use the money to fast-track other innovative South Australian companies.
New early-stage investment firm launches
A new venture capital firm was launched in February to focus on actively incubating and seeding early-stage businesses. Taking a very hands-on approach, RedFire Investments Limited will target early-stage high-growth opportunities in the eco-business, biotechnology and information technology sectors.
Dealing with very early-stage businesses, the RedFire team will support founders with the necessary business skills, allowing founders to focus on their project while the business model is developed and implemented.
RedFire has a varied portfolio of companies including an online debt collection tool, large sustainable energy projects and tissue and cell regeneration projects.
Staying ahead of Pacific power shift
On the back of overpowering evidence that economic superiority will shift from the Atlantic to the Pacific in the coming century, Griffith University’s Asia Institute has launched a new research program to help Australian businesses deal with the new economic power balance.
The Asia-Pacific Business Economic (APBE) Strategic Research program aims to prepare and educate businesses within Australia on the changes in demography, trade issues, and macroeconomic policy. The new program would help maintain Australia’s strong economic relationship with the Asia-Pacific region, now and as power shifts in coming years.
VC File: Emerging manager targets $80 million fund
By Adrian Herbert
Emerging manager OneVentures Pty Ltd plans to raise its first fund this year. The fund will target a final close of $80 million and a first close of $50 million. The OneVentures Innovation Fund will invest in early-stage technology companies.
Established in 2006 by successful IT entrepreneur Dr Michelle Deaker, OneVentures has now helped raise early-stage funds for three companies. Dr Deaker co-founded stored-value card business E Com Industries in 1988.
As joint chief executive and head of technology, she helped develop the business to annual revenues of $11 million. This included securing relationships with major retailers Coles and Woolworths and then with major banks. E Com was acquired by UK business Retail Decisions plc in December 2005 for $30 million cash.
Dr Deaker says the OneVentures fund will invest in small high-growth technology companies at the seed, start-up and early expansion stages across:
• New media – web 2.0, e-commerce, online advertising, computer animation entertainment, web portals and online communities
• Information technology and telecommunications (IT&T) – payments systems, mobile technologies, security, business process and productivity, IP convergence technologies, devices and components
• Clean technologies – energy efficiency, emission reduction, renewable energy, clean water
Based in St Leonards, Sydney, the manager plans to focus on investment opportunities along the eastern seaboard, north as far as Brisbane and west as far as Adelaide, primarily to enable the investment team to work closely with investee companies while containing operating costs.
Dr Deaker says she is looking for business concepts that have clear global expansion opportunities but also the capacity to first establish local revenue bases.
Current portfolio companies are:
• UK company Mi-Pay, offering secure financial transactions from mobile phones. After OneVentures helped raise early stage financing from Australian investors, Mi-Pay later closed a £1.8 million capital raising with a tier-one European Union VC.
• US company Datacastle, specialising in state-of-the-art data protection software for IT service providers and enterprises, allowing intervention-free, secure continuous data backup. OneVentures secured Series A funding for the company.
• US company AdGent 007 Inc., an online media company enabling online publishers to analyse the reader’s country of origin and provide advertising content accordingly. OneVentures provided seed capital, supported Series A negotiations and plays an ongoing advisory role.
This article has been extracted from Australian Private Equity Review. www.privateequitymedia.com.au