A month after leaving shipbuilder Austal, former Alinta chief Bob Browning has set his sights on turning a moribund penny dreadful into a business powerhouse.
ASK new Australasia Consolidated chief executive Bob Browning to name a company anywhere that is comparable to the aspiring listed business development house and the usually effusive American is at a rare loss for words.
“I can’t,” he says after a pause. “And I think that’s what attracted me to it. This is really a unique model.”
The former Alinta boss, who made a shock exit from the helm of Henderson shipbuilder Austal late last month, this week surprised the local business community even more by agreeing to head a penny dreadful with ambitions of grandeur.
The former explorer aims to use its newfound executive clout to acquire assets in still-undetermined sectors with the potential to grow into a multi-billion dollar business.
The plan comes after Australasia chairman, mining dealmaker John Terpu, last month handed Azure Capital co-founder Mark Barnaba a blank piece of paper to identify a more attractive way forward.
That quickly led to the recruitment of a high-powered ‘advisory group’ that would be the envy of many top 100 companies, with Mr Barnaba recruiting former Woodside boss John Akehurst and US merchant banker John Willinge.
The team was rounded off this week with the appointment of Mr Browning and former Bain & Co partner and Perpetual executive Brian Plavsic as finance chief.
That firepower has enabled Australasia to pursue the approach that so piqued Mr Browning’s interest.
“So often you see little companies that have a great idea but maybe don’t have the breadth or depth of management, or just don’t have the skills or abilities to raise capital,” Mr Browning said.
“So this is a neat opportunity. We’ve got guys in this team who have been there and done that and are not really interested in looking for the job with the big base salary.
“It’s really about growing the equity from scratch.”
Fundamentally, Australasia is akin to an old-fashioned listed cashbox on the hunt for a suitable investment. But this vehicle is not so much cashed up, but ‘manned up’.
Investors are being asked to back management’s record of finding the right deals to create lasting value.
“Bob’s track record is obviously well known in building companies and Bryant has an exceptionally strong record in strategy, finance, finding assets, enhancing assets, integrating assets. And together, it’s our view that they make an exceptional team,” Mr Barnaba says.
So far investors have been welcoming, trebling Australasia’s share price since the advisory committee was announced last month.
Having only signed up last Friday, Mr Browning said it was it too early to state just which industries or businesses the group would target.
Acknowledging the new team’s strong background in the energy sector, Mr Browning conceded energy would be one of five or six industries the company would be eyeing.
Importantly, he said Australasia would not be like a private equity investor looking for a quick turn on its money.
“We are looking to hold on to these assets long term and build a sustainable organisation. There’s no interest in buying them, gutting them and selling them off again,” Mr Browning said.
But drill down a bit further, and Mr Browning recognises parallels with Alinta’s strategy of weaving together disparate but complementary businesses within a common industry or sector.
“What we are looking to do is acquire companies, weave them together to build scale and help them realise their full potential,” he said.
In his six years at Alinta, Mr Browning spent billions turning the sleepy former state gas utility into a diversified owner of pipeline, generation and energy retailing businesses before being taken over for $8 billion by Babcock & Brown and Singapore Power in 2007.
The takeover followed a controversial Macquarie-backed management buyout proposal championed by Mr Browning and then Alinta chairman John Poynton.
The so-called ‘takeover from within’ split the Perth business community over whether Alinta’s management was working for its shareholders. Ironically, Mr Akehurst was brought in to be a truly independent chairman and represent shareholders in responding to the management and B&B offers.
Though Alinta and shareholders thrived under Mr Browning, the massive debt burden taken on to fund the acquisition ultimately resulted in B&B’s collapse as the global financial crisis took hold.
Investors have since been left with near worthless scrip in a rump of the business, after Alinta was forced to offload assets to its major creditors.
Mr Browning said Australasia would be especially diligent in pursuing the optimum funding options for the assets it acquired.
“If it’s a more mature company that’s got strong cash flow, it would be able to wear a little bit of debt, or it may be a younger company that’s more pure equity. We’ll have to cross that bridge when we get to it,” he said.
He has little doubt about Australasia’s funding capacity, given the team’s proven record of delivering multi-billion dollar deals.
And five years from now, Mr Browning expects that business to be in the top three in its sector in Australia.
But the focus over the next three months will be on vetting a number of opportunities already identified with a view to making a move in the first half of next year.
“This isn’t going to sit like it is for very long, I can tell you,” Mr Browning said.
