Gull NZ, Golden Grove deals cap off 2016

The last 10 days of 2016 were a busy period for WA corporate deals, with the Rae family attracting a bumper price for its Gull New Zealand business, Chinese group MMG selling the Golden Grove mine, Diploma Group going into receivership and seven new listings on the ASX.

The largest WA-related deal over the past fortnight was the Rae family’s sale of its Gull New Zealand business to Caltex for $NZ340 million ($A325 million).

The deal, announced on 22 December, came six years after the Rae family, led by Fred Rae and his son Neil Rae, sold its Gull petrol business in Western Australia.

The sale was priced at 8.2 times the forecast underlying earnings (EBITDA) of the business for 2017, or 7.5 times after adjusting for expected synergies. 

The NZ business included an import fuel terminal, the largest of its type in the country, along with 77 retail sites and 22 supply sites, and accounted for five per cent of national transport fuel (petrol and diesel) sales.

By comparison, Gull’s WA business comprised 98 service station sites and a developing commercial fuels distribution business when it was sold.

The WA business was bought by Archer Capital-backed Ausfuel, which sold Gull (and two smaller businesses) to Puma Energy in 2013 for $625 million.

The Rae family was advised by Burswood-based accounting firm Banks Group while Caltex was advised by global investment bank UBS.

The Gull NZ sale was the second big Australasian petrol deal announced in late December.

Woolworths announced on 28 December the sale of its 527 fuel-convenience sites and 16 development sites across Australia to BP for $1.78 billion.

A major WA transaction late last year was MMG’s sale of its loss-making Golden Grove base metals mine in the Mid West to private equity group EMR Capital for $US210 million ($A290 million).

China-backed MMG commenced a sale process for Golden Grove last year and engaged with several potential buyers before striking a deal with EMR.

“The share sale, if approved, would form part of the company’s wider plan to optimise it mining asset portfolio,” MMG said in a statement issued on 30 December.

Golden Grove is a mid-sized zinc-copper mine, which incurred a net loss after tax of $US21.7 million in the 2015 financial year.

The deal re-established a link between Golden Grove and EMR executive chairman Own Hegarty, whose former company Oxiana was a prior owner of the mine.

MMG was advised by Goldman Sachs.

In the property sector, Diploma Group went into receivership after battling financial problems and legal disputes for most of the year.

Martin Jones and Andrew Smith of Ferrier Hodgson were appointed receivers & managers of ASX-listed Diploma Group and subsidiaries Diploma Constructions (WA) and DGX Construction on 21 December.

One day later, the company’s directors appointed three Grant Thornton partners as joint and several administrators.

The first meeting of creditors for the subsidiaries is scheduled for January 5, and one day later for the listed company.

Diploma Group’s major shareholder is the Di Latte family, which is reportedly planning a deed of company arrangement to restructure the group.

In more positive news, the last two weeks of 2016 saw a flurry of ASX listings, including several backdoor listings that had taken the better of a year to complete.

The listings included Doubleview-based real estate play Ausnet Financial Services, which raised $5.8 million as part of its reverse takeover of Namibian Copper.

Ausnet, which is led by Paul Niardone, is aiming to recruit 100 sales representatives in WA and 600 nationally.

Other backdoor listings completed late last year included three international tech plays that saw the ASX as an attractive market to raise capital.

These were US-focused Robo 3D (formerly Falcon Minerals), which is backed by Perth entrepreneur Tony Grist, Singapore-based IT firm Dropsuite (formerly Excalibur Mining Corporation) and Israel-focused nanotube tech play Ultracharge (formerly Lithex Resources).

Three WA-related IPOs were also completed in late December, with the largest being Panoramic Resources’ spin-out Horizon Gold, which raised $15 million.

Subiaco-based vanadium play Technology Metals Australia started trading after raising $4 million, while Israel-based tech play Dragontail Systems raised $6 million ahead of its listing.

The next WA listing is due this Friday, when Peter Malone-led Skin Elements is scheduled to start trading.

Skin Elements raised $3.7 million through its IPO and will use the proceeds to commercialise its Soleo Organics sunscreen product.

The Skin Elements prospectus said the company has invested $8 million in R&D in recent years.

The IPO followed several aborted attempts to list on the ASX, including through a reverse takeover of Minrex Resources announced in April 2014.