Private equity fund Hawkesbridge has become a major shareholder in two of Western Australia’s most innovative new companies, Advanced Powder Technologies and Vitrostone.
Private equity fund Hawkesbridge has become a major shareholder in two of Western Australia’s most innovative new companies, Advanced Powder Technologies and Vitrostone.
Both companies have been through restructuring moves and raised additional capital in recent months.
APT – the company behind supermodel Megan Gale’s new suncare range – is moving towards a stockmarket float while Vitrostone, which is developing new building products, is regrouping following commercial setbacks earlier this year.
Hawkesbridge took on both investments from the WA Local Government Super Plan, which has effectively outsourced the management of its venture capital investments.
Hawkesbridge, chaired by Perth-based Christopher Rowe, has raised $15.5 million over the past year, with a further $3 million committed to a new, unnamed investment.
Its money has come primarily from the WA Local Government Super Plan and the Meat Industry Employees’ Superannuation Fund.
Hawkesbridge managing director Warren Riddell said the fund has invested directly and indirectly in nine companies, including four in Perth.
APT and Vitrostone are both spin-out companies from the University of WA based on nanotechnology research breakthroughs.
APT has achieved significant commercial milestones, with three product categories in the market, including its transparent sunscreen Zinclear.
Mr Riddell said it was still on track for a stockmarket float but declined to specify the timing.
Sydney broker KTM Capital has been appointed to manage the float and it also assisted the company to raise $2 million a couple of months ago.
APT’s business development manager Brian Innes said the company, which has raised $15 million over the past four years, now has nearly 20 staff between its Nedlands head office and Welshpool factory. He said the manufacturing plant was running two shifts a day and could soon move to 24-hour production.
As well as Hawkesbridge, its shareholders include UWA, South Korean company Samsung Corning and chairman Harold Clough.
Mr Clough’s family is also an investor in Vitrostone, which is much less advanced in its commercialisation than APT.
The company ran into some difficulties earlier this year and laid off staff but Mr Riddell said he conducted a thorough due diligence before investing in June and was positive about its prospects.
“The guys probably rushed some of their development stages to get to market quickly,” he said.
“The inherent technology is sound but you need to go through a process systematically to make sure the market has faith.”
Mr Riddell said Vitrostone was hoping to lock-in strategic alliances and licensing agreements.
“A key goal is to find a strategic partner who will help us.”
He anticipated the company, which has built a pilot plant at Neerabup north of Wanneroo, would earn its first income before the end of the year.
In the meantime, Hawkesbridge has committed to provide a further $1 million of funding, lifting its stake to 80 per cent.
Mr Riddell said the Local Government Super Plan’s original investment in Vitrostone, in the form of convertible notes, had been restructured.
The restructuring included removal of a cross guarantee with APT, which has helped to clear the way for that company’s float preparations.
Hawkesbridge’s other WA investments are ET Australia and Smarttrack, which has developed a tracking system using GPS and GPRS.
Mr Riddell said Smarttrack, whose anchor client is Boral, has been growing rapidly in Sydney.
It lifted turnover to $1.5 million last year and achieved a small profit.
ET Australia has developed a range of natural, environmentally friendly products that are being marketed in Europe and South-East Asia for use in agriculture, aquaculture, food hygiene and effluent treatment.
Its hygiene products, for instance, are designed to replace chemical detergents and are marketed as Ecogreen.
Hawkesbridge’s first investment ‘exit’ is likely to be Sydney-based Creatable Media, which is currently raising $9 million ahead of a stockmarket float.
Its business involves selling tabletops in food halls as advertising space.
