Zenith Insurance Services, Dardanup Butchering Co, Austral Pool Solutions, Omni Dental and Forpark Australia were among numerous private WA companies to change hands late last year.
A flurry of private mergers and acquisitions late last year has boosted deal flow for Perth’s corporate advisers.
Research for Business News’ Data & Insights has unearthed details of numerous transactions that have not previously gained wide exposure.
Notable deals include pork producer Westpork acquiring a 50 per cent stake in 70-year old family business Dardanup Butchering Company in December.
Pendulum Group and law firm Corrs Chambers Westgarth advised Westpork while Argonaut and Steinepreis Paganin advised Dardanup.
Dardanup is one of two big pork processors in WA, along with Craig Mostyn Group subsidiary Linley Valley Pork.
Chief executive Mark Panizza said the transaction was designed to strengthen Dardanup’s position in the market as a processor, wholesaler and food service provider.
Westpork chairman Andrew Young said the partnership was good for agribusiness in WA and opened the door for Westpork to fully capitalise on a more integrated food supply model.
“After being a long-term supplier to DBC we will now have direct participation in its established processing, distribution, retail and food services businesses,” Mr Young said.
The acquisition adds to the recent expansion of Westpork, which is backed by the D'Orsogna smallgoods family.
Its revenue increased to $110 million in FY21, with its growth aided by the acquisition of additional farming properties, including at Pinjarra, Kojonup and Australind.
The deal came six months after Craig Mostyn Group substantially expanded its operations by moving to full ownership of beef and lamb processor V&V Walsh, which had the Amelia Park brand.
Corrs Chambers Westgarth also advised on the Craig Mostyn deal.
Partner Christian Owen said there are relatively few listed agribusiness and food companies in Australia, so it is not surprising the majority of M&A activity occurs in the private market.
“As ‘food security’ and ‘security of supply’ continues to remain a focus, we expect to continue to see the aggregation of assets in particular segments,” he said.
“This is particularly where the transactions see the acquirer gaining scale to better compete.”
Corrs was one of the most active law firms in the M&A market last year, with other private clients including Zenith Insurance Services and Austral Pool Solutions.
“We continue to see a strong interest in quality private businesses, particularly from foreign acquirers looking to build presence in the Australian market or transactions that effectively facilitate an exit for the businesses founders,” Mr Owen said.
“The run of recent aggregation activity in the insurance broking industry is a perfect example of this theme.”
Zenith was sold to global insurance broker Lockton after a structured sales process, which kicked off 21 years after the Perth firm was established by Kim Gilbert.
Lockton was advised by BDO and Clyde & Co.
It has absorbed Zenith’s transport and logistics teams while their health and community services teams are operating under the Lockton-Zenith brand.
Zenith was the second Perth-based insurance broker to change hands last year, after the July sale of SRG Group to London-based BMS Group.
SRG was advised by EY while BMS was advised by Deloitte and Ashurst.
Balcatta-based Austral Pool Solutions was acquired in November by Austrian water treatment company BWT Group.
Former owner Jon Richardson is continuing to run Austral, which is a major distributor of swimming pool and spa equipment.
It was BWT’s third Australian purchase in the space of 18 months after it bought two east coast firms.
Corrs advised on several other private M&A deals that have already been reported by Business News.
These include RJV’s purchase of competitor Buckby Contracting and Churchill Capital’s sale to France’s Sia Consulting.
South Perth firm Octavian Group was lead adviser on two business sales that closed late last year.
With law firm Squire Patton Boggs, it advised Omni Dental on its sale to Melbourne-based Curae Health.
The acquisition was for a total purchase price of $20 million.
It will comprise a combination of upfront cash, deferred consideration and the issue of scrip in Curae Health to Omni Dental’s shareholders, including director Lachlan Thompson.
The acquisition allows Curae to expand its business in custom-made prostheses and dental radiology to WA.
Octavian also advised playground equipment business Forpark Australia on its sale to national firm Rhinoplay, which is backed by private equity group Redwood North.
Forpark was founded in Perth 40 years ago and grown into Australia’s largest manufacturer of outdoor commercial playgrounds.
It will join forces with RhinoPlay, which is one of the larger indoor playground manufacturers in the country.
Redwood is understood to have paid in excess of $15 million for the company.
It marks the third acquisition in the sector by Sydney-based Redwood North, which typically invests in business with up to $8 million EBITDA.
These deals come after Octavian advised Perth-based e-waste recycler Total Green Recycling on its sale in May to national firm Scipher Technologies.
Octavian partner Michael Rovira said he saw strong inbound interest from east coast private equity and trade acquirers seeking exposure to the WA market.
“Despite headwinds in equity capital markets, private company valuations remain resilient for high-quality assets,” Mr Rovira said.
“We expect quality WA companies will continue to attract significant attention from domestic and international acquirers in 2023.”
Mr Rovira said Octavian’s pipeline of M&A deals was at an all-time high, with the firm continuing to expand the team in order to meet demand.
One of the recurring themes last year was of global firms pursuing acquisitions to gain a presence in the local market.
French consulting and engineering firm Egis purchased Calibre Group’s built environment division, which employs 400 people across Australia and New Zealand.
Egis was advised by Azure Capital, Deloitte and Norton Rose Fulbright while Calibre, which was established in Perth but is now headquartered in Sydney, was advised by Greenhill and Ashurst.
Canning Vale-based gasket and seals manufacturer Novus Sealing was another local firm to change hands last year.
It was bought by UK-based Flexitallic Group, with law firm King & Wood Mallesons advising on the deal.
ASX-listed companies have also been boosting their presence in WA.
Adelaide-based Kelsian Group, advised by BDO, spent $47 million purchasing bus company Horizons West, advised by Azure Capital and Corrs.
Melbourne-based Silk Logistics has agreed to outlay up to $31 million buying Fremantle Freight & Storage Group, advised by Ashurst.
FFS was established in 2000 and purchased by Gerhard and Isabel Liebenberg in 2009.
It had annual revenue of $29 million from its wharf cartage, warehousing and other port services.
For a full wrap-up on corporate finance deals during 2022, see the next edition of the Business News magazine, to be published on 16 January.
