Major British private equity firm First Reserve Corporation is to acquire a controlling interest in unlisted Calibre Global in a move to significantly enhance the Perth engineering group's growth plans.
International private equity firm First Reserve Corporation is to acquire a controlling interest in unlisted Calibre Global in a move to significantly enhance the Perth engineering group's growth plans.
Greenwich-based First Reserve is one of the world's largest private equity investors specialising in the resources and energy sectors.
Calibre did not specify how much of the company would be acquired by First Reserve, or at what price, other than to say it would buy a majority interest, but it's believed to be acquiring a stake of at least 75 per cent.
Brisbane-based investment firm Connect Resource Services will also acquire a direct interest in the company as part of the transaction.
Calibre founder Ray Munro will retain a significant stake in Calibre following the transaction, and will remain executive chairman, while managing director Rod Baxter will retain his role at the helm. Both men will remain on the Calibre board. First Reserve will appoint two new directors to the Calibre board while CRS will appoint three.
The move comes almost a year after Mr Baxter, the former Consolidated Minerals chief, took over as managing director of the privately-owned Calibre, one of Australia's leading and fastest growing engineering service providers to the resources sector, with a brief to chart its next phase of growth.
Calibre's list of resources and infrastructure projects completed or underway totals some $18 billion, including most heavy rail development in the Pilbara since 2005.
Mr Baxter said First Reserve and CRS were "fully committed" to accelerating Calibre's growth strategy, and would build on its core strengths in iron ore and rail infrastructure with further bulk commodity and geographic diversification.
"We are delighted to have attracted such strategic and supportive investors as First Reserve and Connect Resource Services," he said.
"We see a very complementary and value accretive fit with this deal, which will enable us to pursue our growth and acquisition strategy while retaining our absolute commitment to excellence in project delivery. We also expect that it will increase career development opportunities for our people."
First Reserve chief Alex Krueger said Calibre represented an opportunity to pursue growth in the bulk commodities sector, both organically and through acquisition.
"We can bring both capital and contacts to a business that is very well positioned to benefit from the long term growth fundamentals in the resources and infrastructure sector," he said.
First Reserve already has several investments in Australia, including stakes in the Whitehaven and Belvedere coal ventures in the eastern states, and a 25 per cent indirect stake in the Australian Premium Iron joint venture with Aquila Resources in the Pilbara.
Below is a press release issued by First Reserve at the time of the deal:
May 13, 2010
Highlights
· Calibre Global has reached agreement on a strategic investment in the Company by the world’s leading private equity investor in the energy and natural resources sector, in a company enhancing deal.
· New shareholders are fully committed to accelerating Calibre’s organic and acquisition led growth strategy, building on the Company’s core strengths in iron ore and rail infrastructure with further bulk commodity and geographic diversification.
· The investment will support and enhance Calibre’s mission, under its current management team, to deliver maximum value and exceptional service to its existing clients.
The shareholders of leading Australian engineering and project delivery firm, Calibre Global, are pleased to advise that leading global private equity firm, First Reserve Corporation (First Reserve), has made a strategic investment in Calibre to acquire a majority interest in the Company. Under the same transaction, Brisbane-based investment firm, Connect Resource Services (CRS) has also invested in Calibre Global.
Executive Chairman and co-founder of Calibre, Ray Munro, retains a significant shareholding in Calibre and remains as Executive Chairman of the Company. Calibre’s current management team, under Managing Director Rod Baxter, will continue to lead the Company in pursuit of its growth objectives.
With the support of its new shareholders, Calibre will continue to build depth and breadth of experience within its project management and technical teams, in line with its corporate development objectives.
Greenwich based First Reserve is the world’s leading private equity investor in the energy and natural resources sector. CRS is a privately owned investment and consulting firm specialising in business evaluation and the management of investments within the Australasian resources and associated services sectors.
The Calibre Board will be further strengthened with the addition of 5 new board members – two from First Reserve and three from CRS - joining current Board members, Executive Chairman Ray Munro and Managing Director Rod Baxter. Having sold down all of his interest in the Company, co-founder Dave Walker has resigned from the Board and will remain as a consultant to the Company.
Calibre Global Managing Director, Rod Baxter said “we are delighted to have attracted such strategic and supportive investors as First Reserve and Connect Resource Services. We see a very complementary and value accretive fit with this deal, which will enable us to pursue our growth and acquisition strategy while retaining our absolute commitment to excellence in project delivery. We also expect that it will increase career development opportunities for our people.
“Both First Reserve and CRS are committed to supporting Calibre’s current strategic focus of providing engineering and project management services to the bulk commodity sectors of iron ore and coal, in which we plan to extend our reach, along with rail infrastructure. With their support, we will continue to seek out new acquisition opportunities to underpin future growth, following our recent acquisition of the remaining 50% of the Calibre Engenium Rail Joint Venture.”
Alex Krueger, Managing Director, First Reserve, said “Our investment in Calibre will help a strong and proven management team to successfully pursue the great opportunities that exist in the bulk commodities business and will offer opportunities to grow the business through acquisition. Together with the team at Connect Resource Services, who we know well, we can bring both capital and contacts to a business that is very well positioned to benefit from the long term growth fundamentals in the resources and infrastructure sector.”
Andrew Boyd, Managing Director, Connect Resources Services,said: “We are backing Calibre’s excellent management team to further enhance and grow the business to take advantage of the strong pipeline of mining and infrastructure related investment forecast for Australia in the coming years. We see Calibre as a business with great potential.”
Executive Chairman, Ray Munro said: “This is a great outcome for our business – a company enhancing deal that will assist us to grow the Company and deliver greater value to our clients. Our new shareholders have recognised the opportunity to be involved in a very good business operating in a robust sector with a bright future.”
About Calibre Global
· A leading Australian based project delivery group servicing the resources and infrastructure industries. Formed in 2002, the Company has experienced rapid growth, becoming the fastest growing private company in Western Australia in 2005, and averaging over 40% annual compounded revenue growth since inception.
· Acquired the remaining 50% of the Calibre Engenium Rail Joint Venture in February 2010. Rebranded as Calibre Rail, the rail business is arguably now the largest heavy haul rail provider in Australia.
· Completed, or completing, resources and infrastructure projects worth over $18 billion, including 11 major iron ore projects in the Pilbara, and most of the heavy rail development in WA since 2005.
· Designed and built Australia’s largest iron ore mine – Yandi (Pilbara, Western Australia) for Rio Tinto.
· Outstanding safety record - over 7 million hours worked without a lost time injury.
· Employs more than 700 people with offices in Perth and Brisbane, and specialist safety training centres established in Jandakot, Western Australia and Thebarton, South Australia. Calibre Global provides engineering, project management, automation and process controls systems, safety and training services, industrial IT consulting and rail transport solutions.
About Connect Resource Services
Connect Resource Services is a privately owned, Brisbane based investment and consulting firm specialising in business evaluation, promotion and optimisation of investments within the Australasian resources and associated services sectors. Established in 2008 by mining industry executives, CRS seeks to identify and develop opportunities for its investors to participate in the buyout, development or sponsorship of mineral resource projects and in the acquisition of strategic service providers to the resources industry.
About First Reserve Corporation
First Reserve is the world’s leading private equity firm specialising in the energy and natural resources sectors, making both private equity and infrastructure investments throughout the energy and minerals value chain. For more than 25 years, it has invested solely in the global energy and natural resources industries, and developed an unparalleled franchise, utilizing its broad base of specialized industry knowledge as a competitive advantage. First Reserve invests strategically across a wide range of energy and natural resources industries, developing a portfolio that is diversified across the value chain, backing talented management teams and building value by building companies. Further information is available at www.firstreserve.com.
First Reserve’s Australian investments include Whitehaven Coal, API and Belvedere Coal.
