Three major Western Australian businesses have changed hands in the past month, with Heatley Sales receiving an injection of private equity and Pioneer Water Tanks and Summit Storage Products passing to new owners.
Three major Western Australian businesses have changed hands in the past month, with Heatley Sales receiving an injection of private equity and Pioneer Water Tanks and Summit Storage Products passing to new owners.
Heatley is planning a national expansion after AMP Private Equity invested $11 million in the industrial supplies business.
The Heatley transaction is AMP’s second big investment in a private WA business this year.
AMP invested an initial $10 million in transport company Mitchell Corporation 12 months ago and in February invested a further $6 million to help Mitchell continue its rapid expansion on the back of the resources boom.
West Perth advisory firm Mergers & Acquisitions played a key role in brokering the Heatley transaction, the initial Mitchell investment and the sale of Pioneer Water Tanks.
M&A managing director Ross Goldstein said the recent deals illustrated the wide range of prices that private business owners could gain.
“A trap for vendors when approached by a purchaser or private equity firm is being tied to exclusive dealings with only one party,” he said.
“Professional purchasers usually have considerable deal negotiation experience and skills, whereas sellers usually have only one opportunity to maximise the value for the sale of their business.”
To illustrate the range of possible outcomes, Mr Goldstein said the difference between the lowest offer and highest offer received on one of M&A’s recent WA transactions was $6 million.
Bellevue-based Pioneer Water Tanks, which was established in 1988 and has grown to have 80 employees, was sold to Bluescope Steel for an undisclosed sum.
The former owners, Stephen and Danuta Nasso, engaged M&A to find a new owner for the business and ended up attracting four bidders.
The company will trade in future as a division of BlueScope Water under the current management team, led by Mark D’Mello and Gavin Connaughton.
Mr Nasso will continue to be involved as a consultant.
Canning Vale-based Heatley Sales was established in 1987, four years after the Heatley family sold an earlier business to J Blackwood & Son, now part of Wesfarmers.
From a standing start, the company has grown to have expected turnover of $37 million and 124 staff.
Chairman Geoff Heatley said the original shareholders personally lacked the capital to support the planned national expansion, which would take the group beyond its five branches in WA and one branch in SA.
As a result of the new equity investments, ownership of the company is now divided between AMP (70 per cent), management (15 per cent) and the Heatley family (15 per cent).
“Our new partner, AMP Capital, supports the business strategy and will assist us in developing a truly national corporation with a family based culture,” Mr Heatley said.
AMP Capital operations director Bill Cook said a notable feature of the Heatley transaction was the rapid turnaround.
It took just six weeks from the first meeting until financial close, including financial and technical due diligence.
Bassendean company Summit Storage Products has been acquired by private Sydney investment company Ramico (Australia).
Ramico’s Ray Butcher will be managing director of Summit, which started manufacturing shelving products in 1980 and was acquired in 1990 by Michael Minshall, who is currently winding down his involvement in the company.
BUSINESS DEALS
- Heatley Sales plans national growth after AMP Private Capital invests $11 million.
- Pioneer Water Tanks sold to Bluescope Steel.
- Summit Storage Products sold to Ramico.
- AMP Private Capital invests further $6 million in Mitchell Corporation.
