NEW YORK, August 24, 2004 - Castle Harlan, Inc., the New York private-equity investment firm, announced today that shares in Bradken Ltd, a manufacturer of mining and rail products owned by its Australian affiliate CHAMP, has begun trading publicly on the Australian Stock Exchange in Sydney (ASX symbol: BKN).
A total of 102.08 million shares were brought to market last Wednesday at A$2.40 per share, raising some A$245 million. The transaction was fully underwritten by Goldman Sachs JB Were and Credit Suisse First Boston. CHAMP retained a 10.1 percent stake in the company, which corresponds to 23 percent of its original investment. Bradken's shares closed today at A$2.77.
CHAMP (Castle Harlan Australian Mezzanine Partners Pty Ltd) acquired Bradken in March 2001 through the CHAMP I funds for A$185.5 million. The Bradken IPO followed a debt recapitalization that took place in July 2004, which returned most of CHAMP's original investment. CHAMP's total proceeds from the IPO, retained stock and the recapitalization amounted to approximately A$145.0 million. This represents a gain of more than 4x for CHAMP's offshore group of investors, or a compounded annual return of 65 percent.
Bradken is the market leader throughout Australia and New Zealand in the manufacture of consumable equipment for the mining industry, railroad freight cars, wheel assemblies for railroad cars and industrial castings.
In 2003, it had revenues of A$399.6 million and an EBITDA of A$48 million, a substantial increase since CHAMP acquired Bradken, when EBITDA was approximately A$30 million. The company's growth has been enhanced, in part, by China's recent strong demand for mined raw materials such as iron, copper and coal.
Founded in 1987, Castle Harlan is a leading New York private-equity investment firm, investing primarily in controlling interests in the buyout and development of middle-market companies in North America and Europe. Castle Harlan's team of nine managing directors, including its founders, has completed more than 60 acquisitions with a total value in excess of $7 billion. The firm traces its roots to the start of the institutionalized private-equity business in the late 1960s.
In 2,000, Castle Harlan was a co-founder of CHAMP, which is the successor to one of Australia's oldest and largest private-equity investment firms dating back to 1987. CHAMP currently manages or advises approximately A$850 million in funds for private-equity investment in the Australasian region, including the CHAMP I funds, with A$500 million in committed capital. The CHAMP I funds were raised in 2000 and are now approximately 60 percent invested.
CHAMP's other portfolio companies include Austar United Communications Limited, Australia's second largest pay-TV company, with more than 427,000 subscribers, and Australian Pacific Paper Products, Australia's second largest manufacturer and distributor of disposable diapers and adult incontinence products.