NEW YORK, June 2, 2004 - Castle Harlan, Inc., the New York private-equity investment firm, announced today that its Australian affiliate, CHAMP, had sold Penrice Soda Products Pty. Ltd., to two Australian private-equity firms for A$110 million (approximately US$78 million).
Penrice, based in Adelaide, is Australia's only manufacturer of sodium carbonate (soda ash) and sodium bicarbonate (baking soda). Founded in 1940, the company has annual revenues of approximately A$130 million and employs about 240 people, mostly in South Australia.
CHAMP (Castle Harlan Australian Mezzanine Partners) was founded in 2000 and is the successor to one of Australia's oldest and largest private-equity investment firms dating back to 1987. Penrice was acquired by CHAMP in November 2001 for A$80 million (US$43.3 million at the time). It is one of the initial six portfolio companies acquired by the CHAMP I funds and is the first to be sold.
Penrice has been acquired by Quadrant Capital, an affiliate of Westpac Private Equity Pty Limited, and funds associated with Colonial First State Private Equity Limited. Penrice management also retained an equity interest in the company. National Australia Bank underwrote the debt financing for the transaction. CHAMP was advised by Credit Suisse First Boston.
Soda ash is a key ingredient in manufacturing glass and has various other industrial applications. Baking soda has a multitude of commercial, pharmaceutical and industrial applications and is sold in Australia and throughout Asia. Penrice also produces salt and mines limestone, two key materials in the chemical manufacturing process, which are also sold directly in the Australian market.
"Penrice has benefited immeasurably from our close working relationship with CHAMP and the support we have received from the firm," said Penrice Chief Executive Officer David Reid. "We look forward to realizing our future potential with Quadrant and Colonial First State."
Managing Director Howard Morgan of Castle Harlan, who is also a member of the CHAMP Board and Executive Committee, commented: "Penrice has a high quality management team that we were pleased to work with to strengthen its market position and build a track record of profitable growth in new products and markets. Significant opportunities remain for further growth, particularly in the area of salt and sodium bicarbonate production."
CHAMP's other portfolio companies include Austar United Communications Limited, Australia's second largest pay-TV company, with more than 427,000 subscribers, and Bradken Holdings Pty. Ltd., the market leader in Australia and New Zealand in the manufacture of tools for the mining industry and wheel assemblies for railroad cars.
CHAMP, based in Sydney, is headed by Bill Ferris, executive chairman, and Joseph Skrzynski, managing director. They were the founders of a predecessor firm that had consummated more than 30 private-equity transactions in Australia before joining with Castle Harlan to form CHAMP.
CHAMP currently manages or advises funds with approximately A$850 million for private-equity investment in the Australasian region, including the CHAMP I funds, with A$500 million in committed capital, which were raised in 2000 and are now approximately 60 percent invested.
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 completed raising its fourth investment fund, Castle Harlan Partners IV L.P., in September 2003 with approximately US$1.2 billion in committed capital.
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.
Castle Harlan's portfolio companies, which employ more than 26,000 people, include AdobeAir, Inc., a leading manufacturer of evaporative coolers; Associated Packaging Technologies, the country's leading manufacturer of CPET containers for the frozen food industry; and Advanced Accessory Systems, the largest manufacturer of automotive roof racks and tow systems in North America and Europe.