Acquisition for AMP Pencarrow Private Equity Fund, 10 August 2005
The recently launched AMP Pencarrow private equity fund has entered into a joint investment with AMP’s retail private capital fund to purchase a significant stake in marketing and distribution company, CS Company Limited. Former 100% owner, Ken Millar, has retained a significant stake in the business, and the senior management team has also taken the opportunity to invest in the company.
Ken Millar, CS Company Managing Director, said he remains committed to the future success of the business but recognised it was time to transition the business to its next level of ownership.
Murray Gribben, Head of Alternative Assets for AMP Capital Investors, said the investment was projected to return healthy results based on the solid fundamentals and growth prospects of CS.
“As the recently launched AMP Pencarrow Fund’s first investment, CS Company Ltd represents the sort of quality business in a growth industry that we are looking for. The AMP Pencarrow Fund has a tight investment mandate focusing only on local MBOs and expansion capital transactions,” Mr Gribben said.
CS is a long established Auckland-based marketer and distributor of prestige fragrances, cosmetics and consumer toiletries in New Zealand. The business holds exclusive distribution rights from 38 international suppliers – a portfolio of more than 100 different brands. Key international suppliers include Procter & Gamble, Unilever, Coty Lancaster, Boots the Chemist, Bonne Bell and Hasbro. Brands include Max Factor, Cover Girl, Gucci, Hugo Boss, Calvin Klein, Wella, Pantene, Vicks and Adidas.
CS is the largest independent multi-brand distributor in its market. The company employs around 50 staff, half of whom fulfil marketing, brand management and direct sales roles. It provides a full, turn-key service to international suppliers (with whom it has long-term relationships), assuming ownership of stock and undertaking all promotional, marketing support, sales, merchandising, distribution and logistical functions.
Rod Gethen, Director Pencarrow Private Equity, said the third party distributor model suited the New Zealand market dynamics and these types of businesses have attractive investment characteristics.
AMP Capital Investors and Pencarrow have considerable experience in such transactions having previously invested in a range of businesses including Hurricane Wire Products, Eskimo Logistics Group, Formway, Donaghys and Wellington Drive Technologies. More recently they partnered with Methven senior management in an MBO of the showerware manufacturer and in late 2004 floated the company on the NZX.
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