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Golden Circle Limited
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In October 2007 Anchorage (along with Macquarie Investment Management Limited), subscribed, $35.5 million for 35% of Golden Circle and assisted with a refinancing of convertible notes and senior debt.
Golden Circle, based in Brisbane and established in 1947 as a co-operative, is one of Australia’s best known food manufacturers producing canned fruit and vegetables, chilled fresh and long life juices, cordials, jams and baby foods. Golden Circle acquired the Original Juice Company, a fresh and ambient juice manufacturer based in Melbourne in 2002.
After many years of consistent profitability, the business experienced variable and reduced profitability between 2003-2006. Anchorage investment rationale was centered around developing a clear turnaround plan, leveraging the strong brand and established distribution network.
Anchorage drove the turnaround in performance of the business with EBIT growth between June 2007 to June 2008, of $6m to $43m. Anchorage took a very active role in the turnaround, Phillip Cave was Chairman and Michael Briggs a Director of Golden Circle Ltd.
The turnaround improvement was achieved through:
-Improved management team and accountability, including appointment of new CEO;
-Cost reduction process to remove excess overheads;
-Supply chain initiatives to improve buying;
-Manufacturing ‘back to basics’ program to address manufacturing efficiency and waste.
In December 2008 Anchorage sold its investment in Golden Circle, following shareholder approval of a $1.65 per share takeover bid by H.J. Heinz. The exit was executed via a ‘scheme of arrangement’ offer from H.J. Heinz. The scheme received support from over 97% of Golden Circle shareholders.
Anchorage achieved a gross IRR of 129% and a 2.5x multiple on the transaction.