Refinance of Affinity Education Group (“AEG”) completed

In mid December 2018, AEG successfully refinanced its debt facilities. The refinance recognises the significantly improved quality and performance of the business since acquisition by Anchorage Capital Partners three years ago. The new debt facility lowers the overall financing cost to the business and provides increased acquisition capacity. This enables AEG to continue to acquire centers in the company’s core middle market catchments and leverage the benefits of the Affinity Way culture and Affinity’s best practice operating processes and systems platform.

Anchorage Capital Partners remains fully invested in and supportive of the growth of AEG.

AEG is delivering strong momentum with the benefits of the operational change program apparent. The introduction of the new Child Care Subsidy in July 2018 is increasing the affordability of long day care across the industry, in particular to families in AEG’s core catchment areas and target market. We are excited about the prospects for the business in 2019. AEG also welcomed a new CFO, Cathy Montesin, at the start of 2019.

Cathy has previously held senior finance roles at Cleanaway Waste Management, Ernst & Young and has prior experience in a variety of accounting and transaction advisory roles.

Facilities First Australia (“FFA”) wins material new contracts and completes acquisition of Nationwide Health and Aged Care Services

FFA recently completed the purchase of Nationwide Health and Aged Care Services, which currently services over 120 aged care homes and hospitals. 250 Nationwide employees will join FFA as part of the acquisition. The acquisition will strengthen FFA’s cleaning business and further diversify the revenue mix into the high-value aged care industry.

FFA also recently won the ‘Whole of Government’ cleaning contract for the North Sydney region, servicing ~170 schools and~ 120 government agencies. This contract adds to the successful ‘Whole of Government’ maintenance wins for the South West Sydney and North Sydney regions. FFA was the only head contractor in metro Sydney to be awarded both maintenance and cleaning contracts. The mobilisation process to service the cleaning contract (~700 new staff) has been a focus for the business over the past few months.

Other key cleaning wins include the IKEA national contract and ANZ and Western Sydney stadiums. These wins have generated strong momentum for the start of 2019.

FFA has consolidated its headquarters in Sydney, with the Baulkham Hills and Alexandria teams now relocated to a single office in Macquarie Park.

Acquisition of South Pacific Laundry (“SPL”) and appointment of new members of executive leadership

In September 2018, Anchorage Capital Partners completed the acquisition of SPL.

SPL is a leading Australia-wide laundry operator, serving customers in the accommodation and healthcare sectors from a national network of processing plants and distribution centres.

SPL’s rapid growth through undertaking approximately +20 bolt-on acquisitions to complete its national footprint presents Anchorage Capital Partners with an opportunity to continue to drive consistency of best-practice processes across the SPL network.

SPL is led by Chief Executive Officer, Ray Hayes. Ray was previously General Manager of SPL and has worked in the commercial laundry industry for over 35 years.

Since acquisition SPL has appointed a new CFO, head of human resources, Brisbane branch manager, head of maintenance and a new national operations manager.

The operational improvement agenda is well underway with multiple initiatives being worked through in parallel as part of the Anchorage Capital Partners turnaround program in partnership with management. These initiatives include systems rationalisation, centralisation of core functions, labour management and the roll-out of best practice processes across the business.

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To see progress updates and news throughout the year, please “follow” Anchorage Capital Partners and our portfolio companies by clicking the links below.

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ANCHORAGE OVERVIEW

A leading operational private equity firm in Australasia

Established team of investment professionals

Genuinely hands-on with deep operational experience, adding value to investments

Capability to invest in Australia, New Zealand and South-East Asia

Three funds with a total of A$810 million of commitments:

  • Fund I: A$200 million, 2008 vintage – fully invested

  • Fund II: A$250 million, 2013 vintage

  • Fund III: A$360 million, 2017 vintage

INVESTMENT FOCUS

Our funds can invest in global businesses headquartered in the Asia Pacific:

  • Companies that are currently not operating at their full potential

  • Headquarters in Australia, New Zealand or South East Asia

  • Minimum of $100m in revenues

  • Target enterprise value ranging from $50m to $250m, with the ability for larger investment through co-investment from our limited partners

  • All sectors, except direct property, direct mining, tech / biotech and start-ups or early stage

OUR UNIQUE PROPOSITION

Anchorage Overview – a leading Asia-Pacific mid-market operational improvement focussed private equity fund:

  • Anchorage Capital Partners is a private equity firm based in Sydney, Australia

  • Anchorage is currently investing the A$360m Anchorage Capital Partners Fund III which was raised in November 2017 and has unlimited co-investment potential for larger transactions.

  • Our investors are some of the largest Australian and international super and pension funds as well as global funds and endowments / foundations.

  • Anchorage is a specialised financial investor that focuses on investing in companies with strong and established track records and robust prospects for future earnings growth.

  • We are actively involved in the management of investee companies through comprehensive business planning and monitoring to continually drive operating performance improvement.

  • We invest heavily in the companies we own to ensure their future success.

  • Anchorage’s principals are highly experienced, having been involved in private equity investments across the Asia Pacific for over 25 years.

  • Anchorage’s prior transactions include Golden Circle, Bisalloy Steel, Acrow Formwork & Scaffolding, Burger King New Zealand, First Engineering, Total Eden, Brand Collective, Dick Smith, Shoes & Sox, Solgen Energy Group, Affinity Education, Contract Resources and South Pacific Laundry.

  • Anchorage completes most of its due diligence in-house and as such can mobilise and complete our due diligence in a fast and efficient manner.

  • Anchorage has significant experience in acquiring businesses that are non-core to a larger group, including those that were reliant on shared service functions – most of our investments in Anchorage Capital Partners Fund I and Anchorage Capital Partners Fund II were non-core carve outs of subsidiaries or divisions of larger corporations and normally involved transition services arrangements.

  • Based on our successful track record of carve-out transactions, we have developed a robust framework to separate an acquired business unit or division from a parent organisation.

Current Portfolio

INVESTMENT

ENTRY DATE

DESCRIPTION

September 2018

Australia-wide commercial laundry operator, serving customers in the accommodation and healthcare sectors from a national network of processing plants and distribution centres

October 2017

Provider of maintenance services to global players in the oil, gas and energy sectors

September 2017

Provider of cleaning and maintenance services for customers across hospitality, education, retail, corporate, entertainment, government and healthcare sectors

December 2015

Owner and operator of child care centres

March 2015

Supplier and installer of commercial solar power systems

December 2014

Owner and licensor of footwear and outerwear brands and specialist children’s footwear retailer

January 2009

Manufacturer and distributor of steel plates

Exited Investments

INVESTMENT

DESCRIPTION

Food manufacturer producing canned fruit and vegetables, chilled fresh and long life juices, cordials, jams and baby foods

Holder of the Burger King franchise rights in New Zealand, with a network of more than 70 restaurants

Operator of a national network of scaffolding and formwork solutions

National provider of water products, solutions and services

Singapore-based manufacturer of ultra-precision moulds and plastic components

Consumer electronics retailer with ~370 stores in Australia and New Zealand