Sharechat Logo

ASX-listed Super Retail Group pays $144M for Macpac, more than twice the 2015 price

Tuesday 20th February 2018

Text too small?

ASX-listed Super Retail Group has bought outlook equipment chain Macpac Holdings for $144 million, more than twice the $68.7 million paid by Australia's Champ Private Equity in 2015. 

The deal adds 54 stores across Australia and New Zealand to Queensland-based Super Retail's suite, and is expected to generate sales of $95 million and pro-forma earnings before interest, tax, depreciation and amortisation of $16 million in the year ending March 31. Super Retail will consolidate its Rays outdoor equipment brand under the Macpac badge, which will focus on small format stores reliant on apparel, large format stores offering an extensive range of apparel, footwear, equipment and accessories, digital channels offer the complete range and access to services, and a commercial channel. 

"The Macpac business has performed extremely well over recent years, yet there remains a significant opportunity to grow the business in the near future through opening new stores and growings its digital and commercial channels," managing director Peter Birtles said in a statement to the ASX. "The integration of the business with Rays provides an opportunity to position Macpac as the leading outdoor adventure specialist across Australia and New Zealand providing a much broader range of quality products, information and services than any other retail business." 

Super Retail will fund the deal from existing debt, and has got its banking partners to increase that credit line by A$150 million to give the retail group headroom to pursue a broader omni-retailing strategy. The ASX-listed shares dropped 15 percent to A$7. 

The acquisition is expected to be completed on March 31, and generate mid-single digit earnings per share gains for the ASX-listed firm. 

Super Retail, which operates the BCF, Rays, Rebel and Super Cheap Auto retail brands, will take over the outdoor equipment chain after about two years in private equity ownership. Champ bought a majority stake using its Champ Ventures 7 Funds vehicle to acquire the retailer, which targets equity investments of between $20 million and $80 million. 

At the time of the sale to Champ, Macpac cornerstone shareholder and Kathmandu Holdings founder Jan Cameron kept a small stake with her former husband and Kathmandu co-founder Bernie Wicht, and Macpac chief executive Alex Brandon. Cameron owned about 58 percent of Macpac, having bought into the company for a reported A$20 million in 2011 after her non-compete clause with Kathmandu ended. 

Financial statements for holding company MP Finco show Champ paid $68.7 million for Macpac, of which $62 million was in cash and $6.8 million in scrip. In the five-month period covered to March 31, 2016, the company generated an operating loss of $362,000 on revenue of $10.6 million at a gross margin of 55 percent. The retail carried bank debt of $25 million, with a 2019 maturity. 

Super Retail reported a 3 percent decline in first half profit to A$72.2 million on a 2.2 percent gain in revenue to A$1.32 billion. The board declared an interim dividend of 21.5 Australian cents per share, payable on April 3. 


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar trades near 2019 low on Aussie rate outlook, China worries
Short window left to lock in good interest rates on term deposits
MediaWorks breakeven stymied by radio
Loan-to-value restrictions effective but have some drawbacks - RBNZ
Yili deal a timely cash injection for Westland farmers - ANZ
AFT interested in medicinal cannabis but says it's not commercially viable yet
Serko chalks up another year of 28% sales growth, profit dips on acquisition adjustment
NZ first-quarter retail sales grow 0.7%, slightly better than expected
SkyCity poised to enter online gaming space
AFT narrows net loss, turns cash flow positive

IRG See IRG research reports