By NZPA
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Tuesday 20th August 2002 |
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Southern Capital executive chairman Graeme Wong said the purchase, from GS Private Equity Pty Limited, part of the Grant Samuel & Associates Group, was its first investment in an industrial operating company.
Mr Wong said the company was expected to provide good cash flows, with revenue exceeding $50 million annually, although because it was half privately-owned he could not reveal details.
Prior to the purchase, Southern Capital was debt-free and had $5.5 million in the bank.
"It's within the scale of the things we've been doing, but from a Southern Capital point of view we're looking at doing transactions about this size in order to make sure we've got enough critical scale," Mr Wong said.
"If we've got too many small projects, they eat up management time."
Settlement will take place today, with the other 50 percent of Hirequip remaining in the hands of Stuart McKinlay and family of Dunedin.
Mr Wong said the hire equipment industry was growing, with future infrastructure projects in Auckland estimated at up to $1 billion.
Hirequip, which operates from 36 locations, was also considering the acquisition of small providers.
Established in the early 1950s, the company acquired Projex, which was in receivership, in September 2000.
Mr Wong and Southern Capital director Howard Paterson will take up positions on the board of a new holding company.
The other directors of the company are Mr McKinlay and Trevor Scott, a South Island company director and chartered accountant, who will remain chairman.
Southern Capital investments include the Pegasus Bay township development north of Christchurch; the major stake in Omaha Beach, a 600-lot development north of Auckland; interests in a 460-hectare marine farming application at Clifford Bay, in Marlborough; a proposed motorway service area near Kaiapoi; and stakes in several biotechnology companies.
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