NZVCA announce award for Deal of the Year

31 October 2011

NZVCA announce award for Deal of the Year

The New Zealand Private Equity and Venture Capital Association (NZVCA) has announced the winner of the inaugural NZVCA awards that recognises outstanding performance in the private equity industry.

NZVCA Executive Director Colin McKinnon said “An independent industry expert assessed nominations and found examples of innovation, growth, and excellent returns on investment that benefit investors, who are generally local and international superannuation and pension fund members.”

Entries were judged on return to investors and the company's financial performance. The company's contribution to the economy, employment, innovation, consistency and industry competitiveness was also taken into account.

“It’s important to recognise and reward performance” McKinnon said. “Private equity firms strive for sustainable and consistent high-performing returns and the New Zealand industry has matured to the stage where we can celebrate outstanding investment performance.”

“The winner of our 2011 award is an example of the purpose and aim of private equity: to steward companies so that they grow and create value and long-term sustainability through aligning the interests of owners and management. This ultimately delivers improved productivity, creates jobs and contributes to the national economy.

The winner of the Deal of the Year is Pacific Equity Partners (PEP) for their investment in Tegel Foods

Tegel, the leading producer of poultry products, was sold to Affinity Equity Partners Funds in May 2011, generating an overall return to PEP Fund investors of 3.9x their money and 101% IRR . Over the 5 year hold period, having acquired the business from leading international food company Heinz, PEP supported the management team’s turnaround of the business. This turnaround involved re-aligning chicken grower incentives, driving significant improvements in the facilities and customer relationships, broadening the product set and opening up attractive export lines. The business was transformed from a leading domestic producer to an important regional player.

Tegel has established a growing export business that sells value added products into Australia and other parts of the Asia Pacific region. Exports now contribute around 10% of revenue.

Tegel is headquartered in Auckland and has approximately 1,800 full time employees.

PEP Managing Director Anthony Kerwick said: “We are delighted with the outcome of this investment for the PEP Fund investors, Tegel management and employees. This was in many ways a classic PEP Fund investment … where we were able to support management to take a good company and turn it into a great one. The new owners will bring another dimension of opportunity to Tegel and we’re confident that it will continue to thrive under their ownership”

McKinnon said “the Tegel investment received recognition on the global stage being also awarded the ‘International (global) Retail and Consumer Products Deal of the Year’ by M&A Advisors in the US this year and the AVCAL ‘Best Management Buyout $100m-$500m’.

The NZVCA awards were announced at the NZVCA 2011 annual conference.

ENDS

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