New Zealand King Salmon is the country’s largest salmon producer supplying both the domestic and export markets.  Based in Nelson and with hatcheries, farms and processing facilities across Marlborough and Canterbury, the company is highly integrated from brood stock management right through to distribution of product through its well-recognised consumer brands, Seasmoke, Regal and Southern Ocean.

In September 2008 Direct Capital invested alongside management to acquire a 45 per cent shareholding in New Zealand King Salmon.

The New Zealand King Salmon Company Limited was formed in 1996 with the privatisation and merger of New Zealand’s two largest salmon companies, Southern Ocean Seafood Limited and Regal Salmon Limited.  The Company is ultimately owned by the Tiong Group, one of the largest private companies in Malaysia with substantial global investments in forestry, property and the media.  New Zealand King Salmon is New Zealand’s largest integrated aquaculture company and the largest global farmer of the premium Chinook species of salmon.  Rich in Omega 3 and other nutrients, salmon is one of the fastest growing protein categories.  The company employs 415 staff and operates six sea-farm sites in Marlborough Sounds, two hatcheries in Waikoropupu Springs and Tentburn; and four processing factories in Nelson.

In August 2008 Direct Capital acquired a 30% interest in one of Australasia’s leading menswear retail chains, Rodd & Gunn Limited. 

Rodd & Gunn has a retail chain of 55 stores and concessions in malls and on high streets including 34 stores across Australia and 21 stores throughout New Zealand.  The retailer has a long-established brand and targets the premium male customer. Following Direct Capital’s investment, managing director Mike Beagley retains a 70% shareholding.

In May 2008 Direct Capital acquired a minority shareholding in the merger of Camm 4 and Shears & Mak. Direct Capital’s investment is to provide expansion capital for the company to broaden its services beyond manufacturing to include the associated installation works and to pursue strategic acquisitions.

Camm4 is one of New Zealand’s leading joinery manufacturers.  The company operates out of large modern, automated, purpose-built premises located in Albany on Auckland’s North Shore.
Camm4 combines the latest CNC machinery along with integated manufacturing software resulting in precision manufacturing and highly efficient operations.
Everything made at Camm4 is drawn, componentised, programmed and then CNC machined.  This provides consistently reliable high quality products.  It results in greater accuracy and therefore greater cost efficiency. 

Established 22 years ago by Charlie Shears and Jon Mak, Shears & Mak employs 60 staff including quantity surveyors, draughtsmen, spray painters, cabinet makers, and carpenters at its Panmure premises, and is the most respected brand in the New Zealand shop-fitting sector.Predominantly a manufacturer, Shears & Mak derives its income from a range of national and international retail, hospitality, and commercial customers, including Gucci, Coffee Club, Crabtree & Evelyn, DFS, Kimberleys, Louis Vuitton, Max Fashions, Mississippi, Mont Blanc, OPSM, Overland Shoes, Pascoes, Stewart Dawsons, Sunglasses Hut, Watches of Switzerland, Gloria Jeans Coffee, and Air New Zealand.

Camm 4 and Shears & Mak service the large retail and construction sectors of the economy with a range of customers in New Zealand and Australia across different sectors. The shop-fitting industry has traditionally been an owner-operator model with a limited ability to scale operations.  Following the merger the group is the largest shop-fitting and installation company in New Zealand and well placed to match the increasingly national and international business of its clients

GoBus Limited (‘GoBus’) is a leading provider of public transport services in the Waikato region, providing urban, school and charter/tour bus services. GoBus was formed in 2003 from the amalgamation of four local bus companies ‘Blue Worth’, ‘Simpson’ and ‘Hodgson’ and ‘HCB’. The Company now employs 460 people, and operates a fleet of 410 vehicles, 4 workshop facilities and 8 depots around the Waikato region.

Direct Capital’s investment in December 2007 facilitated the replacement of a founding financial investor. Other founding shareholders and the GoBus management team have retained a significant investment in GoBus and continue to manage the company.

The public transport sector has several positive fundamental drivers influencing growth including demographic trends, socio-behavioural trends, and increasing government support and investment. Significant further opportunities to grow GoBus have been identified.

Innovair owns the automated pest control product, Robocan. Robocan is an automatic dispenser of pest repellent and pest control sprays.

The company achieved strong market positions and sales growth in Australasia with significant potential to expand the business in other offshore markets. The company is the number one selling pest control product in New Zealand with market share of 35%. Innovair is also developing a number of new products for application across a range of channels.

On the 10 October 2007 Direct Capital took a cornerstone stake in Innovair Group Limited, with a view to providing further capital to assist the company’s international expansion. Direct Capital initially acquired a 28% shareholding in Innovair alongside the original shareholders.

Direct Capital believes the company has high growth potential and was attracted to the investment opportunity by the significant opportunities for international expansion, which will require further capital and support from shareholders

Outcome :

During 2008 Innovair Group agreed to a sale of its assets to multinational SC Johnson. SC Johnson was well placed to continue to grow this business, particularly in offshore markets.

The value of the transaction is confidential but represented a very positive outcome for Direct Capital Partners and Pohutukawa shareholders, producing an annualised IRR of over 250 per cent and a return on capital invested of over 4X.

Stratex is one of Australasia's leading suppliers of products that contain paper, foil, and polymers. Stratex has a strong market presence in food packaging, industrial packaging, and building products utilizing a range of coating, laminating, printing, and tray forming technology in Australia and New Zealand. It is well known for its high quality and excellent customer service.

The business has been in existence since 1969 when it originally coated paper for milk powder bags.

Today Stratex has manufacturing facilities in Auckland, Sydney and Melbourne and sales offices in Melbourne and Brisbane.

In 2007 Stratex acquired Trans Tec, a division of Allkotes. Located in Melbourne, Trans Tec specialises in extrusion coatings on light weight materials, making products for use in Thermal laminating and food packaging.

The Auckland factory, in New Zealand, houses state-of-the-art extrusion laminating technology that processes a variety of polymers, foils, and papers that are sourced from throughout the world.

On 1 May 2007 Direct Capital announced that it has partnered with senior management in the succession management buyout of Stratex Limited.

Direct Capital was attracted by the strong market position, capable management and progress made in building a trans-Tasman business.

International Forwarding Limited (“IFL”) has acquired an initial 20% shareholding in Gluck Pty Limited. Gluck is one of Australia’s larger privately owned supply chain services companies employing over 150 people throughout Australasia. Gluck’s range of services include air and sea freight, freight optimization, customs clearance services local 3PL services and general shipping and freight management services. Gluck is based in Melbourne with operations in Sydney, Brisbane, Adelaide and Auckland.

Outcome
As a result of a direct approach to majority shareholders in May 2008 the Australian forwarding business Gluck was sold to Toll Holdings Limited resulting in an IRR for Direct Capital Investors of 26%.

Triton Hearing Clinics (formerly Professional Hearing Services) is a hearing aid retail business, providing hearing tests and hearing aid fitting services. The first Triton clinic was opened in Hamilton in 1988 by founding audiologists Brett Robertson and John Ho. Triton established its second clinic in Tauranga in 1999, in partnership with audiologist Carey Wright. Three further visiting clinics have been established in Thames, Waihi and Matamata plus a second clinic in Hamilton and Triton is now the leading hearing aid retail business in the Waikato / Bay of Plenty region. In 2007 Triton acquired Canterbury Hearing, with a clinic in Christchurch plus three visiting clinics in Darfield, Amberley and Ashburton. The acquisition represents Triton's entry into the South Island and further clinics are expected to be opened in due course.

Direct Capital has invested in Triton alongside experienced businessman John Ryder and Howard Bretherton and the founding Triton audiologists. Ryder and Bretherton have been appointed Executive Chairman and Director respectively. Ryder has founded and run a number of successful businesses including Ryman Healthcare, now an NZX40 company with a capitalisation of over $900m. Bretherton was involved in the successful development of Michael Hill Jewellers, which he joined when the business had just 2 stores, rising to Joint Managing Director until 2003. Ryder and Bretherton will lead the expansion and opening of further Triton outlets.

Business
Established in 1989, Express grew from a small firm providing basic freight forwarding services domestically into a large scale integrated logistics service provider with operations on both sides of the Tasman.

Today, Express offers clients a complete logistics management service, including couriers, third party warehousing and consulting. In addition Express provides system design and duty/tax advice for customers, which include global blue chip apparel customers.

Strategy
In 2005 Express Logistics was acquired by management, backed by Direct Capital, from the founder Brendon Thomas and general manager Graeme Mann, allowing the owners to realise significant value, whilst minimising operational change. Both Brendon and Graeme remained as minority shareholders as well as in executive positions, alongside the new management shareholders. The purchase encompassed shareholders who wished to see Express continue to grow with the same values and culture.

Looking forward, the investment strategy is to grow the company by consolidating its position as the largest mover of durable freight across the Tasman, offer enhanced services to both existing and new customers and develop new business on the Australian trade lanes, particularly to Asia.

Business
Max was established in 1985 and is one of New Zealand’s most recognised women’s apparel labels, appealing predominantly to the 18-35 year old customer base. By 2005 Max had grown to 34 retail stores, situated in leading shopping mall and high street sites across New Zealand.

Strategy
Direct Capital completed a succession management buyout of Max in July 2005. Direct Capital acquired a majority shareholding, with the balance of the shares owned by Max founder and Managing Director David Wright and other senior Max managers who have invested alongside Direct Capital.

Max has achieved impressive historic growth and operating performance and this continues with further selective store openings, and through reformatting of existing stores in important locations into larger flagship stores.


Outcome
In late 2007, Max was acquired by former Direct Capital portfolio company Ezibuy Limited. Direct Capital believes that, given the future prospects of Max in New Zealand and Australia, this is the best out come for both Max and Direct Capital.

The investment in Max produced a gross return of 5 times its original cost for Direct Capital.

Business
NZP manufactures specialty chemicals (largely pharmaceutical intermediates) for some of the world’s leading pharmaceutical companies, and also produces a range of ingredients used in dietary supplements.

NZP’s core competence is in the manufacture of natural biochemicals (primarily from animal by-products) under Good Manufacturing Practice (GMP) conditions which ensures its products conform to pharmaceutical industry quality assurance standards. Almost all NZP’s revenues are achieved from export markets.

Strategy
Direct Capital acquired a shareholding of 51% with the remaining 49% continuing to be owned by the management and staff of NZP and strategic investor Shin Nippon Yakugyo, a Japanese specialty chemicals business.

Financing for Direct Capital’s acquisition included the capital expenditure funding required by NZP to build a new factory to manufacture glycotherapeutic intermediates (glycotherapeutics are a fast growing category of the global pharmaceuticals market and of increasing significance to NZP’s business). Construction commenced in 2006 on the site of the existing head office and manufacturing plant in Linton near Palmerston North.

NZP is targeting a public listing within two to three years of Direct Capital’s initial investment.