Direct Capital

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Previous Investments

Direct Capital has been investing in successful private companies since 1994. We are proud of our track record in working with business owners to invest in and continue the growth of their companies.

Our investment is often the catalyst for change – helping to fund an acquisition of a competitor, establish an operation in Australia, or manage the change of ownership from an owner to their management team.

In this section you’ll find brief summaries of the companies that we have invested in, many of which are now household names. We have included our current investments as well as past investments that date back to 1994 when we first started investing in private companies.

Company		Year Invested	Company Description
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’, ‘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.	GoBus Limited	2007	GoBus Limited (‘GoBus’) is a leading provider of public transport services in the Waikato region, providing urban, school and charter/tour bus services.
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.	Innovair Limited	2007	Innovair owns the automated pest control product, Robocan. Robocan is an automatic dispenser of pest repellent and pest control sprays.
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%.	International Forwarding Limited	2006	Gluck is one of Australia’s larger privately owned supply chain services companies employing over 150 people throughout Australasia.
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 represented Triton's entry into the South Island and further clinics are expected to be opened in due course. Direct Capital invested in Triton alongside experienced businessmen John Ryder and Howard Bretherton and the founding Triton audiologists. Ryder and Bretherton were 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 led the expansion and opening of further Triton outlets.	Triton Hearing Clinics	2006	Triton Hearing Clinics (formerly Professional Hearing Services) is a hearing aid retail business, providing hearing tests and hearing aid fitting services.
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.	Express Logistics Limited	2005	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.
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.	Max Fashions	2005	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.
Business Image Centre is New Zealand’s premier full service visual communications provider. With origins as a pre-press company Image Centre has grown to offer a full suite of services including creative services, web site design and web site development, digital asset management and printing. This suite of products enables Image Centre to offer customers a one stop shop for all clients’ communication requirements. Strategy Direct Capitals investment in 2000 provided expansion capital to support the continued growth in the business and further develop value added services. The multi channel positioning has enabled ICL to become one of the largest independent print and prepress houses in New Zealand. In 2006 Direct Capital supported Image Centre in acquiring First in Print an Auckland based printing company.	Image Centre Limited	2000	Image Centre is New Zealand’s premier full service visual communications provider.
Business Established in Palmerston North in 1978, EziBuy Limited has grown to become one of Australasia’s largest and most progressive multi-channel retailers. Its eleven flagship catalogues per annum cover all clothing categories plus Christmas gifts and houseware and its retail and internet sales channels are growing strongly. Its women’s wear sales are estimated to represent nearly 5% of total New Zealand women’s wear market sales. Strategy In 1999 Direct Capital provided expansion capital to support the founding shareholders’ vision of becoming New Zealand’s catalogue market leader and to expand its Australian operations. In early 2002, EziBuy raised new equity and debt to fund the acquisition of the database and brands of its largest Australian competitor, Myer Direct. Myer Direct was the Coles Myer group’s catalogue business, selling women’s apparel and home and gifts products. Direct Capital also supported EziBuy’s acquisition of 50% of children’s wear retailer Just Kids, which specialises in clothing for children aged from 0 to 8 years. EziBuy has become an Australasian business with the majority of its sales denominated in Australian dollars. It has proven its ability to successfully manage trans-Tasman growth. Outcome In early 2007, Direct Capital sold its stake in EziBuy along with significant shareholder innovations to an Australian private equity group. The company continues to grow strongly.	EziBuy Limited	1999 & 2002	Established in Palmerston North in 1978, EziBuy Limited has grown to become one of Australasia’s largest and most progressive multi-channel retailers.
Business Moore Australia manufactured, marketed and sold business forms, customer communication systems, data management systems and associated equipment to 11,000 customers in Australia. Moore had 5 principal plants and owned or operated dedicated plants on customers premises under facilities management contracts. It was the largest player in its industry in Australasia with a 25-30% market share. In 1998 Moore Australia’s parent company Moore Corporation (a Canadian listed company) decided for strategic reasons that it wanted to sell Moore Australia. In December 1998 Direct Capital led the management buy-out and acquired a 25% stake in Moore Australia alongside management and other co investors including 3i Group plc. Strategy Following the successful exit by Moore Corporation the strategy was: To acquire synergistic businesses to lessen competition and utilise Moore capacity Focus on the opportunity to boost margins. Moore operated well below Australasian industry norms of 6-8% Outcome As the result of a buy-out offer to all shareholders, Direct Capital sold its shareholding to a new management group in November 2001.	Moore Australia Limited	1998	Moore Australia manufactured, marketed and sold business forms, customer communication systems, data management systems and associated equipment to 11,000 customers in Australia.
No Bio yet	Moore New Zealand Limited	1998	......
Business Tasman manufactures, markets and distributes various building products supplying the resident, commercial and industrial building industries. The businesses include Insulation and Roofing operations in New Zealand, Insulation, Sinkware and Flooring operations in Australia and Roofing operations in USA. Direct Capital Partners invested NZ$6.55 million in Tasman Building Products in April 1998 in conjunction with two private equity co-investors as part of a trans-Tasman management buyout from Carter Holt Harvey Limited by existing management. At the time the purchase set a benchmark for buyout deals by financial investors in Australia and New Zealand. The size of the deal and its complexity, with three businesses in Australia and two in New Zealand, set this management buyout apart from others. As the business included a significant presence in New Zealand, Direct Capital were able to provide other investors with extensive industry and commercial insight at the time of acquisition and on-going. Strategy The objectives under new ownership and empowered management were to: Improve operational efficiencies particularly with regard to working capital management Continue to grow the business. Outcome As a result of the success of the business, significant debt reduction and a positive sector environment management were able to complete a secondary buyout in September 2001.	Tasman Buidling Products Limited	1998	Tasman manufactures, markets and distributes various building products supplying the resident, commercial and industrial building industries.
Business Eftpos NZ Ltd is the country’s leading player in the rental, installation and service of Eftpos terminals. Eftpos operates a multi-product business model, supplying any of five brands of Eftpos terminal available in New Zealand to customers. Strategy In 1997 Direct Capital Partners made an investment to support its continued expansion. Direct Capital believed that Eftpos was a well managed company with an excellent brand. It had demonstrated an efficient and extensive distribution infrastructure and utilised leading edge software technology to deliver exceptional customer service. Outcome In June 2000, Eftpos was sold to ANZ.	Eftpos	1997	Eftpos NZ Ltd is the country’s leading player in the rental, installation and service of Eftpos terminals. Eftpos operates a multi-product business model, supplying any of five brands of Eftpos terminal available in New Zealand to customers.
Business Established in September 1989 as the distributor in New Zealand for General DataComm Corporation of the USA, the OPEN Group is a Wellington-based company that designs, manufactures and integrates solutions that enable network service providers to deliver Internet / e-Commerce services to their customers. The OPEN Group built a significant Australasian based research and development capability that created competitive advantages through building internationally competitive products while operating in a lower cost environment. Both Telecom New Zealand and Telstra (Australia) are significant customers that drive a major part of the R&D program. The OPEN Group provided products and services to both the network service provider and enterprise network markets with a focus on complex high-value projects. The core products at the time of Direct Capital’s investment were ISDN, IDSL, E1 and HDSL local loop access products used by telecommunications companies to provide digital network services to their leased line customers. Direct Capital supported a management buyout of OPEN Holdings Limited in September 1997.	Open Holdings Limited	1997	The OPEN Group is a Wellington-based company that designs, manufactures and integrates solutions that enable network service providers to deliver Internet / e-Commerce services to their customers.
Business Ryman Healthcare Ltd was founded in 1984 by John Ryder and Kevin Hickman with a clear objective - to become the leading provider of healthcare facilities for the elderly in New Zealand. Ryman’s core activities are the development, construction, and operation of integrated retirement facilities for the long stay care of the elderly. Facilities include retirement villages, resthomes, and hospitals. Ryman’s customer base is those aged between 75 and 84 which is the sector of the elderly care industry experiencing the most dramatic population growth. Strategy Ryman’s activities were originally confined to the South Island of New Zealand until an injection of NZ$15m in February 1997 by Direct Capital and Ngai Tahu Equities Ltd, which allowed Ryman to expand into the North Island and commence development of two new retirement village complexes. The expansion led to Ryman more than doubling its after tax profit to NZ$6.2m for the March 1999 financial year. Outcome Ryman raised NZ$25m by way of an IPO in July 1999 to expand its operations in the North Island, listing on the New Zealand Exchange (NZX). Ryman Healthcare has continued to expand strongly and has been one of the strongest performers on the NZX in recent years. Its market capitalisation now exceeds $1.25bn.	Ryman Healthcare Limited	1997	Ryman Healthcare Ltd was founded in 1984 by John Ryder and Kevin Hickman with a clear objective - to become the leading provider of healthcare facilities for the elderly in New Zealand.
Business Communicado was best known for its production of what was New Zealand’s highest selling film, Once Were Warriors, but its earnings were in fact generated from a much broader base than just film and TV production. Its biggest business was in-flight entertainment for airlines, followed by corporate videos and education, and domestic TV. Strategy Direct Capital invested new capital into the business to fund growth opportunities in in-flight entertainment, corporate videos, international TV and Singapore. Its investment gave Communicado the financial capability to undertake larger projects. Outcome Direct Capital sold its stake in Communicado in 1998 to an international private equity group.	Communicado	1996	Communicado was best known for its production of what was New Zealand’s highest selling film, Once Were Warriors, but its earnings were in fact generated from a much broader base than just film and TV production.
Business Genesis Research and Development Corporation Ltd is a research based biotechnology company, with a primary aim of making new discoveries in the fields of immunology and plant compounds. At the time of initial investment, the major areas of research included: The search for cytokines and their role in several types of tuberculosis, arthritis, asthma, psoriasis and lupus. The development of vaccines effective in the prevention of tuberculosis. Strategy Genesis followed the standard US model in its early years, endeavouring to generally have financial resources on hand to meet its capital requirements for two years. Direct Capital Partners invested NZ$2.75m for a 13% equity interest in May 1996 and was the first New Zealand financial investor on the shareholder register. Outcome Direct Capital exited in September 2000 upon Genesis' listing on the New Zealand Exchange (NZX).	Genesis Research and Development	1996	Genesis Research and Development Corporation Ltd is a research based biotechnology company, with a primary aim of making new discoveries in the fields of immunology and plant compounds.
Business Pacific Flight Catering is one of two air catering businesses operating in Auckland and provides in flight meals for number of the leading airlines that operate in and out of Auckland airport. When London based conglomerate P&O announced a restructuring and a return to its core business, it was clear that its flight catering operation in New Zealand would be sold. An MBI team was assembled, exclusivity negotiated and the acquisition of Pacific Flight Catering (PFC) completed in April 1996.	Pacific Flight Catering	1996	Pacific Flight Catering is one of two air catering businesses operating in Auckland and provides in flight meals for number of the leading airlines that operate in and out of Auckland airport.
Business Blue Star was established by New Zealand technology investor, Eric Watson, in 1991. Blue Star, at the time of investment, had two main operating divisions, Blue Star Office Products (BSOP) and Blue Star Office Automation (BSOA). BSOP was New Zealand’s market leader in office supplies while BSOA focussed on office machines and telecommunication hardware. Blue Star focussed on a strategy of consolidating fragmented ownership in the Australasian market to become Australasia’s largest multi-branded office product and automation re-seller. Strategy In 1995, Blue Star was successful in acquiring the Customer Premises Equipment (CPE) business division from Telecom. Direct Capital’s investment facilitated the acquisition of this business and follow-on acquisitions during 1995 and 1996. The acquisition of Telecom’s CPE division proved to be the catalyst for Blue Star’s rapid growth from 1995. This division was responsible for the provision of CPE services to approximately 10,000 small and medium sized businesses. Outcome Direct Capital worked closely with Blue Star through its follow-on investments and was instrumental in implementing new IT and financial reporting initiatives and the appointment of a new CFO. Blue Star Group was successfully merged with US Office Products in 1996.	Blue Star Group Limited	1995	Blue Star was established by New Zealand technology investor, Eric Watson, in 1991.
Business The history of Nobilo in New Zealand goes back to the early 1940's when the Nobilo family landed in New Zealand. They settled in Huapai, West Auckland, situated in the North Island of New Zealand, and started planting vines in 1943. Subsequently, Nobilo created a modern winery at Huapai which covered all its processing requirements and the business had worldwide potential for the Nobilo’s wines under the Nobilo and White Cloud brands. Strategy The overall strategy was to grow Nobilo into a NZ$50 million business both organically and by acquisition. From 1995 Direct Capital Partners injected a total of NZ$4.5 million of new equity to support the vision of the founding shareholders. This capital also enabled a joint investment in National Liquor in February 1996 alongside BRL Hardy, Australia’s second largest wine company. In May 1998 Nobilo acquired Selak Wines and merged with National Liquor to create one of New Zealand’s largest integrated wine businesses. Outcome In December 1998 Nobilo went on to float shares on the New Zealand Stock Exchange and raised $7.0 million of new capital. Nobilo merged with BRL Hardy in June 2000.	Nobilo	1995	The history of Nobilo in New Zealand goes back to the early 1940's when the Nobilo family landed in New Zealand. They settled in Huapai, West Auckland, situated in the North Island of New Zealand, and started planting vines in 1943.
Business PC Direct manufactured, distributed and supported personal computers under its own brand in New Zealand. Its sales channel was the direct, phone-based, channel by-passing the reseller network. Commencing business in 1989, the company grew from revenues of NZ$18m in 1993 to NZ$45m in 1995 when Direct Capital invested. This growth was leveraged off the company’s integrated system – linking design, inventory, production, sales, despatch, service and accounting. The systems developed by PC Direct provided one of the company’s main competitive advantages. Strategy Direct Capital Partners’ investment was the first financial investor funding introduced to the company, providing the expansion capital required to expand its New Zealand operation and also to acquire the PC Direct business in Australia. Outcome Following the acquisition of the Australian business, PC Direct was merged with US Office Products in 1996. Prior to divestment by its founding shareholders and Direct Capital, PC Direct held the number one market position in the desktop personal computer market and number two behind Compaq in the total PC market.	PC Direct	1995	PC Direct manufactured, distributed and supported personal computers under its own brand in New Zealand.
Business Robinhood is a manufacturer and distributor of Robinhood branded rangehoods, supertubs and ironing centres for the New Zealand and international markets. Alongside the company’s founder, Direct Capital first became involved with the company in May 1995 with an initial $4 million investment by Direct Capital Partners. Managing Director Steve Bootten then joined with Direct Capital in 1999 to complete a succession management buyout. Robinhood reflects how succession management buyouts can lead to a successful transition for the founder and create shareholder value for all parties. Strategy The initial investment allowed the company to acquire the Robinhood brand in Australia and add ironing centres as a new product. Management and shareholders then worked jointly to help create a successful and vibrant business, developing strong market positions in New Zealand, Australia, the United States and Europe. Under the succession buyout the company’s initiatives of growing Supertubs and Ironing Centres in Australia and the United States, respectively took several years to develop and required significant additional investment by the new shareholders. Outcome As a result of an offer by a trade buyer to all shareholders, Robinhood was successfully sold to ALESCO Corporation Ltd in March 2003.	Robinhood Limited	1995	Robinhood is a manufacturer and distributor of Robinhood branded rangehoods, supertubs and ironing centres for the New Zealand and international markets.
Business Sky City is New Zealand’s premier gaming and entertainment company, with gaming and cinema interests throughout New Zealand and Australia. In 1995 it was a single casino operation in Auckland New Zealand. At that time the Sky City complex was under construction, the licence/regulatory issues were completed, a statutory monopoly period had been negotiated, and the business being established was an exact replica of successful models offshore. In July 1995 Direct Capital Partners invested NZ$12.3m in the purchase of existing shares in Sky City, representing a 3.0% interest. Strategy Sky City owners, Brierley, wished to sell down existing equity in the unlisted company. Although it was an unlisted company and did not fit the mandate perfectly, Direct Capital was able to assist with the preparations for the listing of the company on the NZX. Outcome During 1996 Direct Capital Partners sold its shares on the NZX through a series of on-market transactions. The investment return to Direct Capital was 1.5 times invested capital and an IRR of 84%.	Sky City	1995	Sky City is New Zealand’s premier gaming and entertainment company, with gaming and cinema interests throughout New Zealand and Australia.