Anacacia Capital has ended an active year with two new deals from its latest private equity fund.
The firm has acquired a majority stake in Careers Training Group, an Australian vocational education company created by the Selmar Institute of Education and Managed Corporate Outcomes, according to a company statement.
The firm did not disclose the financial details of the transaction, but usually invests in small-to-medium-sized private companies with revenue of between A$20 million (€13 million; $18 million) and A$150 million, with earnings of between A$3 million and A$15 million.
At the same time, Anacacia has supported the acquisition of the Oxford Group by K Care Healthcare Equipment, which will also be funded by the firm’s second private equity vehicle.
Earlier this year, Anacacia Fund II was oversubscribed and closed at A$150 million, according to the firm.
“The investments follow several months of exclusive due diligence and negotiations. We’re delighted with how the Fund II portfolio is developing,” Jeremy Samuel, managing director of Anacacia, said in a statement.
Samuel told Private Equity International that while he couldn’t disclose the deal value, “Market demand for mid-market deals is high so we are being very selective.”
However, not all GPs agree. Andrew Petering, managing director of Wolseley Private Equity, another Australian mid-market firm, said in his private equity forecast for 2014, “This segment of the market is becoming increasingly attractive as there is less competition for deals, better pricing, greater growth prospects and higher returns.”
He adds that Wolseley, which is currently raising its third fund targeting A$300 million, sees strong investment potential in the education, healthcare, IT and financial services sectors.
“2014 will be a good year for raising and investing funds focused on the lower mid-market in Australia,” he explained, confident that LPs will see the opportunity.
“Business structures and customs make India a difficult investment destination, while in China, although it is easy to deploy capital, it has proved very difficult to extract. This is propelling investors towards developed Asia markets such as Australia, Singapore and Korea, where the Asian growth story can be accessed without direct investment into China and India.”
Australia has had a good year for exits, with IPOs by private equity-backed companies reaching a five-year high, according to data from the Australian Private Equity and Venture Capital Association and EY.
Anacacia has also had two exits this year, including the July sale of Rafferty’s Garden to soap maker PZ Cussons in a £42.2 million (€49.3 million; $64 million) deal. In March, the firm also sold its majority stake in Australia-based Home Appliances for A$22 million to McPherson’s, a listed Australian housewares marketer, PEI reported earlier.