Castle Harlan in Australian pharma sale

Castle Harlan Australian Mezzanine Partners, along with a group of investors, has sold New Price Retail to Australian Pharmaceutical Industries in a deal valued at A$167m.

New York private equity shop Castle Harlan, through it Australian affiliate Castle Harlan Australian Mezzanine Partners (CHAMP), along with a group of investors has New Price Retail, a pharmaceutical , health and beauty-aid retailer, to Australian Pharmaceuticals in a deal worth approximately A$167 million ($123 million; €98 million).

The consortium, which also includes ABN AMRO Capital, Investec Wentworth Private Equity, and company management, had originally acquired New Price in a management buyout in February 2003 for A$107 million, according to a statement.

The investor group also announced that New Price’s chief executive officer will step in as chief executive of API, a position that has been vacant since last December.  API is a drug and medical products manufacturer and distributor listed on the Australian Stock Exchange.

In the statement, Castle Harlan said the sale of New Price resulted in CHAMP’s offshore group of investors realizing a return of $13.5 million (€10.7 million) on its investment of $8.3 million (€6.6 million), or 1.6 times its original investment in less than a year.

New Price has more than 300 stores in Australia, approximately 140 of which are company-owned.  For the most recent 12-month period, it had revenues of A$371.8 million, up 17.7 percent from the corresponding period a year earlier.

Castle Harlan co-founded CHAMP back in 2000. CHAMP currently manages or advises approximately A$850 million in funds for private-equity investment in the Australasian region, including the CHAMP I funds, with A$500 million in committed capital.  The CHAMP I funds were raised in 2000 and are now approximately 60 percent invested.

Earlier this year, CHAMP sold Penrice, the largest producer of soda ash in Australia, and realized a return of three times its original investment.

In August, CHAMP floated portfolio company Bradken, a manufacturer of mining and rail products, and raised A$245 million.