Earth moves down under

GS Private Equity and Pacific Equity Partners have teamed to back earthmoving equipment maker Emeco in the largest Australian private equity transaction of 2004.

Earthmoving equipment provider Emeco International has been sold to a consortium comprising Australian private equity firms GS Private Equity and Pacific Equity Partners for almost A$500 million (€285 million; $382 million).

The transaction, reported by Dow Jones Newswires to have a value of approximately A$500 million, is the largest private equity transaction in Australia in 2004.

Perth-headquartered Emeco was 79 percent owned by Dallas-based Darr Equipment. In the 12 months to June 30, the company reported a net profit of A$23.2 million.

Emeco, which sells earthmoving equipment such as excavators, dump trucks and bulldozers, has operations in Australia, Indonesia and the US.

GS and Pacific Equity have formed a 50/50 joint venture to acquire Emeco, beating off reported interest from other private equity groups including The Carlyle Group and CVC Asia Pacific.

Commenting on the transaction to Dow Jones, Pacific Equity managing director Paul McCullagh was quoted as saying: “Every private equity firm in Australia looked at this one. In two to three years’ time this is going to become a much more global story. We aim to double in size over the next two to three years.”

Although the two firms have not invested alongside each other before, McCullagh said they were now working on another transaction.

Sydney-based private equity firm Pacific Equity Partners has in excess of A$500 million of funds under management and focuses on buyouts in Australia and New Zealand.

GS Private Equity has approximately A$750 million in funds under management. Since 1986, GS Private Equity has closed over 23 acquisitions involving total aggregate funding in excess of A$1.9 billion.