Goldman Sachs JBWere makes 10x cash in secondary

The private equity arm of Goldman Sachs JB Were has sold Hirepool, an equipment rental company in New Zealand, to Next Capital in a NZ$172 million secondary buyout.

The private equity division of Goldman Sachs JBWere has made 10 times its money from selling Hirepool, an equipment hiring business in New Zealand.  It sold the company to Next Capital, an Australian private equity firm set up in 2005 by former Macquarie executives, for NZ$172 million ($106m; €84m).

This is our third divestment from Hauraki Private Equity Fund 1. The return from this sale is bigger than the fund itself.

Paul Chrystall, Goldman Sachs JB Were

Tenby Powell, Hirepool’s managing director, repurchased 20 percent of the company’s shares and will stay with the company to expand the business further under Next Capital’s oversight.

According to Paul Chrystall, head of private equity at JBWere in Auckland, his firm led a consortium to finance a leveraged buyout of Hirepool three years ago that valued the company at NZ$43.5 million. JBWere took a 51 percent stake.

Paul Chrystall said: “This is our third divestment from Hauraki Private Equity Fund 1. The return from this sale is bigger than the fund itself.” Hauraki Fund 1 is a NZ$22 million vehicle established in 2002.

Chrystall and his team are currently investing Hauraki Private Equity Fund 2, which closed on NZ$76 million in 2004.

Sandy Lockhart, a founding partner of Next Capital, said: “There is still more growth potential in Hirepool. We plan to double the business in the next three to four years, expanding geographically and via a number of acquisitions, as well as vertical integration.” Lockhart added that an IPO was a possible exit strategy for the business.

Next Capital , which is based in Sydney, raised A$265 million for a debut fund that aims to invest in businesses requiring expansion capital, and small to mid-market buyouts with enterprise values of A$50 million to A$200 million.