Melbourne-based Industry Funds Management acquired a 34 percent stake as a co-investor in the buyout of financial services company Scottish Pacific Debtor Finance, according to an IFM statement.
IFM's stake represents roughly A$25 million (€16.8 million; $22.3 million), Steven Lipchin, IFM executive director for private equity, told Private Equity International.
Sydney-based Next Capital and Scottish Pacific management together bought the remaining 66 percent for A$50 million, bringing the deal total to A$75 million, Lipchin said.
In February, Scottish Pacific had several unsolicited offers and an acquisition of the company was valued at A$120 million ($108 million), according to Mergermarket data.
Banks are either unable or unwilling to support SMEs. which are looking more toward the non-traditional bank lending space
Steven Lipchin, IFM executive director, private equity
Scottish Pacific operates in Australia and New Zealand, providing financial services and short-term credit facilities to enterprises with annual sales ranging from $500,000 to $300 million.
It also serves businesses in those two countries that cannot access traditional banking facilities.
“Banks are either unable or unwilling to support SMEs, which are looking more toward the non-traditional bank lending space,” Lipchin said. “We see it as a growing sector.”
“Scottish Pacific is much better equipped to deal with companies in that sector and it has built a sustainable business,” he said, adding that the company has been on a growth trajectory and he expected that to continue.
The investment was made through IFM Australian Private Equity Fund IV (APEF IV) on behalf of a separate account managed by IFM for one of its industry fund investors, the statement said.
APEF IV invests in privately-held companies where IFM can identify and pursue strategies of business growth and/or transformation. The Fund, according to the statement, delivered a 12-month performance of 15.9 percent for the year to 30 June 2013.
IFM manages A$46 billion across four asset classes – infrastructure, listed equities, debt investments and private equity. The firm invests on behalf of institutional investors and is owned by 30 Australian pension funds.