Pacific Equity Partners backing Kiwi retailer public-to-private

Pacific Equity Partners, an Australian buyout group, is joining forces with the founder of The Warehouse Group, New Zealand’s largest listed retailer, in a take-private proposal.

Pacific Equity Partners, a Sydney-based buyout firm founded by former Bain & Co consultants, is backing Stephen Tindall, founder of The Warehouse Group, to privatise the retailer listed in Australia and New Zealand.

The Warehouse Group, a general merchandise retailer, operates 83 stores in New Zealand and 126 in Australia as well as a 42-store stationery chain. 

The proposed public-to-private transaction, through which Tindall is offering to buy the shares he does not hold at NZ$5.75 a share, values the enterprise at NZ$1.8 billion ($1.2 bn; €936m), according to a statement.

Tindall holds approximately 86 million shares, the equivalent of a 27 percent stake in The Warehouse Group. His foundation holds an additional 21 percent stake, which will be purchased by the proposed public-to-private sale, said a source familiar with the transaction.

The offer is equivalent to a 10.2 times multiple of The Warehouse’s current financial year’s EBITDA, and 12.4 times its EBITA, according to the statement from Tindall’s office. The valuation is “above the high end of recent comparable retail transactions,” Tindalls said in the statement.

Tim Sims, managing director at Pacific Equity Partners said: “Our role in this transaction really is as a capital partner. Pacific Equity Partners’s key objective is to support Stephen, provide financial backing for his plans and add our retail expertise where needed.”

Stephen Tindall and his financial sponsor are advised by Caliburn Partnership and Chapman Tripp. Pacific Equity Partners is part of a syndicate that has approached Coles Myer with a A$17.4 billion takeover proposal that was recently dismissed by the second-largest Australian retailer as too low.