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PEP bids for Pacific Hydro

The Australian firm is investing from Fund V that closed at A$2.1bn this month.

Australia’s Pacific Equity Partners (PEP) is bidding for renewable energy company Pacific Hydro through its fifth fund, it is understood.

First round offers for the Melbourne based company tipped to fetch about A$2 billion ($1.4 billion; €1.3 billion) were due on 18 September.

Pacific Equity Partners V launched in May 2013 targeting A$2 billion and closed this month at a hard cap at A$2.1 billion. It was raised alongside a $1 billion co-investment vehicle, according to PEI’s Research & Analytics Division.

PEP V will be supplemented by co-investment from a handful of sophisticated limited partners,it is understood. In terms of both size and investment strategy the fund follows PEP’s earlier vehicles.

PEP funds specialise in buyouts and late stage capital expansion in companies in Australia and New Zealand that have an enterprise value of A$300 million, according to PEI Research. Funds II, III and IV are partially liquidated.

Pacific Hydro is a wholly owned subsidiary of Industry Funds Management, an Australian investment management company. It is expected to achieve revenues of $175 million in 2015, according to a report.

A company spokesperson declined to disclose any other potential acquisitions.

Earlier this month, PEP agreed to buy Academic Colleges Group (ACG), the Auckland-based private educator, for an undisclosed sum. Reports said the price tag was about $530 million. ACG runs seven schools and several tertiary training centres in New Zealand, as well as a school in Indonesia and one in Vietnam.

That followed PEP’s agreement to buy Manuka Health, a company based in Te Awamutu, New Zealand, for an undisclosed sum. Reports said the purchase price was $NZ110 million ($69.8 million; €61.9 million).

Manuka Health was founded in 2006 and exports 90-plus products based on propolis, royal jelly, bee pollen, and manuka honey to 45 countries. It has annual turnover of more than $NZ50m.

In March, PEP also acquired local food manufacturing company Pinnacle Bakery for A$250 million, according to local media reports, as reported by Private Equity International.

Pinnacle has a leading position in the local baked products and bakery ingredients market, with 3,500 customers throughout Australasia, and is a major supplier to supermarkets, food service and bakery retailers, according to PEP.

PEP is the largest private equity firm in Australia and New Zealand with more than A$6 billion equity funds under management. Established in 1998, PEP funds have made 24 operating company investments, and more than 60 add-on acquisitions at the company level.