Propel exits herbal health product company

The Australian private equity firm has good news for investors as it raises its third fund booking a 2.5x cash return on its investment in MediHerb.

Propel Investments, a Sydney-based private equity manager, has sold its 40 percent stake in Australian herbal health products provider MediHerb to Thompson Group, a distributor of health supplements.

MediHerb produces herbal products and supplies them to Australian customers. It also exports to Canada, New Zealand, South Africa and the US.

Peter Dowding, a managing director at Propel Investments, said in a statement: “The sale of MediHerb will realise more than 2.5 times our investment cost.”

Propel Investments told PEO that it realised A$20 million ($18.27 million; €11.5 million) from the sale of its stake in the company.

The investment in MediHerb was made in April 1999, giving the firm a 2.5 times cash return from this exit in nine years.

The firm is currently raising its third fund, and the first since it spun out of Deutsche Bank’s Australian private equity business division in the latter half of 2007. It also manages two funds totaling about A$300 million that were raised under the DB Capital Partners name.

Propel said that it is raising A$275 million for its third fund, but did not provide further details.