VACUUM CLEANER specialist Godfreys has changed hands for the first time in more than 70 years, sold by the Cohen and Johnston families to a consortium of private equity funds
The consortium, comprised of Pacific Equity Partners and CCMP Capital Asia, paid more than $300 million in cash for the company, which was established by the late Godfrey Cohen and John Johnston in the early 1930s.
Holding Redlich acted for Godfreys on the acquisition, while Pacific Equity Partners were represented by Freehills, led by Alistair Donald, and Minter Ellison represented CCMP, led by Marcus Best and Ben Liu.
Corporate partner at Holding Redlich, Michael Linehan, said the sale was an emotional decision for the two families, but both took the view that the time was right to hand it over to someone who could take the business to the next level. He said they actively sought a buyer that would look after the existing staff, recognise the value of the existing senior management, and work with them to take the business forward.
The business runs more than 150 stores and warehouses in Australia and New Zealand, and Linehan said the transaction was complicated for a number of reasons. “For example, the business is made up of a mixture of franchised and company-owned stores.
“The ownership of the store locations added a second level of complexity. Some of the stores are located on properties leased from third parties, others operate from real estate owned by the operating companies and yet others trade from properties owned by entities associated with the Cohen and Johnston families.”
He said that while the interests of the two families were largely aligned, some issues had to be dealt with separately. “Such a transaction, involving several parties on each side with their respective legal and other advisers, always creates logistical challenges,” said Linehan.
“On top of that the owners of the business had not had a great deal of experience in transactions of this nature.
Linehan said the consortium showed that it understood and appreciated the experience and ability of existing management, so the vendors felt very comfortable with the arrangement. “It was a very competitive auction process, a large number of bidders were interested, and as usually is the case, it quickly moved from a number of parties being interested to a couple of stand out parties that we began negotiating very seriously with.
“The result in terms of price was one that the vendors felt very comfortable with.”