ABN Amro Capital’s (ABN’s) management buy-in of two family-owned transport businesses is a good example of a developing trend where two or more companies in the same sector are brought together under a new holding company, according to ABN’s lead legal adviser on the deal.
Minter Ellison advised ABN on the acquisitions of Scotts Refrigerated Freightways and McColl’s Transport, which occurred simultaneously in Sydney and Melbourne and resulted in the creation of one of Australia’s leading providers of niche road transport and storage services. The transaction was valued at more than $180 million.
Each business will continue to operate under its existing management structures, with a view to leveraging the benefits of operating scale, synergies and cross-sell opportunities that arise under common ownership.
Minter Ellison handled the legal due diligence, share sale agreements and senior debt documents between the purchaser, lead arranger BOS International (Australia) Limited and ANZ Investment Bank. Head of Minter Ellison’s private equity group, Martin Bennett, led the team, which also included partners Callen O’Brien (private equity), John Mosley (finance), Nathan Deveson (tax) and Jim Fox (workforce issues).
Bennett said such ‘roll up’ transactions were becoming more common. Traditionally, private equity firms would buy one company or business and grow them by acquisition over time.
“But they are now buying two at the same time so that they start off, right from the beginning, with two businesses in the same sector,” Bennett said.
He said the roll up format added complexity to the deal because essentially two transactions were being conducted together.
Minters ran a large team on the acquisitions, with a core of eight lawyers supported by the legal due diligence teams, and a core team working on the transaction documents.
Mallesons Stephen Jaques acted for BOS International (Australia) Limited and ANZ Investment Bank. Corrs Chambers Westgarth acted for the vendors of the two businesses.