Next Capital is one of Australasia’s oldest private equity firms and has a rich history of developing great growth businesses

In December 2014, Next Capital completed an investment in Infinite Care. Infinite Care was established in partnership with an experienced management team to build a business in the Australian residential aged care market.

Infinite’s seed assets include five high performing facilities in South Australia (totalling 380 beds) and 250 licenses in South East Queensland. Infinite’s strategy will involve establishing regional clusters of facilities under strong asset-level and corporate management. Infinite aims to capture upside through acquisitions, developments, refurbishments and operational improvements.
Investment highlights include:

• Attractive sector demographics with growth potential for high quality operators
• Highly defensive earnings base
• Attractive seed assets
• Material pipeline of growth opportunities
• Experienced management team
• Attractive entry valuation, strong risk-adjusted returns and downside protection
• Infinite was sold to a financial investor in October 2017

In July 2013, a consortium led by Next Capital acquired a controlling interest in Scottish Pacific (“ScotPac”). ScotPac is Australasia’s largest non-bank debtor finance provider, offering financial products including factoring, invoice discounting and import trade finance to Small and Medium-sized Enterprises for whom traditional banking facilities are either unavailable or uneconomic.

The investment was predicated on:

• ScotPac’s leading market position in a niche segment with significant barriers to entry
• low-risk growth potential associated with the business’ ability to leverage strong underlying long-term demand in the core debtor finance market
• incremental growth potential associated with the (then) newly established FactorONE and Trade Finance divisions, with further upside to the extent the business could establish a white-labelled debtor finance service offering for domestic and/or international banks
• a very strong, experienced and incentivised management team, with a history of delivering strong year-on-year growth through economic and credit cycles

During Next Capital’s investment period, Next Capital worked closely with the management team of ScotPac to develop and execute on a strategic plan which enhanced shareholder value:

• bolstering the management team to allow the CEO to work ‘on’ rather than ‘in’ the business
• developing new products and channels
• broadening the company’s funding base to establish a sustainable, diversified and lower cost platform
• undertaking strategic acquisitions, including the acquisition of Bibby Financial Services Australia (# 2 independent debtor finance provider), GE’s debtor finance book (# 3 player) and Suncorp’s debtor finance book

In September 2011, Next Capital backed incumbent management in the buyout of Aero-Care, Australia’s largest independent provider of outsourced airport flight support services, including customer service, check-in, baggage handling, ramp handling and ancillary services (www.aerocare.com.au). It services major domestic and international airlines at numerous ports across Australia, typically under long term contracts.

Investment highlights included:

• Exposure to long term market growth in aircraft movements, passenger numbers
• Growing outsourcing trend, particularly for non-core functions
• A track record of strong growth whilst maintaining high customer service levels at industry leading levels of productivity

Next Capital worked closely with the management team to create value by:

• Successfully growing share by port and by customer
• Focused on port economies of scale
• Built critical mass for international work in major ports
• Developed whole fo ground handling solutions to provide transformational change in customer’s cost abse
• Acquired SkyCare (NZ) to diversity customer and geography
• Bolstered the management team with the recruitment of a COO

Aero-Care was sold to a financial investor in July 2014.

In May 2012, Next Capital acquired a material interest in GoBus, an operator of urban, school and charter bus services throughout New Zealand, with leading market positions in four of the six largest public transport markets (Hamilton, Napier, Tauranga and Christchurch).

Investment highlights included:

• Strong competitive positioning as a low-cost, flexible bus operator
• Solid earnings stream stemming from long term government contracts with limited revenue and margin risks
• Pipeline of growth opportunities given the fragmented nature of the New Zealand bus industry and the impact of regulatory initiatives
• Experienced management team with proven capability in driving organic and inorganic growth

Next Capital worked closely with the management team to create value by:

• Transforming the business from being a regional operator to a national business through the acquisition of four smaller operators
• Successfully established operations in Auckland, New Zealand’s largest bus market, to provide a platform to improve competitiveness on future tenders
• Established return of capital thresholds to measure asset performance and enhance investment decisions
• Strengthened the management team through the addition of a Business Development Manager with a focus on executing on the growth plan

Go-Bus was sold to a financial buyer in September 2014.

In December 2010, Next Capital led the recapitalisation of the Discovery, one of the largest owners and operators of caravan parks in Australia.  Discovery was in financial distress as a result of an aggressive acquisition strategy that was heavily reliant on bank debt. The recapitalisation resulted in Next Capital becoming the largest individual shareholder in the business.

The investment thesis was predicated on the assumptions that the business was fundamentally strong and that there were opportunities to grow the business via improving operating efficiency, development of the existing portfolio and through acquisition.

Next Capital worked closely with the management team to create value by:

• Acquiring 8 properties at attractive yields for a consideration of approximately $120 million
• Investing approximately $50 million in high returning development expenditure
• Divesting 8 non-core properties at attractive valuations

These initiatives drove strong earnings growth, delivering compound annual EBITDA increases of approximately 50% with limited incremental external capital required and a balanced approach to risk.

Next Capital completed the sale to a financial investor in February 2014.

Vitaco is an Australasian based manufacturer, distributor and marketer of highly recognisable and innovative Sports Nutrition, Vitamins & Supplements and Health Food & Beverages brands.  Vitaco also has a well-established and growing international business with a focus on Asia, the Middle East and Latin America. Vitaco was established in 2007 following the merger of Healtheries and Nutra-life.

Investment highlights included:

• Favourable long term consumption dynamics
• Strong brands in all key channels
• Innovation and new product development
• Integrated supply chain
• High cash flow generation with minimal capital expenditure requirements

Next Capital worked closely with the management team to create value by:

• Secured 100% ownership of Aussie Bodies, #1 in the Australian sports nutrition market
• Acquisition of Musashi securing Vitaco’s #1 position in the Australian sports nutrition market.
• Consolidated and upgraded both the manufacturing and warehouse facilities. Subsequently in-sourced bar manufacturing capability, delivering a material improvement in cost base
• Established a presence in China through the development of uniquely Australian and New Zealand products that are popular amongst Chinese consumers
• Organisational restructure to align business on category rather than functional basis resulting in improved accountability and more efficient use of resources
• Rationalisation of supplement brands and re-launch into Australian pharmacy
• Bolstered the senior leadership team through the recruitment of the CEO, CFO and GM Operations

Vitaco was successfully IPO on the ASX in September 2015.  Vitaco was subsequently taken private in December 2016 by a Chinese based consortium comprising Shanghai Pharmaceutical Holdings and Primavera Capital.