New ownership for Waikato Milking Systems
27 February 2014
New ownership for Waikato Milking Systems
Majority shareholder UPC Capital and Managing Director John Anderson have unconditionally sold Waikato Milking Systems NZ Ltd to Tainui Group Holdings (TGH), Ngāi Tahu Capital and Pioneer Capital with settlement on 31 March 2014.
UPC Capital in conjunction with management financed a management buyout of the company in 2001 and since that time the company has experienced significant growth. In 2013 after many approaches over several years, the shareholders engaged PwC to run a sale process. With considerable interest from many overseas and New Zealand corporations, TGH, Ngāi Tahu Capital and Pioneer Capital were the successful bidder.
Waikato Milking Systems will continue as an independent designer, manufacturer and supplier of dairy technology to the New Zealand market and over 30 dairy producing countries. The company remains in 100% New Zealand ownership, a factor that is valued by many customers, given this country’s reputation for dairy sector expertise and product innovation.
The three institutional investors will each hold a third of the equity in the partnership with senior management also to hold a minority stake.
Waikato Milking Systems CEO Dean Bell is looking forward to working with this new group of owners. “We’ve had a great run so far and our new shareholders will provide us with an excellent platform for the next chapter of growth,” says Bell. “They have a good understanding of our industry, significant investment capability and experience with New Zealand exporters, all of which we will leverage. We look forward to continuing to develop product innovations that bring a range of benefits to dairy farming businesses, including greater efficiencies.”
Managing Director John Anderson is also looking forward to the future. “We’ve had many approaches over the years. However in making the decision to sell, we believe our new shareholders represent the best opportunity for us to continue to do what we do well – stay close to our customers and deliver innovative and reliable products backed up by excellent service. Our partnership approach to business is well aligned with their style of investment.”
The Waikato Milking Systems investment is also significant for Waikato-Tainui. “It’s the first step in our diversification programme and a continuing commitment to the Waikato region,” says TGH CEO Mike Pohio. “This company is one of our local success stories. It has not only built a strong domestic business but it’s also making great strides on the export front. Our investment will help build on that success.”
Chief Executive of Ngāi Tahu Holdings Corporation (NTHC), Mike Sang, says Waikato Milking Systems fits well within the NTHC investment portfolio. “Ngāi Tahu Farming is making a strong commitment to the dairy sector and the use of innovative products and technology to achieve sustainability and production goals is a core part of our rural strategy. The benefits are many and varied – for Waikato Milking Systems, our own farming operations and our Capital subsidiary.”
The Waikato Milking Systems investment ticks a lot of boxes for Pioneer Capital. “We focus on high performing people and businesses with strong growth prospects, particularly in international markets. These are clearly evident at Waikato Milking Systems” says Randal Barrett, Pioneer Capital Managing Director. “We’re looking forward to working with management and our Iwi investment partners, with whom we have an existing relationship through our private equity partnerships.”
About Waikato Milking
• Started out as part of Alex Harvey Industries, a large New Zealand manufacturing company, and later became part of forestry products conglomerate Carter Holt Harvey, before being separated as a standalone specialist dairy systems and technology business
• Develops a range of innovative products, including composite rotary platforms and smart range of sensing technologies
• Caters for any farming type including large-scale intensive 24-hour milking operations and pasture based farming, with dairy systems for cows, goats and sheep
• Grown to become largest supplier to the New Zealand market, with more than 30 dealers nationwide
• Also exporting to over 30 countries, with its own operations in the United States and distributors in Australia, the United Kingdom, Europe, South Africa, Latin America and Asia. www.waikatomilking.co.nz
Tainui Group Holdings (TGH)
• Investment arm of Waikato-Tainui
• Assets of $738M in 2013; net profit $45M; operating profit $20.8M
• Owner of The Base in Hamilton, developer and 70 percent owner of Novotel Auckland Airport ; 82 percent of Novotel Tainui and Ibis Tainui
• Multiple retail, commercial, industrial and residential property investments and developments. www.tgh.co.nz
About Ngāi Tahu
• Subsidiary of Ngāi Tahu Holdings Corporation (NTHC)
• Holds investments that include an investment in Ryman Healthcare and a shareholding in the Kaikōura Whale Watch operation
• One of four NTHC subsidiary companies. (The other three are Ngāi Tahu Seafood, Ngāi Tahu Property and Ngāi Tahu Tourism.) www.ngaitahuholdings.co.nz
• Investor in New Zealand businesses that produce high-value products and are focused on growth in large international markets
• Invests and manages capital for a range of New Zealand institutions and private investors. www.pioneercapital.co.nz