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WACO INTERNATIONAL SOLD TO CCMP CAPITAL ASIA AND MANAGEMENT CONSORTIUM FOR R5.4 BILLIONLargest Ever Foreign Private Equity Leveraged Buy Out Investment in South Africa and Australia NEWS RELEASE Jan. 16, 2006 -- The shareholders of Waco International Limited ("Waco"), a leading industrial services business with hire, sales and manufacturing operations in Australasia, South Africa and the UK, today announced that they have concluded a sale for R5.4 billion to CCMP Capital Asia (formerly known as J.P. Morgan Partners Asia) and the senior management team led by Royden Vice, CEO of the company. CCMP Capital Asia will be investing through its Asia Fund. The Global Fund managed by J.P. Morgan Partners is also investing in the deal. This transaction constitutes the largest private equity deal in South Africa and Australia to date and highlights a significant flow of capital into South Africa. CCMP Capital Asia and JPMP will join with the management team to expand and grow Waco's market leading position in its two chosen lines of business of forming, shoring and scaffolding and re-locatable modular buildings. The structure of Waco, its subsidiaries, management and staff will remain intact with management keeping a stake in the business. No redundancies are expected as a result of the sale and there are no expected changes in the executive team led by Royden Vice. The company's headquarters will remain in Johannesburg. "We are pleased with the value this transaction has unlocked for shareholders. As previously stated, we were looking to list, but after reviewing CCMP Capital's offer we had to review that decision. There will be a considerable flow of foreign capital into South Africa as a result of the transaction. This substantial investment by CCMP Capital reflects confidence in the South African investment climate," said Royden Vice, Waco's CEO. Stephen King, a Partner at CCMP Capital Asia, said "Over the last three years, Waco has successfully developed itself into a well established and focused industrial services business. Our investment into this company demonstrates our confidence that their excellent financial performance is set to continue. This is our first investment on the African continent and we look forward to rewarding returns. We support Waco's strong growth agenda and anticipate our investment continuing to grow." Management's significant transformation of Waco In 2000, Ethos Private Equity led a consortium buyout of Waco with an enterprise value of R2.4 billion, which at the time was the largest pure private equity transaction in South Africa. The company has undergone major change, realignment and transformation since that date. A new company management team under Royden Vice was appointed in 2002. In 2002, the team introduced a coordinated optimisation programme aimed at overhauling Waco's performance. "The subsequent exceptional performance by Waco management has produced equally exceptional revenue and earnings growth through an acquisition strategy, strong management focus and continuous expansion growth," said Danie Jordaan, Senior Partner at Ethos Private Equity. The disposal of non-core assets was also completed and by the beginning of 2004, the success of these initiatives allowed Waco to pursue a new strategy focused more on growth. This strategy included the pursuit of new customers in new sectors, geographical expansion and extension of product and service offerings into complementary fields. Recent important acquisitions include: * Interlink Support Services, a leading UK R&MB company * Cape Contracts, a leading South African integrated maintenance service provider * Australasian Pacific Limited, a New Zealand scaffolding and forming business Waco earns its revenues primarily through its rental business. The hiring of equipment provides a more predictable stream of income and cash flow than Waco typically generates from its sales business. It is a company with leading positions in attractive markets and well-established and recognized brands, which have been in existence for over 40 years. In terms of financial performance, Waco delivered compound annual growth in EBITDA (earnings before interest, tax, depreciation and amortization) of 27.7 percent to June 30, 2005 (excluding the US operations, which were recently sold). This healthy financial performance has led to strong cash flows providing a strong base from which to pursue its growth strategies. CCMP Capital Asia and the Waco management team will expand and grow Waco's leading market position in its two chosen lines of business of forming, shoring and scaffolding and re-locatable modular buildings. About CCMP Capital Asia (formerly known as JP Morgan Partners Asia): CCMP Capital Asia is one of the largest financial sponsors in Asia with US$2.7 billion under management. CCMP Capital Asia's first fund, the US$1.1 billion Asia Opportunity Fund ("AOF I") was closed in 2000 and was one of the first pan-Asia leveraged buyout oriented investment funds raised for the region. Asia Opportunity Fund II ("AOF II") was recently closed in August 2005 at US$1.59 billion. About JP Morgan Partners: JP Morgan Partners is a leading private equity firm with approximately $11 billion in capital under management as of September 30th, 2005. Since its inception in 1984, JPMP has invested over $15 billion worldwide in consumer, media, energy, industrial, financial services, healthcare, hardware and software companies. With more than 75 investment professionals in five principal offices throughout the world, JPMP is an experienced investor in companies with worldwide operations. Underpinning this platform is a global integrated network, which enables JPMP to draw on expert resources residing within its extensive portfolio and worldwide contact network. JPMP owns Brand Services, another landing scaffolding company based in North America. Back to Press Releases |
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CCMP Capital Asia Ltd. was formed in October 2005. Previously, the firm's management team operated and managed J.P. Morgan Partners Asia, a private equity affiliate of JPMorgan Chase & Co. The historical information and biographies presented reflect the activities of CCMP Capital Asia professionals while managing J.P. Morgan Partners Asia. Nothing contained herein constitutes an offer to sell or a solicitation of an offer to purchase any investments or securities of any investment vehicles. © 2006 CCMP CAPITAL ASIA LTD. All rights reserved. |
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