Fund manager Anacacia Capital wants to add some spark to the electrical infrastructure distribution sector in Australia. It is meshing together two competitors - as its Acculec unit joins together with rival All Round Supplies - to create a business which has more clout and a bigger balance sheet.
The deal is expected to create one of the country's largest distributors of electrical infrastructure products with combined annual revenues north of $50 million, investor sources said.
All Round Supplies chief executive Earl Palfrey will become a substantial shareholder alongside Anacacia and other management.
The businesses will continue to run as they are, with two brands and two leaders. Acculec boss Sheldon Upton will be group CEO, with Palfrey at the helm of ARS.
"The Acculec business is a perfect fit for the ARS model," Palfrey told Street Talk. "The merged organisations provide a national footprint which will enable the new group to provide greater opportunities for our customers, staff and suppliers."
Upton said ARS' management team was "highly capable", having built the business in a competitive market.
"Both our organisations have strong growth aspirations and fit together well based on operating in the same market sector and with similar business models," Upton said.
Anacacia did not reveal financial terms around the transaction.
However, the Jeremy Samuel-led private equity firm typically invests in small-medium enterprises with revenues of at least $20 million and earnings before interest, tax, depreciation and amortisation of at least $3 million.
Australian Financial Review