Private equity firm Anacacia Capital has taken a majority stake in LEDified Lighting, chaired by former Victorian premier Jeff Kennett, which will help triple the company’s revenue as it aggressively grows.
LEDified chief executive Suren Chandrajit said the cash injection, which will see Anacacia take a majority stake, would help the Victorian company expand further in NSW and Queensland. He said strategic acquisitions would also be targeted.
“The lighting industry is fragmented; there are a couple of large companies, which we have almost been set up to disrupt,” Mr Chandrajit said.
“There are smaller companies, and mum-and-dad operators and there is a big pool of opportunities in terms of acquisition.”
The lighting market in Australia is about $1.4 billion and LED lighting as an energy-saving proposition is opening up a new retrofit market that is tipped to drive an extra $15bn of revenue in Australia over the next seven years.
Anacacia, which has invested $200 million in private companies, has previously helped grow established profitable SMEs such as Yumi’s and Rafferty’s Garden.
The company invests in profitable, strong-cashflow companies, typically with revenues of $20m-$150m.
Jeremy Samuel, managing director of Anacacia Capital, said LEDified was a “fantastic fit” for the company’s aim of backing strong management teams in established industries. “The LEDified team has an outstanding offering that can deliver material savings and quality to property owners. It’s an exciting opportunity,” he said.
Mr Chandrajit said Mr Kennett became involved with the company through AFL connections.
LEDified sponsors the St Kilda AFL football team and Mr Chandrajit approached Mr Kennett, who was previously president of Hawthorn Football Club, about the club forming a casual association with the company, which led to him taking on the chairmanship.
Mr Kennett said the Anacacia investment meant LEDified could continue to grow.
“Importantly, the partnership with Anacacia will bring skills to LEDified’s management team that will help drive our nationwide growth,” he said.
“The rising cost of energy and increased focus on strong cost management has supported the strong take-up of energy-saving products in Australia.”
LEDified, founded in mid-2012, has grown rapidly to become Australia’s largest LED lighting specialist employing more than 80 people and another 60 subcontractors.
“We recognise with a market growing as fast as it is, it’s beneficial to have institutional capital to support growth rather than growing off our limited balance sheet and personal wealth,” Mr Chandrajit said. “I met Jeremy socially and was seeking advice on private equity and that discussion turned into due diligence from him and the investment.”
The chief executive said there was a strong consumer focus, both business and residential, on saving energy, adding that LED lighting was one of the best energy-saving technologies that could be implemented.
Source: The Australian