M&A Partners advise on successful bid for Neta Industries – Australian Financial Review

Tuesday, 2nd April 2013

PPI sale raises $18m, saves 170 jobs


PPI Corporation the failed Brisbane pipe and irrigation products manufacturer that was previously majority-owned by the private equity arm of Lazard has been sold by the administrators for roughly $18 million.

Under the deal, privately backed The Lansell Group snapped up the Neta Garden Products business and associated wholesale and irrigation businesses.

PVC pipemaker and supplier David Moss Group purchased the balance of the business which included the mining, infrastructure and construction operations. The pair worked together on their bids but there is no common ownership.

The sale saved about 170 jobs out of a total staff of 275 and the proceeds provided sufficient funds to pay in full all outstanding entitlements to employees that would not transfer with the business.

The return to unsecured creditors would be about 25 in the dollar. There was not expected to be any return to equity holders. Secured lender GE Commercial will get back in full its $10 million exposure.

According to its website,PPI has annual revenue of more that $100 million. Established in 1979, PPI was forced into voluntary administration in January after a suffering a cash flow squeeze, with 65 per cent of its revenue coming from the mining and infrastructure area which was affected by projects being delayed or not going ahead at all.

PPI has offices in Brisbane, Perth, Adelaide, Melbourne, Townsville, Sydney and Hobart, as well as a factory and sales office in Christchurch, New Zealand.

Lazard initially invested in PPI in 2007, taking a 30 per cent stake. It later invested in tranches, taking its holding to 68 per cent.

PPB Advisory was appointed voluntary administrator in January.

Lansell was advised by M&A Partners while David Moss Group took legal advice from DibbsBarker.



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Acquisition of Neta Garden and PPI Wholesale and Irrigation Products Business – MEDIA RELEASE

M&A Partners have advised the Lansell Group on the successful acquisition of the Neta Garden Products business and associated Wholesale and Irrigation businesses from PPI Corporation.

PPI Corporation appointed PPB Advisory as voluntary administrators on Jan 15 2013. Lazard Carnegie Wylie was a major shareholder (68%) having initially invested in PPI in 2007 at a 30% stake.

The Administrators sold PPI’s operations to two parties:

The Lansell Group A privately-owned Australian company with a a long and successful history in metal manufacturing, distribution and marketing.

David Moss Group An Australian manufacturer and supplier of PE and PVC pipes, fittings and underground ventilation systems to Australian and international markets has purchased the remaining business, including the mining, infrastructure and construction (MIC) operations.

The proceeds provide sufficient funds to pay in full all outstanding entitlements to employees that will not transfer with the business, administrators also estimate a return to unsecured creditors in excess of 25 cents in the dollar.

Stephen Longley of PPB Advisory commented: We are confident that with new owners in place, the respective businesses of PPI Corporation will grow and prosper as they continue to serve their respective markets.

Ric and Jeremy Lansell, co CEO’s of Neta Industries and the PPI Wholesale and Irrigation divisions commented, We see the acquisition of Neta and the wholesale and irrigation products as a fantastic opportunity for us to operate a business in which we know the key customers, markets and the manufacturing requirements needed to ensure the business is a success and continues to grow.

The business will trade as Neta Industries Pty Ltd, it will have manufacturing operations in Brisbane and Adelaide and warehousing in all major capital cities. With the acquisition, approx 120 existing jobs have been preserved.

The Lansell’s commented, M&A Partners provided the Lansell Group with strategic buy side advice across valuation, business assessment and deal structuring that made the transaction a success and enabled us to successfully acquire the asset in a highly competitive sale process.


Mark Hardgrave
Email: mhardgrave@mapartners.com.au
Mob: 0415 533 776