By LESLEY SPRINGALL
ANZ Private Equity has invested $10 million and taken a 43% stake in franchised home-help group Green Acres.
The $6m debt/$4m equity injection should help Green Acres directors' Andrew Chisholm and Logan Sears realise their expansion plans, said ANZ Private Equity director Steve Byrom.
Chisholm and Sears said they were "flattered" by the big Australasian bank's attention and the capital had already enabled them to complete three new acquisitions: the 124-franchisee, home-handyman group Hire A Hubby and its nine-strong sister firm Mobile Mums; and two Auckland-based Green Acres master franchises, North Shore Lawn Mowing and Auckland-wide Car Valet.
So far the company has re-acquired three master franchises - each controlling a number of individual franchisees in one area - and plans to buy at least five more.
Given that Green Acres' head office was in Auckland , it made financial sense to buy back several of the Auckland-based master franchises, said Sears.
Chisholm and Sears bought out business partners, Green Acres founders' Adrian and Sharon Kenny in March 2003 for an undisclosed seven-figure sum. The group then had about 700 franchisees, offering 12 services from lawn mowing and dog washing to ironing and painting, and turned over more than $40m Now it has 57 master franchisees and 743 franchisees, which between them turn over more than $55m a year.
Byrom said his team approached Sears and Chisholm in June this year after they canned plans for a $6m backdoor listing, using the shell of computer software firm Selector Group.
ANZ was attracted to Green Acres because of its "great household brands", he said. "If you go for anything small in New Zealand , that's what's likely to make it work: good brands."
With plans to acquire Hire A Hubby already in place, Byrom's team was particularly interested in Chisholm's and Sear's desire to grow the Green Acres franchise group's umbrella business into a larger holding company straddling several well known franchise brands, he said.
Hire A Hubby is the first, but there's another "half-a-dozen" franchise firms they're interested in buying, said Sears.
"Our target acquisition strategy revolves around buying key brands in the franchise market. We have some quite tough selection criteria based on sustainable sales, brand integrity and the fit with our overall philosophy. We're not interested in businesses in a distressed state."
The company expects to make another announcement early next year, said Sears.
Given ANZ's capital injection, float plans for Green Acres' holding company have been put back another three years. ANZ Private Equity was likely to exit its stake at that time, said Byrom.
Other ANZ Private Equity investments include commercial printer Pacific Print, agriculture technology company Tru-Test, Wellington-based software firm Synergy International and Northland transport company United Carriers.
ANZ appointee Sandy Maier will join Green Acres board as an independent director.
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