Quadrant Private Equity Explained

Quadrant Private Equity
Type:Proprietary limited company
Founder:Chris Hadley
Former Name:Quadrant Capital
Location:Sydney, Australia
Products:Private equity funds

Quadrant Private Equity (also simply known as Quadrant) is an Australian private equity investment firm based in Sydney, Australia. The company was founded as Quadrant Capital in 1996 by Chris Hadley.[1] By 2022, the Managing Partner was Jonathan Pearce.

Quadrant hosts multiple investment funds which invest in businesses across a wide array of industries and sectors, specifically targeting management buyouts and growth capital transactions.[2] The first three Quadrant funds delivered a collective 37% return between 1996 and 2006.[2]

The firm has owned or co-owned a number of well-known Australian companies including, Affinity Education, Barbeques Galore, Darrell Lea, Journey Beyond, Fitness First, and Timezone.[3] [4] [5] [6]

Quadrant is Australia's largest fitness centre operator through acquisitions of brands including Fitness First, Jetts Fitness and GoodLife Fitness.[7] Quadrant has floated a number of its interests on the Australian Securities Exchange (ASX) including Kathmandu, Virtus Health,[8] Isentia,[9] APN Outdoor, Bapcor (previously Burson Auto Parts) and Estia Health.[10]

Notable investments

Quadrant bought Kathmandu Holdings in 2006 for NZ$275 million, floating the company on the ASX three years later for around AU$350 million.[11]

In 2007, Quadrant acquired Australian-owned fast food restaurants Red Rooster, Chicken Treat and Oporto in deals collectively worth A$240 million, forming Quick Service Restaurant Holdings (renamed in 2017 as Craveable Brands). The group of 620 stores was sold in 2011 to Archer Capital for A$450 million.[12]

Quadrant purchased a half-stake in advertising company APN Outdoor in 2011, before acquiring the remaining stake from APN News & Media in 2013 for around A$70 million.[13] It was listed on the ASX in 2014.[14]

In 2012, Quadrant and Ironbridge Capital formed BBQSAM Holdings after acquiring retailers Barbeques Galore and Amart Furniture.[15] [16]

Quadrant purchased Zip Industries in 2013[17] from its founder, and after abandoning an IPO offloaded the company to Culligan in 2017 for around US$550 million.[18]

In 2014, Quadrant purchased a 45% stake in Canberra Data Centres for A$140 million, selling the businesses two years later.[19] The deal was recognised with an award from The Australian Private Equity and Venture Capital Association Limited (AVCAL).[20]

In 2015, Quadrant purchased Queensland-based pet food company VIP Pet Foods for A$410 million. After renaming the company The Real Pet Food Company, Quadrant sold the business to a foreign consortium including Singapore's Temasek Holdings and Chinese firms Hosen Capital and New Hope Group for A$1 billion in 2017.[21]

In 2016, Quadrant acquired restaurants owned by chef Neil Perry through its Urban Purveyor Group for a reported A$65 million, creating the Rockpool Dining Group.[22] Quadrant acquired a majority stake in Great Southern Rail in 2016, operator of the Indian Pacific and The Ghan train journeys, folding the company into its investments in Cruise Whitsundays and Rottnest Express to form tourism company Experience Australia Group.[23] [24]

Also in 2016, Quadrant Private Equity formed Fitness and Lifestyle Group, after purchasing Jetts Fitness, Goodlife Health Clubs, Hypoxi and the Australian arm of Fitness First, becoming the largest operator of fitness centres in Australia.[7] The holding company is partially-owned by Oaktree Capital Management.[25] [26] Queensland-based Go Health Clubs were added in 2017.[27] The Australian arm of Jetts Fitness was divested in 2022, retaining the international Jetts brand.[28]

In 2017, Quadrant acquired a partial stake in gaming arcade company Timezone.[29]

In 2017, Quadrant sold their majority share of Icon Group, Australia's largest oncology provider, in a reported $1.1 billion deal.[30]

Quadrant purchased an 80-90% stake in confectionary company Darrell Lea in 2018 in a deal worth around A$200 million.[31] [32]

In 2019, Quadrant bought auction business Grays Online for A$60 million from Eclipx Group.[33]

In 2020, Quadrant bought the Enterprise business from Arq Group as part of a consortium for A$35 million.[34]

Quadrant acquired Jaybro, a supplier to the construction and infrastructure sector operating in Australia and New Zealand, in March 2022.[35] [36]

Funds

Quadrant Private Equity has operated a total of 9 individual funds.[37]

Fund Years active Capital ($m) of investments
Quadrant Capital Fund No. 1 1996-2007 $50 16
Quadrant Capital Fund No. 2 1998-2008 $75 13
Quadrant Capital Fund No. 3 2001-2009 $125 7
Quadrant Private Equity No. 1 2005-2015 $265 7
Quadrant Private Equity No. 2 2007-2017 $500 5
Quadrant Private Equity No. 3 2010-2020 $750 7
Quadrant Private Equity No. 4 2014-2024 $850 7
Quadrant Private Equity No. 5 2016-2026 $980 5
Quadrant Private Equity No. 6 2017-2027 $1,150 1

Notes and References

  1. Web site: Rock-star reception for Quadrant Private Equity's $1.24b raising . 10 December 2020 . . Sarah . Thompson . Anthony . Macdonald . Tim . Boyd.
  2. Web site: Quadrant Closes USD 500 million private equity fund. 3 May 2007. Private Equity Wire. 20 May 2018.
  3. Web site: 2023-10-13 . Quadrant pauses $1b Affinity auction, eyes ACCC childcare report . 2023-10-18 . Australian Financial Review . en.
  4. Web site: 2023-08-16 . Early obituary for Quadrant’s Jonathon Pearce . 2023-10-18 . Australian Financial Review . en.
  5. News: Carter . Bridget . 17 June 2023 . Barbeques Galore gets cooking with E&P Corporate Advisory . The Australian .
  6. News: Carter . Bridget . 19 May 2019 . Quadrant’s Darrell Lea sale on the back burner . The Australian .
  7. Web site: Fitness and funds - but is fitting in a workout half the work?. Bennet. Michael. 25 August 2017. Westpac. 20 May 2018.
  8. Web site: Virtus Health: Not so healthy. 11 June 2013. Mike. King. Fool. 20 May 2018.
  9. Web site: iSentia Float Values Media Monitoring Veteran John Croll's Holding At $18.4 Million. https://web.archive.org/web/20140610054618/http://www.businessinsider.com.au/isentia-float-values-ceo-media-monitoring-veteran-john-crolls-holding-at-18-4-million-2014-6. dead. 10 June 2014. Business Insider Australia. 6 June 2014. Chris. Pash. 20 May 2018.
  10. Web site: Lessons for participating in private equity floats. 16 June 2017. 20 May 2018. NAB. James. Dunn.
  11. Web site: UPDATE 2-Australian retailer Kathmandu plans $349 mln IPO. Reuters. Denny. Thomas. 19 October 2009. 20 May 2018.
  12. Web site: UPDATE 1-Australia's Archer buys fast food chain for A$450 mln. Reuters. 20 May 2018. 14 June 2011. Victoria. Thieberger.
  13. Web site: APN set to sell outdoor business to Quadrant. 22 October 2013. AdNews. 20 May 2018.
  14. Web site: APN Outdoor close down on first day of trading. Mumbrella. Alex. Hayes. 11 November 2014. 20 May 2018.
  15. Web site: A-Mart and Barbeques Galore sold . 15 August 2012. 20 May 2018. Sunshine Coast Daily. News Corp Australia.
  16. Web site: BBQSAM Holdings Pty Ltd - Profile Company Report Australia. 25 June 2017. IBISWorld. 20 May 2018.
  17. Web site: Michael Crouch – Australia's hot water king dies age 84. Australian Financial Review. Paul. Clearly. 20 February 2018. 20 May 2018.
  18. Web site: US water treatment company buys Quadrant's Zip Industries . 30 June 2017. 20 May 2018. Australian Financial Review. subscription.
  19. Web site: Canberra Data Centres taken over in $800m deal. 19 May 2016. 20 May 2018. IT News. Juha. Saarinen.
  20. Web site: The best Australian private equity deals of 2017. https://web.archive.org/web/20170916004340/https://www.businessinsider.com.au/the-best-australian-private-equity-deals-of-2017-2017-9. dead. 16 September 2017. Business Insider Australia. Chris. Pash. 15 September 2017. 20 May 2018.
  21. News: Real Pet Food Company: Chinese investors gobble up Queensland business targeting four-legged gourmets. 24 October 2017. ABC News. Peter. Ryan. 20 May 2018.
  22. Web site: How private equity swallowed Rockpool. 28 April 2018. Sydney Morning Herald. 20 May 2018. Fairfax Media. Cara. Waters. limited.
  23. Web site: Control of the Indian Pacific, Ghan changes one more time in private equity reshuffle. Sydney Morning Herald. 20 May 2018. 15 September 2016. Fairfax Media.
  24. https://web.archive.org/web/20200918114258/https://thewest.com.au/business/finance/rottnest-express-anchors-new-tourism-play-ng-ya-123258 Rottnest Express anchors new tourism play
  25. Web site: Quadrant expands wellness empire with acquisition of Fitness First Australia. Australasian Leisure Management. 29 September 2016. 19 May 2018.
  26. Web site: Fitness First gyms in new hands. Australian Associated Press. Special Broadcasting Service. 30 September 2016.
  27. Web site: Fitness and Lifestyle Group acquires Go Health Clubs. 27 October 2017. Australian Leisure Management. 20 May 2018.
  28. Web site: Fitness First parent divests franchise division of Jetts Fitness via management buyout. Business News Australia. 26 September 2022. 6 January 2023.
  29. Web site: Perth family behind Timezone adds second player. Sean. Smith. The West Australian. 13 November 2017. 20 May 2018.
  30. News: Icon Group won't slow growth after $1.1b deal . 17 July 2018 . Australian Financial Review . 22 May 2017.
  31. News: Darrell Lea sold to private equity for $200 million; outgoing owner says 'absolutely no job cuts'. David. Chau. ABC News. 16 January 2018. 20 May 2018.
  32. News: Quadrant Private Equity buys Darrell Lea. Thompson. Sarah. 15 January 2018. Australian Financial Review. 15 January 2018. https://web.archive.org/web/20180115151216/http://www.afr.com/street-talk/quadrant-private-equity-buys-darrell-lea-sources-20180115-h0ii22. 15 January 2018. live. Macdonald. Anthony. Moullakis. Joyce. dmy-all. subscription.
  33. Web site: Eclipx share price rockets 28% higher on GraysOnline sale news. James. Mickleboro. Yahoo Finance. 5 July 2019.
  34. Web site: 2020-02-11 . Quadrant Growth Fund buys Arq Enterprise for $35m . 2022-05-06 . Australian Financial Review . en.
  35. Web site: Carcano . Sonia . Quadrant Private Equity’s Acquisition of Jaybro . 2022-05-06 . en-US.
  36. Web site: Croft . Lauren . 2022-03-14 . Jaybro acquired by private equity firm . 2022-05-06 . www.lawyersweekly.com.au . en-gb.
  37. Web site: Quadrant Private Equity Investments. Quadrant Private Equity. 20 May 2018.

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