Baby boom drives $300m buggy business toward acquisitions
Baby buggy company Phil & Teds is on the hunt for acquisitions to add to its business, which is already worth $300 million by one estimate.
NBR approached Phil & Teds founder Campbell Gower for comment after hearing rumours that the company was for sale.
But Mr Gower says he’s not in any discussions to sell his 69.4% shareholding, and Phil & Teds is in fact looking for a complementary product line or sales and distribution channel to purchase.
“We could bolt on to them or they could bolt on to us,” Mr Gower says.
“There’s a bunch of things on the desk at the moment but I wouldn’t say anything that immediately makes sense.”
Mr Gower says the company has no net debt, so “something reasonably chunky would be an option.”
Last year Phil & Teds bought Hubco, a Christchurch-based roof rack manufacturer.
The Phil & Teds share register also includes private equity fund Pencarrow, which has a 27.2% stake that it acquired in May 2006.
The AMP Pencarrow Fund’s backers include the NZ Super Fund.
The fund is a joint venture with AMP Capital Investors, which also owns a stake in the AMP Private Equity Real Estate Fund II.
This fund, which owns the 5.2ha Newmarket development site currently occupied by Lion Nathan, just sold half its assets to the Abu Dhabi Investment Authority amidst reports that it was under financial strain.
Mr Gower said he did not think Pencarrow was looking to sell its Phil & Teds stake.
Pencarrow did not respond to requests for comment.
A report available from the Companies Office shows Pencarrow has valued its stake at $80.83 million in its most recent accounts.
This values the entire Phil & Teds company at just under $300 million.
The business was founded in Wellington and is now a major exporter, with stockists in more than 15 countries.
Mr Gower said the company was expecting to do around $US150 million in retail sales this year.
Phil & Teds does not retail its own products; rather, it sells to wholesalers and distributors.
Mr Gower said the business was mindful of the potential impact of a recession on retailers and was being more cautious about collecting money it was owed.
But, he said, Phil & Teds operates in a reasonably stable industry.
“People are still having babies.
“If anything, they’re having more – it’s cheaper entertainment than going out.”
Mr Gower said Phil & Teds was hoping to grow its market share as a result of the tough economic conditions even though its products are relatively expensive, as more customers may turn to a better quality product that will not require replacing.