Ebos buys Masterpet for $105m plus debt

Ebos Group has bought privately owned Masterpet  for about $105million plus Masterpet debt.

It is the largest acquisition for the listed healthcare marketer, wholesaler and logistics provider  and follows the purchase and integration of pharmaceutical wholesaler and healthcare distributor PRNZ, four years ago.

In a statement to NZX, Ebos says agreement has been reached with Wellington-based Masterpet to acquire the shares, wholly-owned brands and trading interests of the group in New Zealand and Australia.

EBOS and Masterpet were introduced by Forsyth Barr’s investment banking team.

Ebos will debt fund the acquisition supported by a strong balance sheet, funds on deposit and strong operating cashflow.

“Ebos has been searching for a complementary acquisition and after thorough consideration of Masterpet’s performance and market position, we believe this to be a significant growth opportunity, “ Ebos chairman Rick Christie says.

Ebos  will continue to operate Masterpet as a dedicated business under its own name with all executives and staff continuing.

Masterpet provides branded animal healthcare, pet accessories and premium foods throughout Australasia and is well known to consumers with sales to veterinary clinics, pet specialty stores and supermarkets. The company represents Proctor & Gamble pet care brands, Eukanuba and IAMS and also owns several house brands including grocery brand Vitapet.

“Masterpet is well positioned in one of the fastest growing global business sectors with excellent management, modern distribution facilities and networks, and a strong brand portfolio,” EBOS group managing director and chief executive Mark Waller says.

“We are acquiring Masterpet from a consortium of private interests including Brent Wootton of the founding Wootton family, and other investors.

He says that as part of the transaction, EBOS will also acquire a 50% interest in the Animates retail business – a specialty retailer of animal healthcare products with a retail chain of 20 stores in New Zealand.

The Masterpet brand was established by H.J. Wootton in 1961, as a pet supplies wholesaling company and then led in succession by brothers Wayne and Brent.  Brent Wootton will continue to work with the business, as he has since “retiring” 2 years ago.  Masterpet employs just under 300 staff, with a New Zealand head office, distribution centres in Wellington and Sydney, sales offices and showrooms in Wellington, Auckland, Christchurch, Sydney, Brisbane and Melbourne.

Mr Waller says, “We believe Masterpet is a good strategic fit for Ebos in a growth sector and with the added benefit of not being reliant on government funding.”

“Whilst the animal health focus is a new direction from our human healthcare businesses, there are many similarities to the Ebos business. Healthcare for pets is also a high-quality brands-based activity and like Ebos, Masterpet has a technology-based backbone and a service focus on customers. We both have core competencies in sales and marketing of internationally sourced products, logistics and warehousing, wholesaling and specialised support for front-line services.”

Ebos is projecting a revenue contribution of $170m and ebitda of $20m in first full year to June 30, 2013. These earnings projections are inclusive of the Masterpet half-share of Animates, if consolidated.

Ebos employs around 800 staff across Australia and New Zealand, with the group’s head office in New Zealand. The group has sales offices and distribution centres in Auckland, Wellington, Christchurch, Sydney, Melbourne, Brisbane, Perth and Hobart. Group member PRNZ operates a pharmaceutical sales and distribution network in eight New Zealand cities. In the Pacific Region there are Ebos sales offices at Port Moresby (PNG), and Suva (Fiji).

In the year ended 30 June 2011, Ebos – which has 4800 shareholders - reported revenue of $1.34bn and ebitda at $41.1m. The company paid dividends totaling 51.5 cents per share including a special dividend of 20 cents.