Private Equity Firm Targets Mining Services Market
Article by Adam Orlando
Perth private equity firm InGlobo is looking for more acquisitions in the mining services sector after its debut purchase of Integrated Industrial Mining Supply.
InGlobo founding managing director Bruce Davis said the firm will use the purchase of the Maddington-based company to gain a foothold in the state’s burgeoning mining services sector. The Subiaco-based fund bought IIMS in April for a price believed to be between $5 million and $15 million.
InGlobo was formed in January by Western Australian businessmen Mr Davis, Tim Moore and Amu Shah to take on the ‘lower end’ of the private equity market, with a focus on nurturing small and emerging businesses to become significant privately owned organisations.
Mr Davis, a WA Business News 40under40 winner and former McDonald’s state manager, said InGlobo was aggressively looking to acquire a substantial suite of mining services companies in WA.
“Most private equity firms are only taking on transactions $50 million and above, so there’s a big gap in the $1 million to $50 million space that people aren’t playing in,” he said.
“I think that there’s certainly an appetite out there for people to invest in emerging businesses and few people really hop into this space, so we’re really operating in a niche market.
“Private equity firms tend to play at much higher levels these days and it’s not like there’s a lack of opportunities, the opportunities have really come off in the last 12 to 18 months.”
InGlobo seeks to secure between 51-70 per cent of each of its investments, where the firm’s three directors then serve as non-executive directors. The remaining owner of each investment is typically appointed managing director and either retains significant equity, or a newly appointed managing director is required to purchase a substantial equity share to manage the investment.
In the case of IIMS, founder Rod Hall will remain a shareholder, with former Coventry regional manager Rod Cox appointed managing director. Mr Cox has more than 20 years’ experience in the automotive, industrial and mining supply industries; and with a newly-formed board, he will lead plans to double revenue and profits at IIMS in the next three years.
“The resources market is really buoyant at the moment and I believe what sets Integrated Industrial Mining Supply apart is its ability to get product on-site within 24, 48 or 72 hours,” Mr Cox said.
Mr Moore is a former Hartley Poynton chief executive who jointly acquired mine planning software company Surpac Minex Group in 2003. In 2005, he became chairman of Numan’s Group Ltd, which invests in software and IT.
Mr Shah has a suite of WA business investments in his portfolio, including a chain of large-format stores retailing bulk items, grocery outlets and an independently-owned office consumables operation.
Mr Davis has 20 years’ experience in multinational and domestic corporations in retail, sales and marketing.