Navis Capital’s Device Tech rules off $400m debt deal
Pan-Asian private equity firm Navis Capital’s Device Technologies has hauled in $400 million from debt capital markets to refinance existing facilities and, more importantly, to bankroll its M&A ambitions.
Navis Capital’s Philip Latham. Louise Kennerley
Street Talk understands the $400 million was underwritten by Commonwealth Bank and Westpac last week. The two banks have begun reaching out to credit funds to see if they would like a slice of the debt stack. Sources said Kelly Morton’s debt advisory firm Skye Capital oversaw the deal.
It is a clear sign Navis Capital will be out hunting for bolt-on acquisitions in the sector as it approaches its fifth anniversary as Device Technologies’ owner. Navis paid just north of $700 million for the medical supplies business in late 2018, buying it out of a sale process run by Goldman Sachs and Fort Street on behalf of Sydney private equity firm Pemba Capital.
It faced stiff competition in the auction, which also drew out Swiss company DKSH Holdings, trans-Tasman pharmacy supplier EBOS and rival buyout firm Pacific Equity Partners.
Device Technologies is the largest independent provider of medical technology to hospitals and healthcare practitioners in Australia and New Zealand. It was founded in 1992 and now sells more than 200 brands and employs 1000-plus staff across Australia, New Zealand and Asia. Its usual fare includes supplies for orthopaedics, robotics, theatre equipment, surgical solutions, ophthalmic technology, plastic surgery, gastroenterology and cardiology.
Navis Capital deal maker Philip Latham, who has led the firm’s Australian office since 2008, chairs Device Technologies’ board. Day-to-day operations have been led by company lifer Michael Trevaskis as the CEO for the past seven years.
It is a decent-sized business and was expecting $429.3 million in revenue and $57.5 million EBITDA for the 2018 financial year, increasing to $475.9 million and $63.3 million in 2019 and $518.1 million and $72.1 million in 2020. At the time, it was the biggest Australian investment for Navis, which was founded in 1998 and is headquartered in Kuala Lumpur.
The private equity firm has been fairly active on the deal-making circuit this year. In April, it bought a majority stake in disability services player The Caring Group from early backers including Alium Capital. The business runs in-home brands – including Home Caring, Dementia Caring and Premier Care – which were together expected to make $15 million to $20 million in group earnings for the 2023 financial year.
Navis also began a sale process for its Kiwi egg producer and marketer, Mainland Poultry, after six years of ownership. It hired Luminis Partners to shop the business, which makes $NZ45 million ($42 million) annually on the earnings line.
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