$50m backpacker empire sold

By PAUL PANCKHURST

Launched 13 years ago in Auckland's Fort St, a backpacker business empire was valued at close to $50 million in a sale sealed yesterday.

The buyer of ACB Holdings - the initials stand for Auckland Central Backpackers - is Australian private equity fund Ironbridge Capital.

It did not say how much it was paying but said the enterprise value of the business - the combination of equity and debt - was close to $50 million.

ACB has 1200 beds in four complexes in Auckland, Queenstown, Pahia and Rotorua, with associated bars, travel agencies and internet cafes.

Its managing director, Campbell Shepherd, 38, is taking a minority stake by reinvesting some of his share of the proceeds. Some staff may also invest.

The two founders, Neville Chandler and Mark Draskovich, and a third investor - "Rich List" member Humphry Rolleston, of Christchurch - are leaving with an unspecified number of millions.

Shepherd will keep running the business.

Asked if the deal marked a coming of age for the backpacker industry, Shepherd said it was "starting to get some of the respect we deserve" after years of lip service from tourism bodies.

He said more than 300,000 backpackers visited New Zealand each year, spending $1.3 billion.

ACB and Ironbridge indicated the private equity fund's shareholding in the company would be 75 per cent to 80 per cent.

Kerry McIntosh, of Ironbridge, said the fund would exit in three to five years via a sale to another business or a sharemarket float.

The private equity fund has bought into a growth story backed by property assets.

ACB's expansion includes hundreds more beds in Auckland and Rotorua, a plan for a new complex in Taupo, and ambitions for Australia and the South Pacific.

Shepherd said the company had property - including a prime Auckland location on Queen St - worth $28 million. It is no longer on Fort St.

Asked why the other investors were leaving, Shepherd said they now had different priorities.