Private equity buy values Pacific Print at $220m

Australia's private equity industry yesterday claimed another scalp, buying a half share in Pacific Print in a deal valuing the firm at $220 million.

The deal, which will see Gresham Private Equity inject about $30 million of new equity into the rapidly growing printer for its stake, follows similar transactions in the retail and office technology sectors.

Private equity firms have come into fashion, especially in Australia, where they have raised billions.

They typically make large investments in companies not performing to their full potential or in need of cash. They then cut costs and restructure their targets before selling them on.

As the deals are funded with debt, they make big returns on the relatively small amounts of capital invested.

Pacific Print was to float but shelved its plans in September after only a luke-warm response from the public markets.

Pacific Print chairman Sandy Maier said the cash would help fund the company's planned expansion in Australia. A float remained a long-term possibility.

Pacific Print was formed in 2002 and, after rationalising 12 acquisitions, now operates seven New Zealand print companies and three in Australia. Annual turnover is more than $170 million and it employs more than 700 people.