Direct Capital Invests in Cavalier Wool Holdings Limited
Direct Capital, through its Direct Capital IV and Pohutukawa II funds, has acquired a 25% interest in Cavalier Wool Holdings Limited (“CWH”), New Zealand’s largest wool scouring company and a larger service provider to New Zealand’s wool industry.
Operating through its trading subsidiaries, Napier based Hawkes Bay Woolscourers and Timaru based Canterbury Woolscourers, CWH cleans and processes greasy wool for domestic and export markets on behalf of New Zealand wool buyers and carpet manufacturers.
Direct Capital joins existing shareholders, NZSX-listed carpet manufacturer Cavalier Corporation Limited and ACC. The current board, comprising David Ferrier, Cavalier’s Wayne Chung and Victor Tan, and ACC’s representative Martin Goldfinch, will be expanded to include Direct Capital’s representative Ross George.
The investment by Direct Capital is a strong endorsement of the New Zealand wool industry which produces more than 25% of the world’s “strong wool” fibre. Cavalier Wool Holdings is a large operation by international standards and a global leader in its sector. It is also one of the world’s largest producers of wool grease, a by-product which is further refined to produce lanolin, an ingredient with growing demand for use in cosmetics and pharmaceutical products.
The investment in Cavalier Wool Holdings is the third investment from the Direct Capital IV fund which raised $325 million in December 2009 for investment into New Zealand private companies.
“We were particularly attracted to Cavalier Wool Holdings as it is a critical service provider to New Zealand’s wool industry which is set to benefit from growing demand for natural, sustainable wool fibre products. CWH is the only independent scourer in New Zealand, it has an exceptional management team, and has excellent long-standing relationships with wool buyers and exporters.” said Direct Capital’s Ross George.
There will be no operational changes to the company but with the addition of Direct Capital as a shareholder, the company is well-placed to continue funding its growth initiatives in both scouring and wool grease extraction.