Andrew Bevin, NBR:

Direct Capital and ACC have collectively bought half of Mondiale, New Zealand’s largest privately-owned freight forwarder, for a confidential sum.

The purchase was Direct Capital’s first investment from its newest fund, Direct Capital VI, which raised $425 million in March.

The fund focuses on companies with annual revenues of between $50m and $350m that are looking to fund new growth initiatives, Trans-Tasman expansion, or to manage a change in ownership. Mondiale provides freight forwarding, logistics, and warehousing solutions for a broad range of New Zealand and international customers.

Direct Capital managing director Ross George said Mondiale had always been a growth business over the past 30 years and that pattern looked likely to continue.

“Getting a partner like Direct Capital in to help with that organic growth makes sense from their side.”

Established in 1989, Auckland-based Mondiale has offices across New Zealand, Australia, China and the Philippines and has more than 600 staff.

Mondiale chief executive Ray Meade and founders John Sargent, Phil Bramwell and Grant Ryder will stay in their current roles in the business, and remain shareholders and executive directors of the company.

Mondiale’s founders and management will continue to hold the remaining 50%, which George said was an important part of retaining good management.

Before the Direct Capital and ACC investment, the founders each held around a third each of the company while Meade held 2.8%.

George said Direct Capital had prior experience in the logistics space and had been in discussions with Mondiale since before Christmas, but the deal had been pushed back by Covid-19.

The pandemic didn’t have an adverse impact on the logistics sector, which functioned as an essential service through the strict level four lockdown.

Meade said in a statement that the investment would help the company “grow its New Zealand customers and expand its international customer base, especially in Australia and Asia.”

Direct Capital was established in 1994 and is New Zealand’s largest private equity firm, having raised more than $1.7 billion in capital for investment into private companies, including pre-IPO Ryman Healthcare and Scales Corporation as well as Bayleys, Beca, and Perpetual Guardian.