South Yarra boutique Equion Capital is out with the biggest mandate in its short life - seeking a buyer for one of the country’s biggest prefab modular building makers.
Equion Capital, set up by a few former KPMG advisers last year, is shopping the modular building maker as “Project Panton”; a company that reported $183.1 million revenue and $25.5 million EBITDA in the 2022 financial year. Connex Box House
Modscape CEO Jan Gyrn in one of his company’s pre-built module apartments. Justin McManus
The advisers said Panton was founded in 2006, based in Melbourne, had become Australia’s leading modular building maker and used a “Design for Manufacture and Assembly” approach to building, ensuring quicker, cleaner results for clients.
The flyer, seen by Street Talk, said Panton oversaw everything from a building’s design to delivery, had a 6.5 acre manufacturing hub and employed more than 50 staff.
The key stats all matched up nearly with a company called Modscape, based in Melbourne’s Brooklyn and owned by its CEO Jan Gyrn and director Stefan Seketa, according to regulatory filings.
Equion Capital told interested parties it was appointed on the potential investment by a strategic investor and selldown by shareholders. It is understood to have signed a bunch of growth-minded PE firms and trade players to confidentiality agreements, to kick start an auction.
The advisers made a seven-point pitch, starting with Panton’s 15-years experience, attractive unit economics and track record delivering projects, and moving to its DfMA approach, sector tailwinds, management team and $1 billion-plus project opportunities pipeline.
They said Panton had delivered more than 500 projects, operated in seven Australian states and territories and was active across nine industry sectors. And apparently its DfMA approach, where it makes lightweight units in its factory before transporting them to the client’s site, lowered carbon emissions by up to 60 per cent, cut project waste by up to 90 per cent, saw 45 per cent faster build times and reduced costs by as much as 20 per cent.
The business was said to be operating at a 19.2 per cent gross profit margin, and grew revenue at 50.2 per cent a year for the past three years (on a compound annual growth rate basis).
Interested parties will be keen to test all the claims - and there were quite a few. Street Talk can only imagine what’s in the information memorandum and management presentations.
While it’s early days, analysts reckon the business could be worth a few hundred million dollars, thanks to its growth and asset (land) backing.
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