Since its inception over sixteen years ago, nem has assisted a wide range of businesses with their funding requirements, helped prepare businesses for the transition of ownership to related and third party purchasers, guided the financing options associated with such transactions and also assisted to secure private equity for expansion. This assistance is usually guided by the firm's Divestment and Investment Assessment.
DIVESTMENT & INVESTMENT
For those businesses facing the succession issues which loom large across the private business landscape of Australia and New Zealand, nem has developed a Divestment Investment Assessment (DIA) which provides owners with an objective independent assessment of the saleability of their business and an indicative market valuation based on a variety of scenarios.
The DIA process has access to multiple layers of market intelligence and a wide range of prospective purchasers through a number of strategic and direct commercial alliances with specialist firms and funds.
The following case studies are referenceable examples of the firm's assistance.
The founder of Pixalux (John Matyear) was a former client of nem and a respected entrepreneur that invented a structural light panel which does not require a frame, utilises evolutionary twelve volt LEDs and is capable of diffusing superior light to the surfaces of the panel without generating heat.
Having worked with John Matyear in the edge lit signage business nem immediately understood the significance of the invention and went about assisting with the Patent applications and prototypes.
Once proven commercially nem helped to bring together a small group of sophisticated investors to raise $1 million and assisted the business to secure a regional government grant of $500,000 to establish a small manufacturing facility which is capable of manufacturing panels for bespoke solutions and larger volumes of standard panel sizes.
nem has also assisted to drive the strategy of securing licensed manufactures that are capable of manufacturing large quantities of panels in highly automated and controlled environments, as opposed to investing in large scale green field manufacturing facilities which would require significant capital investment and take time to come on stream.
To understand the significance of the panel, it is envisaged to be an integral part of standard retail displays across all major retailers globally and, with patents secured in all major markets, a significant player in the illuminated shop display sector.
A major International Manufacturing Group has been signed and commenced manufacture in Australia, and have the capability of rapidly expanding their production capability into North America, Europe and China. Licensees have also been secured in New Zealand, Malaysia, Philippines and Thailand.
To date the majority of nem’s services have been provided on a success fee basis so as not to diminish the effectiveness of the capital provided by investors and Partners currently hold a 30% equity interest in the business in addition to one Board position and one Advisory role.
The business has multiple royalty income streams, has multiple layered patents and is capable of attracting significant interest from multinational conglomerates once it’s products are specified locally by one or two national retailers.
Given the diverse range of shareholders with varying expectations and time lines there is a genuine opportunity for the fund to participate in providing pre-IPO or trade sale expansion capital.
COOK BEAUMONT GAMING UNIT TRUST
The wider Cook Beaumont Group is an experienced hotel and gaming operator with over 30 years experience and an asset base spanning over 25 venues. nem has been involved with the group since 2010, providing banking and finance support.
The Victorian Government altered the process surrounding the issuance of gaming authority licences with effect from 2011, meaning that licences would be owned and operated by the venues as opposed to the previous arrangement where they were owned by Tabcorp or Tattersalls. An opportunity was identified to acquire licences in capped regional areas and to acquire suitable venues for redevelopment, including new gaming machines and to ultimately sell the venues for a capital gain. nem was active during the initial discussions providing advice on structure, funding options and capital raising.
The Cook Beaumont Gaming Unit Trust was born with nem taking a driving role in Information Memorandum completion, financial structure and forecasting, capital raising and debt raising, while the Cook Beaumont team went about securing the licences and suitable venues in regional areas of Victoria (Geelong, Ballarat, Warrnambool and Shepparton).
The Trust raised over $7.5M in capital, which was further supported by $13.7M of debt. Funds were applied on the acquisition of the four venues, full redevelopment of each including installation of gaming machines, and in three of the venues, the subsequent acquisition of the freehold asset.
The role of nem has evolved into one of financial advisory, debt management and investment advisory, while ensuring that the investor pool is kept well informed of their investment by way of regular updates and quality financial reporting. nem services are provided by a combination of success fee and management fee in order to minimise pressure on the cashflow of the trust during its development phase. nem has three positions on the advisory board and one Director role. nem partners have invested around 15% of the required capital from personal resources.
Management emphasis is now on operational improvements to ensure maximum value once the venues are placed on the market for sale over the next few years. Potential exists to further enhance investor returns by splitting off the freehold assets and retaining strong performing leasehold assets in order to provide investors with a strong mix of capital gain and longer term cashflow/capital gain returns.