Foreign investment in Aotearoa/New Zealand
Overseas Investment Office – March 2018 Decisions
Lee Bell Buys Icebreaker For $288 Million
Lee Bell, Inc (US Public 93.5%, various overseas 2.2%; Canada Public 2%; Switzerland Public 1.6%; UK Public 0.8%) has consent to acquire 100% of Icebreaker Holdings Ltd (Moon Comm Ltd, NZ 22.5%; PPEM Nominees Ltd, NZ 19%; IBH Ltd, NZ 19%; NZ Public 18.3%; K One W One (No 2) Ltd, NZ 9.4%; Jeremy Ross Moon, NZ 6.4%; UK Public 2.7%; US Public 1.8%; Australian Public 0.8%; Germany Public 0.09%; Singapore Public 0.0645%; various overseas 0.02%; North American Public 0.006%) for $288 million.
The OIO states that Icebreaker’s shareholders wished to fully realise Icebreaker’s growth potential and, in order to do that, recognised the need to connect the brand with an established international entity or group for global market access, logistics, and management opportunities. Following a competitive tender process, Lee Bell, a subsidiary of the VF Corporation, was selected as the preferred purchaser. VF Corporation is a US-based global apparel, footwear, and accessory business that operates in and distributes to more than 170 countries.
VF Corporation’s business lines include jeanswear (such as Wrangler and Lee), occupational apparel (such as Dickies, Red Kap, and Horace Small), outdoor and action sports (such as Eastpak, the North Face, and Timberland), and sportswear (such as Nautica). Lee Bell satisfied the OIO that the individuals who will control the investment have the relevant business experience and acumen and are of good character. Lee Bell has demonstrated financial commitment to the acquisition.
Wikipedia says Lee Bell Inc is a subsidiary of VF Corporation, a US worldwide apparel and footwear company founded in 1899 and headquartered in Greensboro, North Carolina. It has 30+ brands in five product categories: Outdoor & Action Sports, Jeanswear, Imagewear, Sportswear and Contemporary Brands. It controls 55% of the US backpack market with the Jansport, Eastpak, Timberland and North Face brands.
Icebreaker’s Website says it was started in 1995 by Jeremy Moon to make outdoor adventure clothing with less reliance on synthetic fibres, establishing long term relationships with merino wool growers and eventually a “baacode” tracing origin. In 2003 it joined a transnational collaboration manufacturing in Shanghai and in 2005 opened its first NZ retail outlet.
NZ Window Shades Buys Land From Amway
New Zealand Window Shades Ltd (Ralph Sonnenberg, Netherlands 39.8%; Lance Colston Mitchell, NZ 25.5%; Barrie Gordon Mitchell, NZ 20.4%; various overseas persons 9.2%; Ellis Mitchell, NZ 5.1%) has consent to acquire 1.9461 hectares at 15 Lady Ruby Drive, East Tamaki, Auckland from Amway of New Zealand (US 100%) for $7.8 million.
The OIO states that NZ Window Shades Ltd (NZWSL) entered an agreement to purchase the property for use as warehouse, manufacturing and office space in February 2012. That agreement was not conditional on NZWSL receiving consent under the Act. NZWSL has recently identified that it required consent for the investment and sought it retrospectively.
The OIO considers that the acquisition is of benefit to New Zealand. It enables NZ Window Shades to reduce lead times from customer order to dispatch and is likely to result in them manufacturing of some window coverings products in New Zealand. Its previous investments in New Zealand also benefited New Zealand; it employs approximately 100 staff and produces a range of window coverings products here.
NZ Window Shades, manufacturer, supplier and marketer of Luxaflex, Weathermaster and Rufflette products, says on its Website that it is NZ’s largest supplier of window coverings. It was established in 1992 as a joint venture between Weathermaster and the Hunter Douglas Corporation, the Dutch/Canadian aluminium manufacturer which invented venetian blinds. Hunter Douglas operates globally as “a highly decentralised, global federation of small and medium-sized companies that manufacture and market similar products”.
UK Group Buys Simx Ventilation Products
Volution Group plc (UK public 70.9%; US Public 23.7%; Denmark Public 2.83%; Germany Public 1.8%; Netherlands Public 0.6%; Switzerland Public 0.14%; Guernsey Public, UK 0.01%) has consent via its subsidiar Chinook Ltd to acquire 100% of Simx Ltd, which has a leasehold interest in 1.3048 hectares at 1 Haliday Place, East Tamaki, Auckland.
The vendors are Joanne Speden, Michael Badger and Richard Burrell as trustees of the Badger Speden Family Trust (NZ17.5%), Cheryl Pengelly, Julian Pengelly and Peter Neumegen as trustees of the Pengelly Family Trust (NZ 65%), Bernard Sheridan and Sidadit Ltd as trustees of the KH & UK Hari Family Trust (NZ 17.5%), Julian Pengelly, Kumar Hari, Michael Badger (NZ 0.01%). Price $72 million.
The OIO states that Simx is a distributor of electrical and ventilation products and the Volution Group is a UK-based global supplier of ventilation products. Although a major supplier of Simx, Volution Group has no physical presence in New Zealand. The acquisition will enable Volution to establish in New Zealand and further grow its ventilation business in Australasia, as well as creating jobs and introducing new ventilation products in New Zealand.
Simx’s Website said it is a leading supplier to the electrical and heating, ventilation and air conditioning (HVAC) industries, with a team of 80. It provides products for home and commercial air extraction and ventilation, as well as lighting and sensor lighting products. Volution Group is a UK-based listed company, built up through a series of acquisitions since 2002.
It has two divisions: the Ventilation Group, which primarily supplies ventilation products for residential and commercial construction applications in the UK, the Nordic countries, Central Europe and Australasia; and Torin-Sifan, which supplies motors, motorised impellers, fans and blowers to original equipment manufacturers (OEMs) of heating and ventilation products for both residential and commercial construction applications worldwide. It operates in 22 locations, including now Auckland and Christchurch.
Swiss Animal Tag Firm Buys Simcro Animal Injectors
Datamars SA (Canada Public 65.1%; US Public 13.7%; Luxembourg Public 9.1%; UK Public 8.7%; Switzerland Public 1.6%; Cayman Islands Public 1%; Spanish Public 0.8%) has consent to acquire 100% ordinary and preference shares in Simcro Holdings Ltd, for a consideration exceeding $100m which is withheld under s.9()(2)(b)(ii) of the Official Information Act. The vendors are the shareholders of Simcro Holdings Ltd (NZ 37.3%; US Public 25.8%; Cayman Islands Public 12%; Australian Public 10%; Japanese Public 8.6%; Uruguay 0.8%, various public 5.5%).
The OIO states that Datamars SA is registered in Switzerland and specialises in radio frequency identification. It has markets in companion animal ID, livestock ID and textile ID products. Simcro Holdings Ltd is a New Zealand company specialising in application devices for the animal health industry. The acquisition will integrate the two businesses, to further develop and expand their product portfolios. Datamars SA has satisfied the OIO that the individuals who will control the investment have the relevant business experience and acumen and are of good character and has also demonstrated financial commitment to the investment.
Datamars’ Website describes it as a world leader in the animal and textile identification data business, operating in Europe, North and South America and Australasia. In March 2017 the Caisse de Dépôt et Placement du Québec, an institutional investor founded by legislation in 1965 to manage public and para-public pension plans and insurance programs, became Datamars’ largest shareholder.
As well as Datamars’ directors, shares are held by Columna Capital, which describes itself as an entrepreneurial investment firm based in London and Lugano which typically operates by acquiring equity in small to mid-market companies and deploying development capital to exploit growth opportunities. Simcro makes animal health pharmaceutical delivery system: injectors, topical and oral applicators and specialty packaging, with offices in the US and UK. Simcro Holdings Ltd was registered in Frankton in June 2013; its largest shareholder was Riverside Asia-Pacific Fund II Pte Ltd, Singapore
US Hospitality Group Buys Pinewood Backpackers, Queenstown
Delaware North Companies (NZ) Retail Services (USA (97.8%, various overseas 2.3%) has consent to acquire a leasehold interest in 1.3492 hectares at 32-48 Hamilton Road, Queenstown, from Pinewood Village Ltd (NZ 100%) for approximately $26,865,500, being the annual rental term multiplied by the total term of the lease and the 90-day bank bill rate.
The OIO states that the applicant is part of Delaware North, a privately-owned group of companies operating in the US, UK, Singapore, Australia and New Zealand. It provides a range of services including food and beverage, gaming, parks and resort lodging, retail, special events, and venue management.
It is acquiring a 20-year leasehold interest in the land by subleasing from Pinewood and is also acquiring the Pinewood Lodge backpacker accommodation business, built and operated on that land. Delaware North has other investments in NZ and proposes to inject capital and resources into developing the Pinewood Lodge business. It has committed to capital expenditure on marketing, Website, and administrative enhancements, to maintaining facilities in a higher state of repair, and offering food services on-site.
Delaware North is a global food service and hospitality company headquartered in Buffalo, New York, which also operates in the lodging, sporting, airport, gaming and entertainment industries. It employs 55,000+ people worldwide and an annual revenue of $US2.6 billion. It is family-owned and operated by Jeremy Jacobs (481st on the 2016 Forbes rich list), who also owns the Boston Bruins ice hockey team (Wikipedia) .
Pinewood was sold with a fixed term ten-year leasehold interest. It has 467 beds in 131 rooms in 36 buildings and units, as well as a commercial kitchen, meeting and conference rooms, and recreational spaces including a large outdoor BBQ, set in three acres a two-minute drive or seven- minute walk from the centre of Queenstown.
Chinese Buy Up Aus/NZ Bodycare Products’ Supplier
CITIC Capital China Partners III, LP and TIL NZ Rose Investment Ltd> (various overseas 43.8%; Canada 19.2%; Qatar 9.5%; Singapore 8.6%; Malaysia 6.3%; China, PR 12.6%) has consent to acquire:
- 100% of Trilogy International Ltd (TIL) from its shareholders (Business Bakery LP, NZ 31.2%; NZ Public 26.5%; various overseas 10%; National Nominees Ltd ACT Australian Ethical Investment Ltd, Australia 9.36%; Grandeur Peak Global Advisors, LLC, USA 6.61%; UK Investors 6.2%; Regal Funds Management Pty Ltd, Australia 5.5%; North American Public 2.5%; UK Public 2%).
The cost will be approximately $203 million, being the price of all shares at $2.90 per share at the record date for the transaction. The OIO states that CITIC Capital China Partners III, LP has registered TIL NZ Rose Investment Ltd and a holding company in NZ for the purpose of this transaction. CITIC Capital China Partners III, LP and TIL NZ Rose Investment Ltd are part of the CITIC Capital group of companies, which provides investment vehicles for a number of sovereign investment funds, pension plan funds, and institutional investors.
It has offices in Hong Kong, China, Japan, and the United States. Trilogy International Ltd is an NZX and ASX (foreign exempt) listed company that manufactures, wholesales, and distributes home fragrance, body care and natural products, predominantly in New Zealand and Australia. Trilogy International has acquired a range of business lines, including Ecoya, Goodness, and CS Company brands, and part of its growth strategy is China-focussed expansion through grey market channels.
This aspect of Trilogy is of particular interest to the CITIC Capital China and aligns with its China-focussed active equity strategy. The applicant has satisfied the OIO that the individuals who will control the investment have the relevant business experience and acumen and are of good character and has demonstrated financial commitment to the investment.
Trilogy is a natural body products company founded by sisters Sarah Gibbs and Catherine de Groot in Upper Hutt, which was sold to natural home fragrance, bath and body company Ecoya in a $20 million deal in 2010. In 2015 Trilogy bought privately-owned fragrance and cosmetics importer CS Company in a $37 million deal funded entirely by bank debt.
CS is New Zealand’s largest independent distributor of perfumes, cosmetics and toiletries (Marc Jacobs, Calvin Klein, Dolce & Gabbana, Gucci), and was forecast to make $41m that financial year (Richard Meadows, Stuff, 18/8/15, ).
Adamantem Issues New Shares To Buy Rest Of Vintage Aged Care
Adamantem Capital Management Pty Ltd (as manager of the Adamantem Capital Fund I Entities and the Heritage Co-Investment Trust ) (Australia 57.3%; Cayman Islands 24%; US 11%; NZ 3.3%; Germany 2.8%; UK 1.7%) has consent to acquire 100% of the shares in Vintage Holdco Ltd, through a funding transaction involving the issue of new shares.
The OIO states that Adamantem Capital Management Pty Ltd is the manager of the Adamantem Capital Fund 1 Entities and Heritage Co-Investment Trust, a multi-entity investment group which currently owns approximately 79% of Vintage Holdco Ltd. Vintage Holdco Ltd owns the Heritage Lifecare portfolio of aged care facilities located throughout New Zealand.
This consent enables the Adamantem Capital Fund 1 Entities and Heritage Co-Investment Trust to increase their interest in Vintage Holdco Ltd from approximately 79% up to 100% through participating in funding initiatives for purposes such as funding future acquisitions and further developing the aged care portfolio. The investment is therefore likely to result in the introduction of capital into New Zealand. This investment is also likely to enhance the viability and development of the existing Heritage Lifecare portfolio through allowing more efficient introduction of capital. Efficient all right, as you don’t need to use your own money, or demonstrate financial commitment required, or even apparently a likely price.
It’s unclear who owns the other 21% of Vintage that Adamantem is buying. This consent needs to be read in conjunction with the OIO Decision of July 2017 which allowed Vintage Bidco Ltd to buy Heritage Lifecare for $115.7 million from Harbourside Holdings Ltd (NZ Public 100%), with Heritage/Harbourside directors retaining some shares in Holdco (which owns Bidco) and using the Australian money to buy ten more sites. The wording “purposes such as funding future acquisitions” and “development of the…portfolio” suggest this will happen again. It is Adamantem’s interests that are likely to be enhanced, rather than those of elderly people in New Zealand.
NZ Lifestyles
Intending Chinese Resident Will Build Houses
Foreland Ltd (China, People’s Republic of (100%) has consent to acquire 0.2302 hectares land at 259 Beach Road, Campbells Bay, Auckland, from Wei Wu (China, PR 100%) for $4.3 million. The OIO states that Qiu Cheng, a Chinese citizen, is the sole shareholder of Foreland Ltd. As part of his investment plan for his Investor Plus resident visa, Mr Cheng proposes to acquire the land and build up to four houses for both his family residence and commercial purposes.
Mr Cheng has satisfied the OIO that he intends to obtain New Zealand residency and reside in New Zealand indefinitely. “overseas persons intending to reside in New Zealand indefinitely are not required to show that their investment in sensitive land is likely to benefit New Zealand. This supports migrants in the process of moving to New Zealand to make New Zealand their home”.
So, he’s not actually here yet and is still planning his Investor Plus visa application. Nonetheless, the last two sentences reflect the different stress put on Overseas Investment Act criteria for residents under the Ministerial Directive of 28 November 2017. This application would comply with incoming changes to the Act to prohibit non-residents from buying existing houses. There is currently no house on this beach access property.
Colebatch Buys More Land At Whakatutu, Gisborne
Te Hau Station Ltd (Phillip Maxwell Colebatch, Australia 100%) has consent to acquire 1,667 hectares at Waipaoa Station, Gisborne, from Whitbourne Farm Ltd (Jennifer Kaye and Robert James Telfer, NZ 50%; Andrew James Fraser MacPherson, NZ 50%). Price is $12,087,700.
The OIO states that Phillip Colebatch is a current Resident Visa holder and has satisfied the OIO that he intends to reside in New Zealand indefinitely. “Overseas persons intending to reside in New Zealand indefinitely are not required to show that their investment in sensitive land is likely to benefit New Zealand. This supports migrants in the process of moving to New Zealand to make New Zealand their home”
Colebatch is a high-flying director who seems to be gradually buying up the tiny farming settlement of Whatatutu, in the back blocks of Gisborne. See Decisions of May 2008 for Colebatch’s purchase and lease back of Te Hau Station and to buy Moanui Station, Wheturau Station and other land in Whatatutu in September 2011 March 2015 and June 2017. The Wall Street Journal identifies Colebatch as a director of Land Lease Group , a property and infrastructure development company, and former director of an international range of insurance companies. Radio NZ (2/5/18) says Dr Colebatch previously ran European and American business interests from the UK’s Somerset countryside, but has severed his British investments. He and his wife and dog will live partly in Point Chevalier, Auckland, partly in Gisborne and partly in an old school house on the East Coast property.
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