3 July 2014
The Australian Financial Review
Copyright 2014. Fairfax Media Management Pty Limited.
Mark Carnegie's private equity firm has taken a stake in baking minnow Modern Baking and is looking to raise $100 million for a new fund targeting more small fast-moving consumer goods businesses.
MH Carnegie investment director Mark De Ambrosis said the investment was the first of many to come and his team was hunting for similar opportunities in FMCG (fast-moving consumer goods). "We are currently looking at six or seven other businesses," he said.
"It's an under-invested space without a lot of institutional capital. There's a huge number of small businesses in the space that don't just need capital but need a partner."
Originally called Universal Biscuits, Modern Baking has less than $50 million in revenue, employs around 150 staff and manufactures biscuits under its Unibic brand as well as other products at its Melbourne facility.
MH Carnegie made its investment through its 40 per cent stake in retail services provider Saleslink, but the firm plans to invest directly in similar companies going forward.
Mr De Ambrosis said his team would bring capital to the table and Saleslink will help the company grow its top line by improving sales and merchandising capabilities.
Mr De Ambrosis said he was confident they can quickly grow Modern Baking to have more than $100 million in sales.
MH Carnegie was founded in 2010 by Melbourne businessman Mark Carnegie. The firm now has just under $330 million in assets under management and counts Harvey Norman founder Gerry Harvey and millionaire adman John Singleton as co-investors in its funds.
Mr De Ambrosis said the team was raising capital for a new $100 million-plus fund specifically aimed at investing in small FMCG companies.
"Modern Baking is the first step in the journey. There's a great opportunity to build a portfolio of businesses in this space," he said.
The value of Saleslink's stake in Modern Baking was not disclosed but is understood to be less than $10 million.
Mr De Ambrosis, formerly of McKinsey & Company and private equity firm Catalyst, said he wanted small FMCG business owners come and pitch for MH Carnegie's capital.