Private equity firm invests in commercial plumbing and height safety firms

Harmonised occupational health and safety laws and increased leverage into the resources boom have prompted private equity investment in a commercial plumbing business and a height safety company.

SME-focused private equity firm Anacacia Capital has nabbed majority stakes in commercial plumber Planet Services Group, whose clients are mainly construction and mining companies such as Leighton and Lend Lease, and Roofsafe Industrial Safety Enterprises, which provides height safety products and training to large industrial clients such as Wesfarmers.

Anacacia managing director and founder Jeremy Samuel says Planet Services and Roofsafe are not dissimilar: they are increasingly doing work in the resources sector, their clients are blue-chip Australian corporates, and they were looking for capital to reach the next stage of growth.

“We’re really excited by both businesses,” Samuel says, adding there will be no changes at CEO levels although the investments will see Anacacia representatives join both boards.

Samuel says while both companies are leveraged to the “soft” construction sector, they have grown even during the global financial crisis.

“This is evidence that if you have a well-run niche business you can grow, even during tough times,” he says.

Samuel says Roofsafe, as Australia’s only national operator in height safety, is well-placed to capitalise on growing corporate awareness of OH&S, particularly as Australia prepares for nationalised laws next year.

“There is a big trend towards that,” he says.

“While construction volumes may be down, the focus on safety is up significantly. Nobody wants to have a major accident on their watch.”

For Planet Services, Samuel was attracted by its niche position in hydraulics and a general trend towards “green” building practices.

Prices for the investments have not been disclosed, although Samuel says it typically invests between $3 and $10 million, and in businesses with revenues of between $20 and $50 million.

Anacacia’s other SME investments include oven suppliers Home Appliances, language service provider Appen Butler Hill, audio engineering firm Norwest Productions (which did work for the Commonwealth Games in New Delhi and Winter Olympics in Vancouver), and Rafferty’s Garden, which has grown its market share of babyfoods to about 30% over five years.