Private equity swoops on BagTrans

Date: 06.07.2010

Boutique private equity firm Yarra Capital Partners has bought into palletised freight transporter BagTrans

Private equity YCP swoops on BagTrans

By Rob McKay | July 6, 2010

Boutique private equity firm Yarra Capital Partners has bought into palletised freight transporter BagTrans.

Neither BagTrans nor YCP were prepared initially to answer specific questions, though BagTrans CEO Habib Francis agreed to speak generally of the deal that was sealed on June 30 and took effect on July 1.

"Yarra Capital Partners, as well as myself and another gentleman, have bought into the company," Francis says.

"The current directors remain as directors and shareholders of the business."

YCP says the attraction of BagTrans is its "outstanding long-term potential", along with the "attractive underlying growth of the service segment of the less than full truck load logistics market as various supply chains seek to balance the need for lower inventory levels whilst minimising out of stocks".

YCP also has high praise for the management of the 29-year-old company.

"We have gotten to know this business, its customers, founders and management team very well over the past 12 months," YCP Partner Huy Truong says.

"We were immediately attracted to the fact that the business strategy was anchored on quality customer service and performance.

"Moreover, we came to understand that quality and service was also entirely consistent with the personal values of the founders, the management team and the broader organisation."

BagTrans runs a fleet of B-doubles, semi-trailers and rigid trucks.

The company has bases in NSW, Victoria and Queensland, while relying on Namron Transport for services in South Australia.

It uses rail for Western Australian deliveries, with Trinne Warehousing & Distribution taking Sydney freight and Sadliers Transport looking after Melbourne goods.

Allalong Tasmania Searoads provides distribution in that state.

YCP says it specialises in businesses with revenues of $10 million to $50 million and believes that companies of this size have generally reached a ceiling where new investment is required if the company is to grow to $100 million or greater.

"The owners and management of YCP investee companies are focused on increasing the value of the business in the medium-to-long term," the company says.

"The existing business owners may be looking at succession planning as they approach retirement, organic growth initiatives or acquisitions, or facilitating an MBO or MBI."

It has investments is two other firms, Australian Life Insurance Group and Australian Glass Group, and was founded by Huy Truong and Alan Schwartz to service family or founder-owned companies.