July 2005 -  Macquarie acquires Fundcorp

Situation

• AIL, a privately owned investment holding company incorporated in New Zealand, invested in Fundcorp Pty Ltd (“Fundcorp”) in July 2004.
• Fundcorp is a special purpose consumer finance company operating in Australia and New Zealand.
• After Fundcorp’s main financing source underwent an MBO, the directors were determined to find alternative debt providers.

Approach

• ARC Associates (“ARC”) conducted an analysis of several debt and equity providers and their offers, ultimately recommending Macquarie’s offer.
• The transaction was negotiated over three months.
• At the end of the first two months Fundcorp’s management and shareholders granted Macquarie Bank exclusivity.

Transaction

• A cash consideration to purchase the entire convertible preference share capital.
• The transaction was completed on 11 July 2005.
• AIL achieved an IRR of 37.1% on its investment.