SYDNEY, April 22, 2003 -- Australian private-equity investment firm Castle Harlan Australian Mezzanine Partners Pty. Ltd. (CHAMP) announced today that the CHAMP I funds have completed the acquisition of a majority interest in Austar United Communications Limited (Austar) (ASX:AUN.AX), in line with a plan announced last December. CHAMP also said it will initiate an offer to acquire all remaining publicly held Austar shares in early May.
Austar is the only provider of satellite pay TV in non-urban eastern Australia and the second largest provider in all of Australia, with more than 400,000 subscribers. Austar has exclusive pay television rights in all but the major Australian cities (i.e., Sydney, Melbourne, Adelaide, Brisbane and Perth) and the sparsely settled state of Western Australia. For the year ended December 31, 2002, Austar reported revenues of approximately A$320 million and earnings before interest, taxes, depreciation and amortization of approximately A$23 million.
The CHAMP I funds paid US$34.5 million to the bondholder creditors of United Australia Pacific, Inc. (UAP), as part of a Chapter 11 Plan of Reorganization filed in U.S. Bankruptcy Court in New York last December. In return, CHAMP has assumed UAP's majority interest in United Austar, Inc. (UAI), a Colorado company that beneficially owns 80.7 percent of Austar. UnitedGlobalCom Inc. (UGC) is the other shareholder in UAI. UGC separately owns an additional 0.6% of Austar.
In accordance with requirements of the Australian Securities and Investment Commission (ASIC), CHAMP will begin a follow-on offer to acquire Austar's remaining publicly held shares in early May , when offering documents are mailed to shareholders. CHAMP is offering 16 cents per Austar share, which is slightly higher than the effective price paid for UAP's Austar shares of 15.5 cents per share. The offer will remain open for 30 days.
Four CHAMP representatives will join the Austar board, and John Porter will continue as Austar's chief executive officer.
As also previously announced, after completion of the follow-on offer for the outstanding public shares, CHAMP and UGC intend to fully underwrite an Austar equity rights issue of A$63.5 million, also expected to be priced at 16 cents per share. Austar will use the proceeds for working capital in support of its continuing operations and some debt reduction.
CHAMP manages and advises more than A$750 million in private-equity capital in several funds available for investment in leveraged buyouts, growth and development opportunities and venture capital in Australia, New Zealand and the broader Australasian region. The CHAMP I Funds have more than A$500 million of committed capital for investment in larger buyouts.
CHAMP is one of Australia's oldest and most successful private-equity firms. It is 50 percent owned by Castle Harlan, Inc., the New York merchant bank, and 50 percent by the founders of CHAMP's predecessor firm.
Since the final closing of the CHAMP I funds in mid-2000, its Australian acquisitions have included Australian Pacific Paper Products, a leading Australian maker of diapers and adult incontinence products; Penrice Soda Products, the only Australian manufacturer of soda ash and sodium bicarbonate; Bradken, Australia's leading manufacturer of ground-engaging tools used by the mining and construction sectors and also Australia's largest producer of bogey systems for railway freight cars; and Sheridan Australia, the leading Australian manufacturer, designer and marketer of bed and bath linens.
Castle Harlan was founded in 1987 by John K. Castle, former president and chief executive officer of Donaldson, Lufkin & Jenrette, the investment banking firm, and Leonard M. Harlan, founder and former chairman of The Harlan Company, a real estate investment and advisory firm.
Since its inception, Castle Harlan has completed acquisitions exceeding US$5 billion. It is currently in the final stages of raising its fourth investment fund, targeted at more than US$1.0 billion.