Paramount Safety Products has joined a wave of large privately-owned companies in Perth accepting big-ticket takeover offers from offshore buyers.
Paramount Safety Products has joined a wave of large privately-owned companies in Perth accepting big-ticket takeover offers from offshore buyers.
New York-based Protective Industrial Products Inc wrapped up the acquisition of Paramount on June 30.
The US company did not disclose how much it paid but Business News has estimated Paramount’s family owners would have received about $120 million, as explained below.
Gnangara-based Paramount was established in 1992 by the late Rob Bird and has been led by his sons Tim and Will for the past decade.
The company has grown to have more than 100 employees across Australia, New Zealand, Latin America, Dubai and Africa.
It develops and manufactures safety products for a wide range of industries including mining, oil and gas, construction, infrastructure, manufacturing, logistics and agriculture.
Annual returns lodged with ASIC by Paramount’s parent company WRB Nominees show the scale and profitability of the business.
Annual revenue grew by 17 per cent to $94 million for the year to June 2020 while net profit jumped 28 per cent to $10.4 million.
The company has been consistently profitable, and as a result has been able to make dividend payments averaging $4.1 million over the past four years.
Paramount also has a strong balance sheet with low debt and net assets of $66 million.
Judging by earnings multiples that were used to value similar businesses that have changed hands this year, Paramount is likely to have sold for about six times earnings before interest, tax, depreciation and amortisation.
With an EBITDA of $19.8 million last year, that suggests the business would have sold for about $120 million.
The Paramount deal follows other private M&A deals reported by Business News, including Kinetic Logging Services (sold for $150 million), Electro80 and Monson Agencies Australia.
In addition, WA businesses such as Go West Tours, McKay Drilling, Orlando Drilling and Bright People Technologies have been bought by public listed companies.
The Paramount deal was the 12th purchase completed by PIP in the last four years.
The acquisition spree has been supported by its US-based private equity backers – initially Audax Private Equity and, since January this year, Odyssey Investment Partners.
"The addition of Paramount is key to PIP’s objective of servicing customers around the globe and to provide them with more opportunities for growth," said PIP president and chief executive Joe Milot.
"We saw great similarities in our business models and synergies with Paramount’s products and brands and are very proud to have a company with such a rich legacy join us."
PIP said managing director Tim Bird and operations director Will Bird will continue leading the Paramount team in the Oceania region.
“We are equally excited to join the PIP global family,” said Tim Bird.
“We had been looking for the right partner to continue the dream of our father, the late Rob Bird.”
PIP was well set-up to negotiate a sale, as its board was chaired by corporate adviser Ian Macliver and just four month ago it recruited PwC’s Chris Page as strategy and finance director.
Paramount was advised by lawyer Shaun McRobert, a partner at MinterEllison.
