The high-powered Bob Browning-led team now driving listed shell Australasia Consolidated has given investors few hints over its likely investment plans as it charts a new course over the next few months.
The high-powered Bob Browning-led team now driving listed shell Australasia Consolidated has given investors few hints over its likely investment plans as it charts a new course over the next few months.
But despite the lack of detail, punters wholeheartedly embraced the group's "trust us" mantra, by sending the moribund former explorer's shares soaring 50 per cent higher today.
The stock raced as high as 20 cents before closing 4 cents - or 31 per cent - higher at 17 cents on turnover of more than 2.6 million shares after announcing the former Alinta and Austal chief as its new chief executive.
The company, chaired by Perth mining dealmaker John Terpu, also announced former Bain & Co partner and Perpetual executive Bryant Plavsic would be its new chief financial officer, complimenting its already top-deck advisory committee of former Woodside boss John Akehurst, Azure Capital co-founder Mark Barnaba and US merchant banker John Willinge.
The stock has now almost trebled since Australasia first announced it had appointed the advisory committee to chart a new growth strategy late last month, and tripled since the start of September when it traded as low as 5 cents.
Speaking to reporters today, Mr Browning - who quit as Austal chief only a month ago - gave little away about the company's plans other than to say he expected the company's executive clout would enable it create a major company over the coming years.
In particular, he flagged Australasia would be targeting opportunities to acquire businesses lacking the talent or resources to fulfil their true potential to build shareholder value.
"As CEO ... I see an opportunity to assist in building a company from very modest beginnings into a much larger sustainable company drawing from my own experiences of acquiring and integrating companies," Mr Browning said.
"We'll be targeting complimentary businesses in a sector or an industry, and (believe) through careful integration, capital infusion and talent management we can build an organisation of scale ... and strong shareholder value by allowing these companies to realise their full potential."
Mr Browning declined to identify which sectors the company would target, but said the team would spend the next two months vetting prospective acquisitions with the aim making its first move early next year.
"We'll work over the Christmas break and into January to start to zero in on a particular sector so we can start to target a particular acquisition, so it's a bit early to talk about any specific industry," he said.
Mr Barnaba said though the plan might sound "vague" now, the quality of management and their record in delivering shareholder value would put the company in good stead.
He also expected its investment strategy to reflect the strengths and experience of its new executive and advisory team.
Perhaps the best pointer for investors will be Mr Browning's six year record at Alinta.
Mr Browning spent billions of dollars turning the former state gas utility into a diversified transnational owner of pipeline, generation and energy retailing businesses before it was taken over for $8 billion and split up by Babcock & Brown and Singapore Power.
The takeover followed a controversial Macquarie-backed management buyout proposal championed by Mr Browning and then Alinta chairman John Poynton.
But while Alinta, and its shareholders thrived under Mr Browning, the massive debt burden taken on to fund its growth ultimately resulted in Babcock & Brown's collapse as the global financial crisis took hold and made refinancing virtually impossible.
Mr Browing today said he had little doubt about Australasia's capacity to fund any deals, given the team's proven record of delivering multi-billion dollar deals.
He said Australasia would also be unique from other listed investment groups or private equity, in that it was adopting a long term approach to building both businesses and shareholder value.
"We are quite different," Mr Browning said. "What we are looking to do is acquire companies, weave them together to build scale and actually help them realise their full potential.
"So we are looking to hold on to these assets long term and build a sustainable organisation. There's no interest in buying them, gutting them and selling them off again."
See company statement below:
Australasia Consolidated Limited (ASX : AAO) is pleased to confirm its commitment to establishing a new investment vehicle with the appointments of Mr Bob Browning as Chief Executive Officer and Bryant Plavsic as Chief Financial Officer.
Mr Browning will assume the role of CEO effective 16 November 2010 following Mr Plavsic's commencement with the Company on 1 November. They will jointly drive the Company's recently announced strategy to generate shareholder value through new acquisitions and driving asset performance to full potential.
Mr Browning and Mr Plavsic will work closely with the recently formed Advisory Group within AAO which reports direct to the Board. Advisory Group members include Mr Mark Barnaba (Chairman), Mr John Akehurst and Mr John Willinge.
As a group, the new executive appointments and the Advisory Group members represent one of the country's most experienced team of business leaders and value creators. Their backgrounds include:
Mr Browning: Three years Managing Director of Austal Ltd; Over six years as CEO of Alinta Ltd.
Mr Plavsic: Partner at Bain & Company; Head of Strategy, Perpetual Ltd; Co-founder Poynton & Partners and GEM Consulting; Manager McKinsey & Company.
Mr Barnaba: Co-founder of Azure Capital; Chairman Western Power; Director Fortescue Metals Group.
Mr Akehurst: Director of the Reserve Bank of Australia; Director CSL Ltd; Director Origin Energy Ltd; former CEO of Woodside Petroleum.
Mr Willinge: Experienced company director and public market and private equity investment manager; Partner Thomas Weisel in San Francisco; terms with Goldman Sachs in New York and Rothschild in Sydney and Perth.
AAO Chairman, Mr John Terpu, said the executive appointments and finalisation of the Advisory Group has created the foundation for the Company's previously announced strategy to identify, evaluate, finance and acquire outstanding, value-creating assets.
Advisory Group Chairman, Mr Mark Barnaba, said the appointment of the senior management team positioned the company to leverage its talents in investment banking, asset acquisition, strategy development, financial structuring and hands-on business management by acquiring private or publicly-listed companies and driving them to achieve full potential to deliver top quartile total shareholder return.
"We know from our experience, there are many funds and companies that have assets that are looking for leadership teams and an exit strategy. The genesis of this investment vehicle within AAO has been to start with a quality management team in a listed vehicle," Mr Barnaba said.
John Akehurst said: "This is an exciting leadership team with a clear mission. The Advisory Group is extremely pleased to be supporting the company as it now looks to grow its assets and to create value.
Commenting on his appointment, Mr Browning said: "I am very proud and excited to have an opportunity to lead a team of seasoned professionals with unparalleled experience in acquisition identification and capital raising."
Mr. Plavsic echoed Mr. Browning's sentiments saying: "Rarely does a small company begin with a stable of such experienced business professionals. I am looking forward to applying my own skills in mergers and acquisitions, post-acquisition integration and performance improvement."