How to buy your own $20m firm in just six weeks

Friday 17th August 2001

John Anderson

By Deborah Hill Cone

Six weeks from whoa-to-go saw John Anderson buy his own $20 million company.

That's how long it took for the 34-year-old to suggest and pull off a management buyout of Hamilton-based dairy equipment exporter Waikato Milking Systems from its international parent.

"I had lawyers saying this can't happen that quickly but I said it's going to happen," Mr Anderson said.

Waikato Milking Systems started in 1978 as part of Carter Holt Harvey but since 1996 had been owned by Wisconsin-based dairy equipment company DEC International.

Mr Anderson said in his role as general manager he knew DEC International was suffering problems - he had been on trips to the UK to try to help out its operation there.

With the international group under financial pressure, he expected assets including Waikato Milking Systems would have to be sold.

"I could have sat here, said 'bugger' and gone down in a screaming heap or just here meekly waiting till someone says, 'That's it John, thanks for your 12 years of service' ... but it's always better to [be in] control," Mr Anderson said.

In mid-June Mr Anderson and two other senior managers, Warren Cole and Alan Murray, made an offer to DEC, were turned down and came back with another offer and the deal was done for $8 million.

KPMG arranged the finance in principle - linking Mr Anderson with an individual investor - within two weeks of the indicative offer being accepted and finalised the entire deal within a further four weeks.

"An MBO normally takes circa three months so this MBO was achieved in an amazingly short time," KPMG associate director corporate finance Rebecca Ganz said.

Waikato Milking Systems, which exports 40% of its output to countries including the UK, Mexico and Australia, turned over about $20 million last year.

Mr Anderson said the plan was to see Waikato Milking Systems able to grow unhindered under its new ownership.

Under DEC's ownership the company had been held back in some markets where it could not push its own products because DEC had its own deals it wanted to protect.

"We're now unencumbered by that. Our growth prospects are very attractive - we've got the knowledge and the experience and distribution set up."

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