TPG sells 45% stake in Greencross to pension funds in $3.5 billion deal

“Both AustralianSuper and HOOPP are high caliber shareholders and their decision to invest in our business is an affirmation of the quality of our team, our strategy and our long-term vision,” Wahby told staff.

He said Greencross sales have grown 18.5% per year based on a compound annual growth rate since TPG took over in 2019, while its customer base has grown 10% per year.

HOOPP and AustralianSuper will serve on the Greencross Board of Directors.

Deal done

The sale of the stake and the refinancing concludes a six-month process for TPG. The private equity firm has been in talks with potential buyers, investors and financiers of Greencross, aiming to capitalize on the company’s significant gains in its first three years of ownership.

The talks, organized with the help of Credit Suisse and Morgan Stanley, have attracted interest from a range of potential Australian and overseas investors, including Wesfarmers.

Street Talk revealed interest from AustralianSuper last month. The Melbourne-based investment giant bought sales in local TPG sales, including hospitals owner Healthscope and chicken processor Inghams Group.

HOOPP is a defined benefit pension plan that invests on behalf of Ontario’s healthcare workers in Canada. The company held more than C$114.4 billion in assets as of December 31.

The Greencross deal mirrors HOOPP’s move into Greek yogurt brand Chobani in 2018, when it acquired a minority stake from TPG. The investment manager has focused on direct investment and co-investment managers alongside private equity firms over the past decade.

Flip game

Greencross, now run by former Bras n Things boss George Wahby, has been touted to potential investors as a company with around $300 million a year on the profit line, making it three times bigger than which TPG acquired in 2019.

It owns Petbarn and City Farmers, which have pet supply stores and online stores, and Greencross Vets, which has a nationwide network of about 150 locations.

The group has been helped by an increase in the number of Australian pet owners and an increase in spending on pets by owners, both of which have been accelerated by the COVID-19 pandemic, and the measures taken by TPG to accelerate growth, including new IT systems and the growth of its company-owned product line. The next step is expected to include a larger share of the veterinary market, with Greencross sitting on around 7%.