Family-owned Mayo Hardware calls in PwC for review
By Sarah Thompson and Anthony Macdonald12 Dec 2018 — 12:15 AMFamily-owned Australian hardware supplier Mayo Hardware is on the cusp of unlocking some value.
Street Talk understands the company's owners have hired PwC Australia to help consider a number of strategic options, including selling the business or taking on a new investor.
Mayo Hardware was founded in 1928 and sells locks, outdoor lifestyle items, a workwear line and safety equipment, to hardware sellers including independent retailers in Australia and offshore.
Mayo Hardware's owners have hired PwC Australia to help consider a number of strategic options. Photo illustration: Ryan Stuart
It is understood the company makes about $20 million to $25 million in annual earnings before interest, tax, depreciation and amortisation, which is likely to fuel expectations of a $200 million-odd deal value.
The company is majority owned by Sydney-based James and Sarah Mayo. Sarah Mayo doubles as company CEO, while James Mayo is a director. The company was started by their grandfather Cecil Mayo, who started selling locks in Australia on behalf of Master Lock.
Mayo Hardware still pitches itself as the exclusive distributor of Master Lock products in Australia - and has expanded its product and service offering.
The company is expected to be shown to Australian and offshore mid-market private equity firms as part of the review, as well as potential strategic buyers. Private equity firms in particular have had considerable success investing into such family-owned businesses in the past, and are increasingly looking to partner with family shareholders to turbo charge growth in a five to 10-year investment horizon.
The review comes after ASX-listed home products company GWA sold a similar business - its door and access systems unit - to Allegion for $107 million in May, which was more than twice its book value.
Elsewhere, Singapore-based power line communications company gridComm is in front of Australian fund managers this week seeking to raise $2 million in a pre-initial public offering funding round.
The deal is structured as the sale of convertible notes and ahead of an ASX-listing planned for 2019.
Fundies were told gridComm provides hybrid power line communications (PLC)-radio frequency (RF) devices and systems that enable the transformation of the electricity grid into a smart city network.
Such a network can be used to connect sensors to measure weather, pollution, traffic, and the like, with street light control software that saves millions of dollars in electricity and maintenance costs.
