Alceon PE signs on dotted line for Boss Engineering; Citi in for debt

Sydney’s Alceon Private Equity has closed a deal to buy 50 per cent of automated agricultural equipment business Boss Engineering, in its largest acquisition to date.

Street Talk understands Alceon PE co-heads Zac Midalia and David Wilshire signed the deal overnight with Boss’s founders Andrew English, Michael Grills and Dan Ryan. It valued Boss at about $170 million on an enterprise valuation basis, and was first flagged by this column in March.

Alceon has drawn upon three sources to bankroll the deal. It used its balance sheet to underwrite the acquisition to the tune of $70 million, and then tapped its network of high-net-worth and family offices to syndicate the equity slice within a fortnight. Wall Street bank Citi provided the debt for the acquisition, while Kelly Morton’s Skye Capital Partners was also on the deal.

Boss Engineering was founded in Inverell in the early 2000s by English, Grills, Ryan and since deceased Peter Mansur. It has differentiated itself from rivals by prioritising automation from its early days. It has its own manufacturing facility, and runs an in-house design and engineering capability. The founders had Miles Advisory steering the talks on their behalf. Law firm Arnold Bloch Leibler acted for Alceon.

The 32,500 square metre facility has 27 robots, with the product line-up including the highest-yielding seeders and planters available to corporate and broad-acre farmers.

Alceon was attracted to the business by Boss’s focus on automation and robotics, and exposure to Australia’s essential food supply needs. Former CHAMP Private Equity dealmaker Ben Sebel, who sits on the PE unit’s advisory board, will chair Boss’s board.

Ploughing for deals

“This is a deal that makes absolute sense to Alceon and our loyal investor base because it fits our core strategy of marrying flexible capital with operator led, market leading companies,” Midalia said when contacted by Street Talk. “We believe our ability to identify and work with leading mid-market companies such as Boss is unique in the Australian PE sector.”

It is the sixth deal out of Alceon’s PE team since Midalia, who formerly worked at Ruffy Geminder’s Kin Group, joined forces with Wilshire. The duo had a good 2023, booking an 80 per cent return on an IRR basis for their backers at childcare play Nido. The IPO secured backing from AustralianSuper and ended up being the year’s second-biggest listing.

Their playbook is to hunt for founder-led businesses in its target sectors, and to tag along for the ride. It then taps its investor network to fund the deal. Often, it’s the first external investor on the scene, as is the case at Boss Engineering.

It scours for deals in healthcare, defence, childcare and education, and civil infrastructure services. Names in the portfolio include ophthalmology and short-stay hospital roll-up SMS Healthcare, IT managed services business EFEX and construction, compaction and traffic management equipment provider Orange Hire.