$350m sale a ‘Lotto win’ for brothers
THE $350 million sale of retailer EziBuy has transformed two Manawatu brothers into instant multimillionaires.
Co-founders and brothers Peter and Gerard Gillespie started the company in Palmerston North in 1978.
Their first catalogue was a folded A3 black and white page mailed to a list of organisations and clubs pulled out of the phone book.
From humble beginnings, EziBuy grew to become the largest fashion and homeware multi-channel store in Australasia, selling $200m of goods in the last financial year and employing 500 people.
Yesterday, Australian supermarket giant Woolworths announced it was buying the business for $350m, subject to Overseas Investment Office approval.
That values the low-profile company’s worth at two-thirds of NZX-listed Briscoes Group, or a third of The Warehouse.
Retail analyst and Coriolis Research director Tim Morris said the ‘‘unknown sleeper of New Zealand retail’’ had secured a very healthy sale price.
‘‘That’s $600 a customer,’’ he said. ‘‘It looks more like a dotcom valuation than a boring old retail business valuation.’’
Mr Morris suggested Woolworths would be hoping to drive significant growth in Australia, which only accounted for 60 per cent of EziBuy’s sales at present.
‘‘The business is reasonably saturated in New Zealand but there’s still a lot of upside in Australia, and they’re buying based on that.’’
The lion’s share of the loot will go to Australian private equity firm Catalyst Investment Managers, which bought in to EziBuy in 2007.
Companies Office records show it has a 43 per cent stake, suggesting its payout will be $150m once the deal goes through.
Peter and Wendy Gillespie own 25 per cent, worth an estimated $88m, and Gerard and Vivienne Gillespie own 22 per cent, or $77m.
Both Gillespie brothers were on holiday overseas and could not be reached for comment.
In a statement, they said they never envisaged that EziBuy would become as successful a business as it was today.
‘‘A huge amount of this success is due to the combined efforts of a great team of loyal people.’’
Vision Manawatu acting chief executive Rodney Wong said EziBuy’s sale price gave a rare insight into the value that existed in the region’s businesses.
‘‘Congratulations to the local owners. They’re great guys and this will be better than winning Lotto for them.’’