Creating a catalyst through PE partnership: Geotech Group
Bede Noonan, managing director of Geotech Group, wasn’t even looking for private equity when an old mate introduced him to the director of a top Australian fund. But it turned out to be a fortuitous meeting for both parties.
Within a short period, the Melbourne-based business had grown to become one of Australia’s largest civil infrastructure companies, lifting revenue from $50 million to over $300 million and employing more than 500 staff.
Bede says that one of the most important factors behind the decision to partner with private equity was the objectivity that it brought to the table.
In conversation with Acciona Geotech
Creating a catalyst through PE partnership
“I recognised that in order to grow we had to take a more dispassionate view of the business. We had to bring in a professional board, as well as governance structures and processes appropriate for a growing business.”
Bede also credits Geotech Group’s growth to the ‘de-risking’ of the company that occurred once their private equity partner came on board.
“Private equity brought new skills and expertise and a large network, all of which gave us confidence to play in broader markets.”
Although not necessarily evident at the time, another critical factor for Bede was the introduction of a corporate governance structure, and the ‘psychological’ impact of going from being an owner to one of a number of shareholders.
“Having that wider responsibility, where suddenly you’re responsible to other shareholders, put me in a different frame of mind. I think it was a key ingredient in helping us really move forward.”
“Private equity brought more than just financial investment. Whilst respectful of our size, private equity reinforced the importance of good corporate governance, and helped us establish a Chairman and Board to lead our growth story.”
In April 2017, Geotech Group was bought by Spanish engineering giant Acciona in a deal that valued the business at more than $260 million.
Bede now heads the new company, Acciona Geotech, which brings together Acciona’s future construction pipeline in Australia and New Zealand and the Geotech Group of companies.
“You need to be aligned personally – it’s not just about going with the highest bidder.”
Drawing on his successful experience with private equity, he has some advice for other private businesses that are considering going down that path.
“Explore what’s out there and who’s out there. Mostly, it’s about the people you’re interacting with.”
Creating chemistry – how to form the perfect partnership
How can you form a sound relationship with a private equity investor for success like Geotech Group? View more tips like this by PwC's experts in our full infographic.
