Lead Manager

BABCOCK & BROWN PROSPECTUS
Representative transactions
Initial
investment
Company Description date
Commander Babcock & Brown acquired a voting interest in 19.9% of the shares in a
2003
publicly listed business communications company specialising in voice, data
and internet business systems
PrimeLife
ERG
AUSDOC
MTM
Carillon
Babcock & Brown acquired 19.9% of one of Australia’s largest listed
retirement and aged care businesses
Babcock & Brown provided a bridge facility to a debt-for-equity swap
transaction for this listed developer and supplier of transit industry fare
management and software systems, and smart cards
Babcock & Brown acquired shares in an undervalued listed company with
diverse activities.The company was ultimately acquired at a significant premium
to the average Babcock & Brown purchase price (see case study below)
Babcock & Brown made a public takeover offer for the listed MTM
Entertainment Trust in 2001. Major assets included four IMAX theatres and
other retail/tourism assets
Babcock & Brown acquired an undervalued listed company with diverse
assets (see case study below)
2003
2002
2001
2001
2000
Case study AUSDOC
AUSDOC was a publicly listed Australian company with four operating divisions, Freightways,
Information Management, Express Services and DX/GoMail providing services including time-sensitive
couriers, express freight, records management and document exchanges. Babcock & Brown’s investment
thesis was predicated on the Freightways and Information Management businesses, which accounted for
a majority of total earnings, being good and eminently saleable businesses whose intrinsic value was
being temporarily ignored by the market due to poor performance and negative sentiment surrounding
the Express Services and DX/GoMail businesses.
In August 2001, Babcock & Brown commenced buying shares in AUSDOC at a time when market
sentiment towards the company was near an all-time low. Babcock & Brown and its clients built up
holdings in AUSDOC from August to December 2001 at an average entry price of approximately $1.50.
Following an approach to the AUSDOC Board by Babcock & Brown and the requisitioning of a meeting of
all AUSDOC shareholders by Babcock & Brown, the Board ultimately put the company and its component
businesses up for sale. This culminated in an all-cash takeover bid for the company by ABN AMRO Capital
at $2.15 per share, which was announced in June 2002 and subsequently closed successfully.
Babcock & Brown and its clients sold their holdings at various stages during this process. Most investors
sold their shares after the takeover bid was announced but prior to its successful completion at
approximately $2.10 per share. Babcock & Brown’s clients earned pre-tax IRRs in excess of 50%, net of
fees paid to Babcock & Brown.
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