Affinity Equity Partners has reportedly submitted a competing bid of A$2.2 billion (about $1.7 billion) for Vocus (ASX: VOC) at A$3.50 per share, the same amount KKR initially offered early last month. That’s about equal to the company’s current share price but well below its level from not too long ago: Vocus stock was trading near A$9 per share as recently as last August.
At first, Vocus blanched at selling itself at a potential discount, but the company reportedly opened its books to KKR last week to allow the firm to conduct due diligence. Now, Affinity seems to have decided it won't let KKR get a bargain so easily.
KKR’s interest in Vocus is the latest example of the firm’s fondness for the global communications & networking sector—an area more and more of its private equity peers are beginning to avoid. It also displays the firm’s willingness to zig where others zag in another respect: KKR’s commitment to investing in Australia while other American firms seem largely to have left the continent.
While KKR is no stranger to operating Down Under, Affinity is the real specialist in the region. Every one of the Hong Kong-based firm’s 19 completed private equity transactions since 2005 has taken place in Oceania or Asia, according to the PitchBook Platform, with more than 47% of those transactions occurring in Australia.
Interestingly, Vocus doesn’t represent the first time KKR and Affinity have both had eyes for the same target. In 2009, the two firms teamed up to acquire Oriental Brewery, a major manufacturer of beer in South Korea; five years later, they sold the business to Anheuser-Busch InBev for $5.8 billion.
Check out our previous coverage of KKR.