Mercury Capital Fund 3

Mercury Capital Fund 3 (Mercury 3), is a $600m mid-market expansion fund, managed by Sydney based Mercury Capital ( an independently owned, Australian private equity fund manager investing primarily into mid-market sized businesses within Australia and New Zealand.

Mercury’s core focus is investing in established businesses with market leading positions. Mercury seeks to add value through developing and executing a strategic plan to generate growth. Mercury’s approach is to work closely in partnership with existing owners and managers to enable a business to realise its full growth potential.

The Fund will focus on mid-market private equity transactions in Australia and New Zealand, and therefore anticipates making six to eight investments, with a focus on businesses with enterprise valuations of between A$100m and A$250m.

Mercury Capital’s strength is their knowledge. The Investment Manager and Board has significant experience from a number of highly successful private equity investments in Australia, New Zealand and the US. The teams’ diverse expertise also includes successfully starting, growing and selling significant businesses and from operating at senior board and management positions in companies throughout Australia and New Zealand.

Mercury Capital Fund 3 has completed five investments to date, into Squiz, MessageMedia, TEG, Bauer Media and ResourceCo

Squiz. On 20th August 2019, Mercury Capital Fund 3 entered into an agreement to acquire a minority shareholding of Squiz Pty Ltd “Squiz”, Australia’s largest Content Management System.

Based in Sydney, Squiz is Australia’s largest Content Management System (xCMS) and Enterprise Search business with ~439 employees and operations across Australia, New Zealand, UK, Poland and US. Squiz has established a market leading position in Australia in the highly attractive niches of government and higher education. Additionally, Squiz has developed a strong and successful presence in the UK, securing marquee customers in its core niches. Mercury believes a significant opportunity exists to grow the business in the US market. Squiz has enjoyed significant recent success securing customer contracts in key cities across the US. This is despite a very small on-the- ground salesforce.

MessageMedia. During November 2019, Mercury Capital Fund 3 signed an agreement to acquire a minority shareholding in Message4U Pty Ltd (“MessageMedia”). Based in Melbourne, MessageMedia is Australasia’s largest business-to-person messaging business with international operations in the United States and the United Kingdom.

Message Media operates nine brands with an active customer base of ~ 29,000 businesses who are primarily small and medium enterprises and with a small base of enterprise and government customers. The business is well established with robust systems and processes and a term of ~200 staff. Message Media was established by Grant Rule in 2000 and is based in Melbourne. Over 18 years, Message Media has grown to become the market leader with an estimated 30% share of the Australian Application-to-Person (ATP) business messaging market. More than 5.3 billion messages are sent per year and growing at 10% per year of which 1.6 billion were sent via the Message Media gateway in FY18 across Australia, New Zealand, the United States and the United Kingdom.

Mercury Capital Fund 2 invested in MessageMedia in July 2018. In that time, Mercury has built a strong and trusted relationship with Mercury Capitals Management, which has helped the Fund to implement a number of changes to position MessageMedia to deliver strong business performance.

TEG. On 2 March 2020,  Mercury Capital Partners Fund 3 was pleased to announce the third investment for the fund by acquiring a minority shareholding alongside global Private Equity firm Silver Lake into TEG, the market leading live entertainment business in Australia and New Zealand. TEG’s primary operating businesses are market leaders in their respective categories and include the event ticketing business Ticketek and event promoters TEG Dainty and TEG Live.

TEG holds ~70% market share in ticketing for large concerts and top tier sports events (primarily via its core ticketing brand, Ticketek) and is #2 in event promotion (via its promotion brands TEG Dainty and TEG Live) with a focus on tier 1 concerts. TEG employs ~500 staff across its operations in Australia, New Zealand, South East Asia and the United Kingdom.

Bauer ANZ. On 1 July 2020, Mercury Capital Fund 3 announced the investment in Bauer ANZ, Australia’s leading magazine publisher with a strong presence also across digital, books and other media.

Bauer ANZ is Australia’s leading magazine publisher with a strong presence also across digital, books and other media. Bauer operates 48 print titles and 30 digital platforms spanning multiple categories including Women’s, Homes, Food, Fashion & Beauty, Specialist Motoring and Industry. Key master heads in the Bauer ANZ portfolio include Australian Women’s Weekly Woman’s Day and New Idea.

Bauer operates 4 offices across Australia with a total FTE base of 662 which includes 267 editorial and 163 advertising permanent staff.

ResourceCo. On December 2, Mercury Capital Fund 3 announced the investment into ResourceCo, Australia’s largest private waste to energy and tyre recycling business, with over 750 staff across 18 sites in Australia (Adelaide, Brisbane, Melbourne, Perth and Sydney) and Malaysia.

ResourceCo is a scale business with a 30-year track record of growth. It is the clear Australian leader in waste-to-energy, clear market leader in tyre recycling and recovery and has well-established and highly profitable businesses across construction and soil recycling and remediation.

ResourceCo comprises eight business units across three divisions:

  1. Waste-to-energy division
  2. Tyre recycling and recovery division
  3. Recycling and waste management division

The business has a proven track record of partnering with government and multinational companies like SUEZ, Lafarge, Daicel, Cemex, Bridgestone, Boral, Adelaide Brighton Cement, Lendlease and Cleanaway to add value to otherwise discarded materials.

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