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MACQUARIE DRILLS DEEP INTO BOART LONGYEAR

02 March 2007 11:00AM
March 1 must be a very special date on the calendar of Macquarie Bank executive director Robin Bishop.It was on this day in 2006 that Macquarie announced the A$1.08 billion IPO of Dyno Nobel Ltd, the mining explosives company that Macquarie had purchased to facilitate a broader strategy for Orica Ltd and which reaped the bank an estimated profit of more than $250 million.And it was on this day in 2007 that Macquarie announced details of the $2.8 billion IPO of drilling group Boart Longyear. Macquarie led a majority purchase of the group barely six months ago to facilitate an exit for its private equity investors. The deal may generate an even greater profit for the bank as it makes its own exit and clips the ticket for advisory, performance and lead management fees along the way.Both deals were masterminded by Bishop, entrenching his position as one of the chief rainmakers at the bank, and one of its most innovative thinkers who is helping perfect the virtuous circle of principal investment, advisory work and fee generation.Both Dyno and Boart delivered Macquarie profits from its role as investor, advisory fees from the original purchase, and fees for managing and co-ordinating the IPO. In the case of Boart, Macquarie also expected to reap a healthy performance fee from the consortium of investors who bought a 43 per cent stake in August, and who will retain a 10 per cent stake after the IPO.Macquarie itself bought a 17 per cent stake for around $100 million, and its remaining two per cent stake will be worth some $6 million after the IPO is completed. It is not clear how the debt was structured.(And why March 1? No, it's not Bishop's birthday. It is the first day after the profit season and one of the last days an IPO can be launched and completed by Easter. Perhaps it will become an annual event.)

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