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© 2007 Paragon
Advisory Pty Ltd
Power line firm sells down stake to Paragon
POWER line construction firm Cowell Electric has sold a “significant minority stake” to Adelaide investment fund Paragon Equity for an undisclosed sum.
Cowell founder and chairwoman Sue Chase has reduced her shareholding in the company from 89.1 per cent to “just over 50 per cent”, she said.
It is a significant point for a business that was placed in administration in 2000, Ms Chase said.
“We've had some pretty bad times since 2001,” she said. “We were a bit strained and not making money.
“But we have grown strongly over the past three years, almost doubling our turnover every year.
“Part of the idea of selling was to expand our financial capacity to grow further. We saw a lot of opportunities coming through the mining sector.”
Paragon's investment would fund further training and development, another two or three apprenticeships and some management roles, Ms Chase said.
Paragon chief executive Geoff Thomas said it was Paragon's first regional investment. “We saw mining services was something that would grow and we were keen to get some investment in that area,” he said.
“The firm is doing well on its own. It is profitable as it is but Sue was attracted to the idea of getting some cash out.
“We are buying shares off the existing shareholders and they are getting the chance to sell down their stake and take some cash off the table.
“But we are still investing because we believe there is growth - it is just growth we do not have to fund ourselves.”
Paragon chairman Greg Boulton will join the Cowell board immediately. A second Paragon nominee will be appointed in a couple of months and may replace an existing board member.
But Mr Thomas said there was no intention to move the company away from its regional base. “Too often, investors view anything beyond Gepps Cross as being too far away,” Mr Thomas said.
“It is really important for rural companies to maintain their head offices in the small towns. The same way we in Adelaide want head offices to remain here, head offices should remain where they are best suited.”
“Cowell's core expertise is in that region around the edge of South Australia, where there are no power grids in place.”
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