Big plans for BioPak as private equity bags a stake

Five V Capital manages assets of more than $1.5 billion with a focus on sustainable companies, and is itself a certified B-Corporation, as is BioPak. Smith commended Five V for being “amazing at deal origination” and pointed to an alignment in company values.

“Our two partners give us an amazing source of capital, so there’s no bottleneck to our growth going forward,” he said.

The private equity firm’s involvement will also help BioPak with efforts to bring manufacturing production back onshore, Smith said. Almost all of BioPak’s products are currently being made in China and Taiwan. The company will also seek to lower product prices in the first or second quarter of 2023 by 5-10 per cent to pass on lower freight costs to customers.

BioPak, based in Bondi, has about 65 employees and operates in Australia, New Zealand, the UK, US, Singapore, as well as Europe through Duni Group.

Smith signalled an eagerness to working closely with Five V’s partners in the new year to identify acquisition opportunities in the North America “sooner rather than later”, where he said there are 20-30 companies similar to BioPak, though he said he didn’t have a particular target in mind.

“I’m very aggressive, and I’m very hungry, and I’m very motivated, and I don’t have a whole lot of downtime,” said Smith.

“I do believe that I’ve chosen a partner that has a similar type of crazy behaviour of wanting to really power on aggressively … I really do feel like we’re getting into bed with people that work exactly the same way we do.”

Duni Group’s statement said Five V would be “actively involved with management”, but Smith insisted that Five V’s involvement would not be managerial but rather open up acquisition opportunities and use their expertise to “guide and assist”. Duni Group and Five V’s stake in the company outweigh Smith’s holdings of 15 per cent.

“I cannot openly say that they cannot tell me what to do, but we have a shareholder agreement,” Smith said. “In my mind, I definitely will have final say in the business direction, the business plan, and any potential acquisition.”

Earlier this year, BioPak was the subject of speculation that it was looking to float on the ASX, which ultimately did not come to pass. Smith said this could still be on the cards down the line.

“I’m never going to take off the table opportunities for BioPak, independent of whoever our investors or partners are,” he said. “I’m married to this business, so I need to keep all options open.”

BioPak posted $345 million in net sales and $27 million in profits last year. Its 11,500 customers include McDonald’s, Woolworths, Aldi, Qantas, Commonwealth Bank, Guzman Y Gomez, and more.

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