Pohutukawa II invests in Energyworks

10 February 2014


Dear Shareholders

 We are pleased to confirm Pohutukawa Private Equity II’s seventh investment.

Direct Capital IV together with Pohutukawa Private Equity II  has announced the completion of an investment in Taranaki-based, Energyworks Limited, New Zealand’s leading provider of mechanical services to the onshore oil and gas, power generation and petrochemical industry. 

 Direct Capital IV and Pohutukawa II have acquired a 70% shareholding in the company. Pohutukawa II’s shareholding is 16.7%.  Pohutukawa II has funded this significant investment using existing cash resources and our bank facility.


 Future Call 10c

To cover the funding for this investment, Pohutukawa II directors have resolved to make a further call on shareholders for 10 cents per share. A call notice will be issued on 25 March 2014 and will be due 24 April 2014. Pohutukawa II shares are currently paid to 47 cents, so this call will take paid up capital to 57 cents per share.

 Please read the full media release below.

John McDonald



Media Release

Energyworks Limited


10 February 2014


Direct Capital IV together with Pohutukawa Private Equity II today announced that it had completed an investment in Taranaki-based, Energyworks Limited, New Zealand’s leading provider of mechanical services to the onshore oil and gas, power generation and petrochemical industry. 

The investment is alongside the existing owners, managing director, Dallas Chadwick and chief executive, Allen Clarke, both of whom will continue to be significant shareholders in the company and continue to manage the business.  Direct Capital’s Mark Hutton will join the Energyworks board and an independent director is expected to be appointed.    

Established in 1972 the company employs more than 200 specialist engineering staff and is one of the largest service providers to clients across the oil and gas, power generation, and petrochemical industries, with the onshore gas sector representing the bulk of its revenue base. 

Taranaki is New Zealand’s energy province and home to the nation’s oil and natural gas production.  The combination of New Zealand’s harsh coastal environment, client and statutory requirements around maintenance of plant and equipment provides Energyworks a solid base of recurring maintenance and shutdown work.  The company also provides facility modification, expansion and greenfield services, constructing everything from oil and gas gathering pipelines through to production stations, export pipelines, metering stations, power stations and storage facilities.  In January, the company also expanded its industrial coatings division, commissioning a new purpose-built 2500 m2 facility for blasting, coating and storage.

“Allen and I are pleased to be partnering with Direct Capital in the business,” commented Dallas Chadwick. “The business is continuing to grow and our capital base needs to be able to grow with it.  We also have an important role in our local community here in Taranaki and bringing in a partner that is like-minded was also critical.” 

For Direct Capital, the investment in Energyworks represents the seventh investment from its Direct Capital IV / Pohutukawa II fund, which raised $325 million in 2009 to invest in private companies.  The firm invests alongside owners and managers of successful private companies looking to fund growth, expand into Australia, plan succession, or simply provide a more flexible capital structure for growth companies. 

2014 sees Direct Capital celebrating its 20th anniversary and the investment in Energyworks continues an investment approach that has been consistent since the firm began in 1994. 

“Investing in successful privately owned companies looking to grow, and doing so alongside management who are also owners in the business, and therefore focussed on creating shareholder value, has been the strategy we started with in 1994,” said Direct Capital’s Mark Hutton.  “Our approach remains the same today because it works and the success of our companies such as Ryman Healthcare, PC Direct, Eftpos New Zealand, EziBuy, Express Logistics, GoBus demonstrate a track record of success over a very long time.”

“Energyworks offers many of the same attributes, the company is well-established, it’s the leading provider within its sector, the sector offers a lot of growth independent of oil exploration activities, and the management team has proven to be highly capable,” continued Mr Hutton.  

While there won’t be any operational changes, the strategic focus for the company includes establishing longer-term maintenance contracts with clients, increasing the range of engineering services provided and expanding to new geographies.