FUNDS MANAGED BY CATALYST AND CHAMP AGREE TO ACQUIRE THE AUSTRALIAN DISCOUNT VARIETY RETAIL BUSINESSES OF MILLER’S RETAIL AND THE WAREHOUSE GROUP FOR A$200 MILLION
Media Release

Catalyst Investment Managers Pty Ltd and its parent PPM Capital Limited (together, Catalyst)and Castle Harlan Australian Mezzanine Partners Pty Ltd, acting on behalf of the CHAMP I and CHAMP II funds (CHAMP), together with management, today announced that they have entered into agreements to acquire the Australian discount variety retail businesses of Miller’s Retail Limited and The Warehouse Group Limited for an aggregate purchase price of A$200 million.

The businesses to be acquired comprise:

- The Discount Variety division owned by Miller’s Retail Limited – 335 discount variety retail stores operating under the brands “Crazy Clarks”, “Go-Lo” and “Chickenfeed” and the wholesale business trading under the name “Look Sharp”
- The Warehouse Australia (TWA) – 122 discount variety retail stores operating under “The Warehouse” brand.

The combined entity will be Australia’s leading discount variety retailer with over 450 stores,
revenues in excess of A$1 billion and a store presence in every state and territory in Australia.

Mr Ian Tsicalas, the current CEO of TWA, will head the combined entity which will bring together the strong management teams from both businesses. Mr Tsicalas has 30 years of retail, sales and distribution experience, having previously held the positions of Managing Director of Howard Smith Limited and CEO of BBC Hardware.

Mr Jonathan Pinshaw will be the Chairman of the combined entity. Mr Pinshaw has 20 years experience in retailing including previous positions as Managing Director of Freedom
Furniture and OPSM. Jonathan is currently the Chairman of Just Group and Barbeques Galore.

Mr Tsicalas, commented, “Each business brings strong management as well as critical and complementary assets to the merged group that can be leveraged to enable sustainability,growth and prosperity.

Through economies of scale, increased buying power and the utilisation of best of breed infrastructure and technology, the new company will provide its employees with a bright future through a bigger, stronger and more focused and efficient company.”

Mr Tsicalas went on to add; ”A renewed focus on the customer’s needs will ensure that the combined company will grow and prosper in the highly competitive discount variety retail
market.”

Executive Director of CHAMP, Mr David Jones commented, “We are pleased to be backing a high quality management team led by Mr Ian Tsicalas and Mr Jonathan Pinshaw in a sector which has proven to have strong fundamentals globally.
The senior management teams of both businesses will be significant shareholders in the new entity and remain committed to the development of these market leading businesses.”

Investment Director of Catalyst Investment Managers, Mr Trent Peterson, said today, “We are excited about the opportunity to capitalise on the strong and complimentary foundations that each business brings to the combined group. Our initial priority is to ensure that both businesses focus on the important Christmas trading period, and delivering to the needs of the Group’s customers.”

Catalyst and CHAMP believe there is fundamental value to be created in combining the businesses into a single entity wholly focused on Australian discount variety retailing.

“Both businesses will become “core operations” of their new parent company, which presents a change for each. This will improve the businesses focus and financial performance.” added Mr Peterson.

“We believe management, staff, suppliers and customers will benefit from the single focus, efficiency and expertise of the combined company.” added Mr Jones. The trading name of the new entity is yet to be etermined, however the existing underlying trading brands will continue. Over the next 2 years the Warehouse stores will also be rebranded as this trademark reverts to The Warehouse Group NZ. Funds managed by Catalyst and CHAMP will provide the majority of the equity for the transaction in equal shares, in partnership with members of the senior management team, who will contribute the balance of the equity.

The acquisitions are subject to usual conditions, including relevant regulatory approvals. Catalyst and CHAMP were advised by Macquarie Bank and Gilbert & Tobin.

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For further information please contact:

Catalyst Investment Managers
Trent Peterson, Investment Director
Ph: 02 9270 1200
trentpeterson@catalystinvest.com.au

CHAMP
David Jones, Executive Director
Ph: 02 8248 8860
djones@champequity.com.au