Modern Star

Modern Star is a digitally enabled e-commerce provider of educational resources to Australian early childhood centres and schools with a 60+ year heritage. The business is the outright market leader and a one-stop shop offering 30,000+ SKUs across Australia and New Zealand.

When Navis invested in Modern Star in 2014, its objective was to leverage Modern Star’s platform to reach every K-12 educational institution in Australia, grow its share of wallet, and double its market share. This was accomplished through hands-on support on organic growth initiatives and strategic acquisitions.

Navis sold Modern Star to Pacific Equity Partners in late 2020. The transaction valued Modern Star at an Enterprise Value of over A$600 million, with key senior management reinvesting. Navis retained its interest in the China division (“Wisdom”) as part of the transaction.

SECTOR

Education

HEADQUARTERS

Sydney

INVESTMENT DATE

October 2014

NAVIS OWNERSHIP

86%

EXIT DATE

2020

Investment Rationale

*01.

Market Leader in Educational Resources

With over 60 years of brand history in Australia, Modern Star holds strong positions across all key subject verticals in the education resources market.

*02.

Defensive Growth Industry

Education funding per student is on the rise, and educational resources represent a small yet essential portion of school budgets, ensuring stable demand.

*03.

Growth Opportunities

Modern Star is well-positioned to grow market share through a combination of organic growth and strategic M&A initiatives.

*04.

Scalable Platform for Margin Expansion

Investment in a market-leading online platform allows Modern Star to scale efficiently and expand margins as the business grows.

*05.

Expansion into Asia

Modern Star successfully entered the Chinese market through the acquisition of Wisdom, marking a significant step in its Asia expansion strategy.

Navis Value Impact

Digital Transition

Navis continued the transition from a traditional B2B supplier to a digitally enabled e-commerce provider of education products. As a result, Modern Star delivered annual organic growth of 5% above the market.

Operational Value-Add

Navis assisted with multiple operational initiatives, including growing the primary school segment, expanding OEM product ranges, driving supply chain efficiencies, improving sales-force effectiveness, and strengthening human capital

Strategic Acquisitions

Navis drove nine strategic bolt-on acquisitions, which step-changed market share. Navis’s Portfolio Operations supported acquisition integration.

ESG

Navis step-changed Modern Star’s ESG efforts by supporting sustainable sourcing and implementing supplier audits to reduce modern slavery risk.

Exit and Looking ahead

“When we invested in Modern Star, our objective was to leverage its platform to reach almost every K-12 educational institution in Australia, grow share of wallet, and double its market share, which we have successfully accomplished. The business also performed strongly during COVID-19, demonstrating the resilience and diversification of the B2B platform. We wish the management team all the best as Modern Star embarks on the next phase of its growth journey with PEP.”

Philip Latham, Navis Senior Partner in 2020