An Australian private equity firm has bought the New Zealand arm of fast food chain Burger King.

Sydney-based Anchorage Capital Partners has been in talks with Burger King's local owners, Dennis Jones and Mark Backhaus, for some months.

Anchorage officially took over ownership of the 69 company-owned and two-franchised Burger King outlets yesterday.

Activity in the private equity sector stopped almost dead with the credit crunch and this is the first significant transtasman deal since.

Burger King joins a long list of Kiwi investments for the Australian private equity industry.

These include appliance retailer Noel Leeming, book retail chains Whitcoulls and Borders, and health supplements brands Healtheries and Nutra-Life.

Anchorage partner Mark Bayliss becomes chairman of the New Zealand Burger King operation.

He would not reveal what the firm had paid except to say it typically invested in businesses worth $50 million to $150 million. "It's very much in that sweet spot."

Jones and Backhaus first brought Burger King to New Zealand in the mid-1990s. Oil company Shell owned 50 per cent for a time but sold out to the pair in 2002.

Their TPF Group has long been tipped to be looking to exit.

It sold the 61-outlet Hell Pizza franchise back to its founders in May after just three years of ownership.

It had not had the easiest time with the pizza chain, with the recession and a revolt by franchisees over the cost of ingredients and other issues. It paid $15 million and sold it for what the Hell founders referred to as "market value".

Bayliss said Anchorage was a niche private equity player that was hands on in its investment businesses.

It was picky about the situations it got involved with and liked established brands that were underperforming. Previous investments included Australasian food group Golden Circle which it sold to Heinz last year for a substantial profit.

Burger King was nicely established but had reached a stage in its evolution where it required new capital. "It's in need of really taking to the next level," Bayliss said.

Anchorage planned to invest in the brand and the existing network, and to expand the number of outlets.

It was not planning redundancies.

Bayliss said the fast food business had proved to be counter-cyclical during the recession, in that people had traded down from more expensive eating out options.

Former McDonald's executive John Elliott is the new chief executive.

Bayliss, a former chief financial officer for Fairfax in New Zealand, will sit on the board alongside fellow Anchorage partner Phil Cave.

TRANSTASMAN TAKEOVERS
Australian private equity in New Zealand

* Anchorage Capital Partners: Burger King.

* Gresham Private Equity: Noel Leeming (including Bond & Bond).

* Pacific Equity Partners: REDgroup (Whitcoulls and Borders), Hoyts, Veda Advantage, Independent Liquor; Godfreys, Griffin's, Tegel, Startronics.

* Next Capital: Vitaco (Healtheries and Nutra-Life), Hirepool.

* Ironbridge Capital: MediaWorks (TV3, C4, RadioWorks), FleetPartners.

* Quadrant Private Equity: Kathmandu.