Deal making ramps up in the food and beverage sector

Following a drop in corporate activity in April and May, deal making ramped up in June and July with nine transactions announced.

Acquisitions announced

Hong Kong dairy company Ausnutria announced in May the acquisition of Victorian dairy manufacturer Australian Dairy Park (ADP). Upon completion of the transaction, Ausnutria will own the manufacturing, packaging and sale of dairy and milk powder products and related research and development activities.

Synlait Milk acquired New Zealand Dairy Company (NZDC) for NZ$33.2 million. NZDC is based in Auckland and is constructing a blending and canning operation capable of making infant formula and milk powders. Synlait expects to invest an additional $23 million to develop the facility.

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Raphael Geminder acquired The Cake Syndicate which includes Susan Day Cakes and Big Sister Foods. It is expected that The Cake Syndicate will be integrated with Green’s Foods. Geminder acquired CVC’s 43.5 per cent shareholding in Green’s Foods in December 2016, making him the largest shareholder of Green’s Foods. Expectations are that Geminder will use Green’s Foods as a vehicle for further acquisitions in the food and beverage industry in Australia, replicating the approach that proved to be successful in for the Pact Group.

Listings on the ASX

Oliver’s Real Foods, a fast food chain that serves certified organic product to customers, listed on the ASX in June 2017.

Allwellness Holdings, an Australian based pharmaceutical manufacturing group that exports product to China, listed on the National Stock Exchange.

Deal activity notably increased following the June 2017 financial year end and we expect this high level of activity to continue for the remainder of 2017.

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[Ben van der Westhuizen and David Baveystock are directors of Comet Line Consulting, an advisory business that specialises in acquisitions and divestments within the Australian food & beverage industry. For more information visit www.cometlineconsulting.com.au.]

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