M and A activity making news in Australia’s food sector
Growing investor interest in the Australian processed food sector and divestments by large Australian food manufacturers are becoming more frequent. The recent drop in the Australian dollar and export market opportunities may be driving some of the renewed interest for investors to buy into Australian food companies.
New Zealand companies are amongst some of the recent acquirers.
Australian food group Goodman Fielder has announced it has sold its biscuits business to food manufacturer Green’s Foods, and plans to sell off its meats and pizza businesses in New Zealand.
Meanwhile, private equity firm Anacacia Capital has invested in family-run Australian seafood and dips manufacturer Yumi’s Quality Foods.
Goodman Fielder continues divestment strategy
Goodman Fielder said it had sold its biscuit business, which includes brands such as Paradise, Cottage, Vive and Veri Deli, to Green’s Foods for $17 million. It has continued its divestment strategy by announcing plans to sell of its meat and pizza businesses in New Zealand.
Australian Food News reported in August 2013 that Goodman Fielder had returned to growth, after having faced a challenging year because of rising input costs and retail competition. At the time, the Company said it would continue to progress its strategic objectives to strengthen the group’s financial position and refocus the Company on its core categories where it had “the greatest capacity to succeed”.
Biscuits business sold at a loss
The Company said the sale of its biscuits business would result in a non-cash impairment of between $50 million and $55 million on its half-year accounts, but said the sale was part of a long term strategy.
“It allows us to concentrate our internal resources and investment on our core brands within the grocery division where we have profitable, category leadership positions,” said Chris Delaney, Goodman Fielder Chief Executive Officer.
Meat brands sold to a Kiwi company
Goodman Fielder has agreed to a proposal to sell its meat business to New Zealand-based meat company Hellers. Goodman Fielder’s meats business processes and markets smallgoods in New Zealand with brands including Kiwi, Hutton’s, Brook’s Deli, Milano and Sizzlers.
The Company said the consultation process for the sale includes the proposal to transfer Goodman Fielder’s processing activities in Frankton, Hamilton, to Hellers’ sites in Christchurch and Auckland, which would see the closure of the Frankton site. Goodman Fielder said the site’s 125 employees will be provided the opportunity for redeployment at other Goodman Fielder sites across New Zealand, where possible, or possibly with Hellers. Failing this, redundancy packages will be provided.
Pizza and Pies to go to another Kiwi
The Company has also agreed to a proposal to sell its pizza businesses to Mommas Frozen Products, subject to consultation with employees who work on the pizza line at the Irvines pie factory in South Auckland.
The pizza business’ primary brand is Leaning Tower, which is available through supermarkets and convenience stores throughout New Zealand.
New Goodman Fielder Chief Financial Officer
Goodman Fielder also announced the appointment of a new Chief Financial Officer, Patrick Gibson, in December 2013. Mr Gibson joined Goodman Fielder from Brambles Ltd where he had been the Group Financial Controller since 2008. Prior to his role at Brambles Ltd, Mr Gibson held a number of senior finance roles in the Fast Moving Consumer Goods (FMCG) industry in a career spanning nearly 20 years with Unilever across Europe, the Middle East and Africa.
Meanwhile, Anacacia Capital invests in Yumi’s
Meanwhile private equity company Anacacia Capital has invested in Australian seafood and dips manufacturer Yumi’s Quality Foods.
Jeremy Samuel, Anacacia Capital’s Managing Director, told The Australian newspaper that the dips market was “tough” in Australia because there were some strong players in the market, but that Anacacia’s research found Yumi was the “standout” in terms of potential.
“Australia has a strong competitive advantage in branded healthy food,” Mr Samuel said. “Backing a small private company, you have to ensure you’re backing the absolute best people, and it segments you think are growing where you have a strong, competitive advantage,” he said.
Australian Food News reported in July 2013 that Anacacia Capital had successfully exited another food company, Rafferty’s Garden, after international consumer products group PZ Cussons acquired the Australian premium baby food brand for $70 million.
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