Bega Cheese Limited (“Bega Cheese”, “BGA”) is pleased to announce that it has entered into a binding Share Sale and Purchase Agreement to acquire all of the shares in Lion Dairy & Drinks (“LD&D”, “Company”) for a net acquisition price of $534 million1 (“Acquisition”). Completion of the Acquisition is anticipated to occur at the end of January 20212.
The Acquisition will be funded by a combination of new and extended debt facilities and the proceeds from a $401 million underwritten entitlement offer and placement.
Commenting on the Acquisition, Bega Cheese’s Executive Chairman, Barry Irvin, said “we are delighted to announce this acquisition which we believe will create significant value for shareholders. The acquisition delivers important industry consolidation and value creation with synergies across the entire supply chain. The expanded product range, manufacturing and distribution infrastructure and brand portfolio realises our ambition of creating a truly great Australian food company.”
LD&D’s core business is the manufacture, marketing, sales and distribution of:
Significantly, LD&D also has Australia’s largest national cold chain distribution network supplying food service and convenience stores. The Company has a national manufacturing footprint comprising 13 sites.
The Company also has significant joint ventures and alliances with:
Financial Overview
Compelling Strategic Rationale
The Acquisition expands and optimises Bega Cheese’s branded foods portfolio:
Bega Cheese’s Chief Executive Officer, Paul van Heerwaarden, said “we are very pleased with the performance of acquisitions made in recent years which are achieving or exceeding our profit targets. The recent company restructure and ERP implementation will allow us to integrate this Acquisition and take advantage of the various synergies and growth opportunities across domestic and international markets.”
Bega Cheese is advised by Kidder Williams Limited and Addisons Lawyers.
1 Net acquisition price represents gross sale price of $560 million less a $26 million deduction for IT separation costs (net of tax)
2 Adjustments to be made following completion in respect of various matters including debt and working capital
3 Assuming Bega FY20 revenue and LD&D LTM Sep-20 revenue of $1.6 billion
4 Represents post-AASB 16 pro forma normalised EBITDA, including Vitasoy JV: 49% of NPAT and a management fee, and 75% of CCFA earnings
5 Comparative EPS for the Company takes into account a theoretical ex-rights price adjustment for the entitlement offer and excludes one-off costs and any impact of acquisition accounting
6 FY22 includes synergies of $36m
November 26, 2020
For further information please contact:
Barry Irvin
Executive Chairman
Bega Cheese
02 6491 7720