Canadian dairy manufacturer Saputo has announced it will buy Murray Goulburn for $1.31 billion.
The purchase price for the transaction is on a debt-free basis and will be financed through a newly committed bank loan.
The transaction, which is unanimously recommended by the Murray Goulburn Board of Directors in the absence of a superior proposal, is subject to the approval of MG shareholders and customary conditions (including foreign investment approval and clearance by the Australian Competition and Consumer Commission) and subject to an Independent Expert concluding that the transaction is in the best interest of MG shareholders. The transaction is expected to close in the first half of calendar year 2018.
MG produces a full range of high-quality dairy foods, including drinking milk, milk powder, cheese, butter and dairy beverages, as well as a range of ingredient and nutritional products, such as infant formula.
MG supplies the retail and foodservice industries globally with its flagship Devondale, Liddells and Murray Goulburn Ingredients brands.
Murray Goulburn has approximately 2,300 employees and operates eleven manufacturing facilities across Australia and China.
For the twelve-month period ended on June 30, 2017, MG had revenues of approximately CDN$2.5 billion (A$2.5 billion) and earnings before interest, taxes, depreciation, amortization, milk supply support package forgiveness, rationalisation costs, write-downs and non-recurring costs (“adjusted EBITDA”) of approximately CDN$78 million (A$79 million).
The acquisition of Murray Goulburn will add to and complement the activities of Saputo’s Dairy Division (Australia). By acquiring a well-established industry player, the Company reinforces its commitment to strengthen its presence in the Australian market. Saputo intends to continue to invest in its Australian platform and contribute to the ongoing development of its domestic and international business.
Moelis & Company is acting as financial advisor to Saputo, while Ash St. Partners Pty Ltd and Clayton Utz are acting as legal counsel. National Bank Financial and BMO Capital Markets are co-lead arrangers and joint bookrunners.