The company has announced a conditional purchase of Dairyworks for NZ$112m. Dairyworks is one of the larger dairy companies in New Zealand and supplies around 50% of cheese and 25% of butter under its consumer brands.
This acquisition forms part of Synlait Milk’s diversification into everyday dairy and away from infant milk formula. UBS remains unconvinced about the merits of the strategy at this point. Neutral rating. Target is NZ$9.60.
Sector: Food, Beverage & Tobacco.
Current Price is $9.02. Target price not assessed.
