A new substantial listed Australian food group will be created from a complex deal involving SPC, The Original Juice Co (ASX:OJC) and the local powdered milk operations of a Singapore-based group.
In an announcement on Wednesday, The Original Juice Co (OJC) said it will acquire SPC Global and the powdered milk business owned by Nature One Dairy via a binding merger implementation deed and share sale agreements.
The deal is subject to several conditions including approval by OJC shareholders at a meeting in November.
OJC intends to issue 133 million shares to the shareholders of SPC as consideration for the deal. It also intends to issue up to 29 million shares and pay cash of up to $6 million to the shareholders of Nature One Dairy.
On completion of the transaction, the new company is expected to deliver more than $400 million of revenues and more than $29 million of EBITDA in 2024-25.
SPC will dominate the new company, with its shareholders owning 69.2%. Shareholders in OJC will have 15.5% and NOD shareholders will own around 15.3%.
Former Asahi Beverages Group CEO and current SPC director Robert Iervasi has been appointed CEO of the new company, which will be run with three divisions – SPC, The Original Juice Co and Nature One Dairy.
SPC is based in northern Victoria and is the largest producer of fruit, canned tomatoes, baked beans and spaghetti processing, packaging, and canning operations in Australia.
It owns well-known food brands, such as SPC, Ardmona, Goulburn Valley, ProVital, Pomlife, the Good Meal Co, and Street Eats.
The Original Juice Company is a well-known Australian food processing company specialising in chilled fruit and vegetable juices and producing fresh juice daily for over 30 years.
Nature One Dairy is a small, Singapore-registered, Australian-founded dairy company that manufactures and sells premium infant formula, nutritional formula and milk powder products. With an established sales and marketing footprint in Australia, China and other Asia Pacific markets, products are sold under the Nature One Dairy brand.
Nature One Dairy has an international market presence for the combined business through product diversification and access to Asian markets.
The three businesses when merged will create a substantial Australian based and owned global food and beverage business behind the likes of Norco and Bega (as Australian-owned companies).
“SPC Global is excited to be joining with OJC and Nature One Dairy and come to market with a leading food and beverage platform,” Mr Iervasi said in Wednesday’s statement.
“With our market leading packaged fruit, canned tomatoes, and baked bean products, we are excited to expand with OJC both domestically and globally and see significant synergy potential in bringing the two producers together."
The dairy sector is a bit of a disaster area at the moment, with King Island to be closed next year, the Adelaide-based Beston Global Foods (ASX:BFC) in administration and looking for a buyer and Maggie Beer looking to sell its Paris Creek Farms dairy operation.
As well, Fonterra (ASX:FSF) has its Australian consumer business on the market, led by its right to produce Bega Cheese, as well as Western Star, Mainland and Perfecto Italiano products.
