Page 5 - Food & Drink Magazine Jan-Feb 21

NEWS
Arnott’s to buy Freedom Foods’ Cereals and Snacks
THE Arnott’s Group will buy the Cereals and Snacks business from Freedom Foods Group (FFG) for $20 million in cash with the sale due to be completed by 1 March 2021.
The sale includes brands Freedom Foods, Messy Monkeys, Heritage Mill, Arnold’s Farm and Barley+, as well as manufacturing facilities in New South Wales and Dandenong in Victoria.
The Arnott’s Group CEO George Zoghbi said the acquisition would bring new capabilities in portable snacks and allergen-free products, including gluten- free foods and muesli bars to the group.
He said: “It will accelerate our strategy of entering new product categories and unlock innovation to benefit customers and consumers. It will also add three Australian manufacturing sites to our already well-invested domestic supply chain.”
Following the sale of the Freedom Foods cereal brands, FFG will change its corporate name.
The company’s FY20 financial results showed Cereal and Snacks revenue fell 14 per cent to $70 million, with the adjusted EBITDA pre- AASB16 loss rising slightly to $32.1 million.
Unrealistic operational costing budgets and ineffective trade spend in the retail channel
were to blame, as were numerous poor outcomes from NPD.
Interim CEO Michael Perich said the divestment of its underperforming Specialty Seafood business was also on the cards.
With the sale of Cereal and Snacks, FFG will now focus on rebuilding the business with the two remaining profitable portfolios.
In FY20, its Dairy and Nutritionals business saw revenue up 37 per cent ($362.9 million), despite the company wrestling with operational issues that resulted in high waste, lower lactoferrin yields and surplus milk traded at a loss.
Bega buys Lion D&D
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Slater & Gordon has filed a class action against Freedom Foods Group and its auditors, Deloitte Touche Tohmatsu in the Victorian Supreme Court. The action is on behalf of shareholders who acquired shares in the company between 7 December 2014 and
24 June 2020.
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ARNOTT’S BUYS FFG CEREALS, SNACKS
The Arnott’s Group will buy the Cereals and Snacks business from Freedom Foods Group for
$20 million in cash. The sale is set to be completed by 1 March 2021.
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ARNOTT’S UPGRADE
Arnott’s Group announced an
$8 million upgrade to its Shepparton plant, as part of an infrastructure investment program to upgrade its facilities over the next three years.
BEGA Cheese will acquire all shares in Lion Dairy & Drinks (LDD) for $560 million. The purchase will be completed by the end of January.
The net acquisition price is $534 after a $26 million deduction for IT
separation costs.
Bega Cheese executive chair Barry Irvin said: “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.”
Bega said the combined business is expected to generate more than $3 billion in revenue.
It anticipates base case synergies of $41 million annually and FY22 double-digit earnings per
share accretion.
BIG PLAYER
The acquisition catapults Bega into a large-scale dairy and foods business with a significantly expanded domestic distribution network, increased product portfolio and a consumer packaged goods supply chain and organisational
capability. It will grow from seven manufacturing facilities to 20, from 10 distribution centres and warehouses to 146.
Its core dairy footprint will increase from 955 million litres to 1.7 billion litres while its manufacturing and milk collection footprint will also expand, particularly into the prime Gippsland dairy region.
LDD has Australia’s largest cold chain distribution network supplying food service and convenience stores.
It also brings new branded dairy categories to the company, with milk-based beverages, yoghurts, cream and custard.
Some of its brands include: Dare, Farmers Union, Yoplait, Pura, Dairy Farmers, Juice Brothers and Daily Juice.
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