Bega continues acquisition spree with peanut firm purchase

29-Nov-2017 - Last updated on 29-Nov-2017 at 03:17 GMT

Bega Cheese has announced its acquisition of the Peanut Company of Australia, further expanding in nut and grocery products. ©PCA

Australia’s Bega Cheese has announced its acquisition of the Peanut Company of Australia (PCA) Limited, further expanding its portfolio of brands outside the dairy sector.

Already this year the firm bought much of Mondelez’s business in the country for AU$460m, including ZoOsh, Bonox, as well as Kraft cheese, nut and peanut butter products, and Vegemite.

Bega will acquire 19.99% of placement shares of PCA for $1.9m and place a $10m takeover bid for all issued shares of PCA not held by Bega.

“The bid, if successful, will also facilitate business expansion opportunities and provide confidence to farmer suppliers to expand peanut plantings and increase production and therefore provide additional supply to our customers,” the PCA board said in a statement.

Likewise, Barry Irvin, executive chairman of Bega, said: “The acquisition of PCA will help grow the supply of Australia-grown peanuts for the manufacture of peanut butter at our Port Melbourne factory and supply to other PCA customers.”

Ian Langdon, chairman of the PCA board, said that Bega had been PCA’s biggest customer since its acquisition of Mondelez’s peanut butter business.

Bega’s acquisition of PCA also ensures continued Australian ownership of the firm.

Bega was advised by Kidder Williams Limited and Addisons Lawyers while Morgans Corporate Limited has been appointed as corporate adviser to PCA.

The PCA board also appointed Ernst & Young Transaction Advisory Services Limited to prepare an independent expert’s report to determine whether the bid is fair and reasonable to PCA shareholders.

The board unanimously recommended that shareholders accept the bid from Bega, subject to the independent expert’s opinion and in the absence of a superior proposal being received.

The takeover process is expected to be completed by the end of the year.

PCA is located in Kingaroy, Queensland, known as Australia’s peanut capital. It has been the country’s leading supplier of locally-grown peanuts to domestic and overseas customers for over 90 years.

Bega says it sells over 1 million packs of cheese a day. It runs two manufacturing facilities, at Bega, New South Wales, and Strathmerton, Victoria.

Bega Cheese’s 2017 financial year results, announced in August, showed a company record profit of $139m.