Goodman Fielder (GMF) announced that it has entered into an agreement to sell its commercial oils business, Integro, to a consortium comprising GrainCorp and Gardner Smith for A$170 million (including net cash proceeds of Integro receivables and payables). The transaction is expected to be completed in early October 2012, subject to the satisfaction of conditions, including employee consultation under applicable New Zealand requirements. By this time it is expected that GrainCorp will have completed its acquisition of Gardner Smith. The sale does not include the out of home business in Australia, or Goodman Fielder’s Asia Pacific fats and oils business. Goodman Fielder Chief Executive Officer, Chris Delaney, said the transaction was consistent with the company’s strategy to optimise its portfolio by focusing on its core categories.
“We are very pleased with the outcome of this transaction. As we first indicated to the market in November 2011, Integro is a well-performing business; however, given our focus on retail branded categories, it is not core to Goodman Fielder. “This divestment enables us to concentrate our investment and internal resources on our core categories and brands. We have also structured a long term supply partnership with GrainCorp to ensure Goodman Fielder maintains an efficient supply of strategic raw materials.”
Goodman Fielder expects to book an estimated profit on the sale of $25 million before tax. Net proceeds of the sale of approximately $165 million will be used primarily to reduce debt and further strengthen Goodman Fielder’s balance sheet. “We are pleased to have made further progress in executing our strategic plan and delivering on the objectives we previously outlined to the market,” said Mr Delaney. “We look forward to outlining our strategy in greater detail on 3 September at our investor day.” Greenhill Caliburn acted as financial advisor and Freehills and Bell Gully acted as legal advisors to Goodman Fielder.
Goodman Fielder is Australasia’s leading listed food company. The company has an excellent portfolio of well known consumer brands in some of Australia’s largest grocery categories, including MeadowLea, Praise, White Wings, Pampas, Mighty Soft, Helga’s, Wonder White, Vogel’s (under licence), Meadow Fresh and Irvines. Our products cover every meal, including breakfast, lunch, dinner and snacks. We produce bread, milk, margarine, flour, dressings, condiments, mayonnaise, frozen pastry, cake mix, pies, savouries, smallgoods, chilled and frozen pizza, desserts, sauces, vinegar and cooking oils. Goodman Fielder is also the largest supplier of flour to New Zealand commercial customers.