The Merger
Iconic fruit and vegetable manufacturer SPC started over 100 years ago and acquired from CocaCola-Amatll by a consortium led by Hussein Rifai’s Perpetuity Capital in 2019 - for $45m, has agreed to merge with the Original Juice Company(OJC) and the powdered milk business, Nature One Dairy.
SPC shareholders will have 69 per cent of the new company, Original Juice Co shareholders 15.5 per cent, and Nature One Dairy shareholders will have 15.3 per cent.
OJC is currently listed at $50m (one times revenue ) implying a merged value at circa $333m.
The Projection and the opportunity
The combined businesses are expected to deliver more than $400 million in revenue in the next financial year - and with economies of scale is expected to make a profit of $29m in 2025 and grow from strength to strength says Rifai.
“We want to become the Nestle of Australia. We want to become a global player in the food industry out of Australia,”
It’s interesting to note that CCA acquired SPC for $759m in 2005 and 15 years later to the Shepparton Partners Collective led by Perpetuity for $45m
Bringing these companies together in a business with a turnover of $400m can give economies of scale making significant profits ..
The Players
The major SPC shareholder is boutique investment house Perma Funds Management. Other shareholders include the meat industry superannuation fund Australian Food Super, and the billionaire Shahin family which sold the On the Run petrol station business to ASX-listed Viva Energy for $1.2 billion in 2023.
OJC an asx listed company is chaired by Jeff Kennet (who will retire when the deal is done) and led CEO Steven Cail who is expected to stay with the business
Nature One Dairy CEO Nick Dimopoulos, will continue with the combined business for the transition period
Former Asahi Beverages Group CEO and SPC director Robert Iervasi will be appointed managing director of the merged business, and chaired by Hussein
NAME | NEW ROLE | CURRENT ROLE |
Hussein Rifai | Non-executive chairman | Executive chairman SPC |
Andrew Cohen | Non-executive director | Executive director SPC |
Kerry Smith | Non-executive director | Non-executive director OJC |
Adam Brooks | Non-executive director | Non-executive director OJC |
Robert Iervasi | Managing director | Non-executive director SPC |
David Mallinson | Interim CFO | SPC CFO |
Nick Dimopoulos | Head of NOD and Asian market | Nature One Dairy CEO |
The Products
The main brands in the SPC business are SPC, Ardmona, Goulburn Valley, and ProVital.
The Original Juice Co lbrand is the third-largest orange juice producer in the country.
Nature oNe Dairy is a Singapore registered company that produces manufactures and sells infant formula, nutritional formula and milk powder products
The Vote
The vote by shareholders to approve the merger will be held in November.
Sources
Kuisine Group and 100 per cent of Melbourne beverages group Helping Humans, which makes juices and kombuchas. https://www.afr.com/street-talk/spc-calls-in-grant-samuel-to-scout-deals-20220329-p5a8xp
https://www.just-food.com/news/australias-original-juice-company-spc-nature-one-dairy-merger/
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