PEP buys Australia's Allied Mills

The transaction will see PEP take a 100% stake in Allied Mills from its backers GrainCorp and Cargill Australia, which hold 60% and 40% respectively. In a release GrainCorp said the GP will pay A$190 million for its stake.

In a separate statement, PEP said Allied Mills will be integrated with Pinnacle, the baked goods manufacturer that the GP acquired from Irish food giant Kerry Group in 2015 for a reported A$250 million. The GP plans to build the combined company into a leader in the frozen specialty baking, in-store baking and bakery ingredients spaces. The deal is expected to close in the next three months, subject to regulatory approval.

“Allied Mills has built a deserved reputation for innovative food solutions tailored to the changing needs of our customers,” said Allied Mills Managing Director Joseph Di Leo. “Our combination with Pinnacle will offer customers a one-stop-shop across bread and sweet bakery products. It’s an exciting time for the sector and with PEP committed to investing in the combined company’s strategic assets, there is very solid growth potential.” 

Cargill and GrainCorp acquired Allied Mills from Australian breadmaker Goodman Fielder in 2002. In its most recent annual report GrainCorp reported the book value of its interest in the company as A$178 million, up from A$168 million the prior year. Over the same period Allied Mills’ revenue rose from A$498 million to A$506 million, while profit dropped from A$32 million to A$31 million.

PEP is investing out of its fifth Australia and New Zealand-focused fund, which closed in 2015 at A$2.1 billion. The GP has made a number of acquisitions in both countries’ food sector, including Australian snack maker Patties Foods, bought last June for A$230 million; and New Zealand-based Manuka Health, acquired from Waterman Capital in 2015 for an undisclosed amount. It has also made several exits in the sector, such as Griffin’s Foods and Peters Ice Cream.

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• Topics
• Australasia
• Buyouts
• Consumer
• Australia
• Pacific Equity Partners