Archer seeks Asian partner to boost Brownes Dairy – report
Archer Capital is said to be seeking an Asian partner to invest in Brownes Dairy and help the milk producer market its products overseas, particularly in China.
According to The Australian, Archer decided on this course of action in part after becoming frustrated at retailers such as Woolworths and Coles putting downward pressure on prices paid to milk suppliers. The private equity firm wants an investor to buy a significant stake in the business, with a deal likely to value Brownes in the region of A$250 million.
Archer took ownership of Brownes in 2010 when it headed a consortium that bought the business from New Zealand's Fonterra. Last year the company agreed to buy Ravenhill Dairy's brand, processing assets and milk supply as it bids to double turnover to A$400 million over the next five years and steal a march on Western Australia rivals Harvey Fresh and Lion.
The purported move comes as Asian companies are showing increased interest in Australian agricultural assets, keen to meet local consumers' demands for better quality products.
This has already formed the basis for several private equity and strategic transactions in the region. For example, following its acquisition of Tegal Foods and Primo Smallgoods in Australia, Affinity Equity Partners is developing distribution channels in other parts of Asia. Hong Kong-listed Chevalier Holdings assumed control of vegetable wholesaler Moraitis Group from Catalyst Investment Managers with a similar strategy in mind.
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