CANADA: Saputo buys domestic liquid milk business
Saputo strengthens presence in Atlantic Canada
Saputo has moved to expand its presence in Atlantic Canada through the acquisition of the liquid milk operations of Nova Scotia-based Scotsburn Co-Operative Services.
The Canadian dairy giant agreed to pay C$61m (US$55.7m), excluding about $8m in working capital items, for Scotsburn's liquid milk unit. The business generates annual sales of around C$160m and EBITDA of around C$8m, Saputo said.
Saputo will take control of the selling and distribution of milk, cream, sour cream ice cream mix and cottage cheese, mainly sold under the Scotsburn brand. The deal includes two milk processing facilities.
The Scotsburn co-operative will continue its other activities, which include ice cream and frozen dessert production.
The deal is subject to closing conditions, including approval from Scotsburn's members and competition regulators. Saputo expects to close the transaction in March.
Saputo has expanded aggressively through M&A in recent years. The Canadian dairy group significantly beefed up its presence in the US when it snapped up the Morningstar business from Dean Foods in December 2012.
It is also engaged in a protracted takeover battle for Australian dairy Warrnambool Cheese and Butter Factory.
Saputo to Increase its Presence in Atlantic Canada by Acquiring the Fluid Milk Activities of Scotsburn Co-Operative Services Limited
MONTREAL, QUEBEC--(Marketwired - Jan. 17, 2014) - Saputo Inc. ("Saputo") (TSX:SAP) announces today it has entered into an agreement to acquire the fluid milk activities of Scotsburn Co-Operative Services Limited based in Atlantic Canada ("Scotsburn Fluid Milk Business"). Scotsburn is a Nova Scotia cooperative that will continue its other activities such as its frozen ice cream and frozen novelties business.
The purchase price of $61 million, on a debt-free basis excludes about 8M$ of working capital items and is payable in cash by drawing on available credit lines. The transaction is subject to the approval of Scotsburn co-op members and usual conditions (including approval by the Canadian Competition Bureau) and is expected to close around March 2014.
The Scotsburn Fluid Milk Business operates two fluid milk processing facilities located in Sydney, Nova Scotia, and Mount Pearl, Newfoundland and employs an aggregate of approximately 400 people in Atlantic Canada. Its operations consist of manufacturing, selling, marketing, distributing and merchandising of products such as fluid milk, cream, sour cream, ice cream mix and cottage cheese, mainly under the Scotsburn brand. The Scotsburn Fluid Milk Business generates annual sales of approximately $160M and about $8M of earnings before interest, taxes, depreciation and amortization (EBITDA).
This transaction will enable Saputo's Dairy Division (Canada) to increase its presence in Atlantic Canada.
Original source: Saputo
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