McCain Foods, the french fries maker headquartered in Canada, has put its Sara Lee frozen baked goods and desserts business in Australia on the market.
The Australian unit of French investment bank Rothschild & Co. has been hired to auction off Sara Lee, a spokesperson for McCain confirmed to just-food today (14 October). The company is targeting local private-equity firms and food manufacturers as potential buyers, The Australian Financial Review (AFR) reported, citing a document sent to prospective parties.
Sara Lee’s performance during the coronavirus pandemic has reportedly been flagged as a key selling point in terms of sales and profits in its latest financial year, with Rothschild pointing out the business owns the “largest bakery and dessert facility in Australia” outside Sydney, AFR cited the document as saying.
McCain acquired the Sara Lee bakery business in Australia and New Zealand at the back end of 2012 for AUD82m (US$85m at the time) when it was split in two – meat and bakery and desserts.
Tyson Foods then went on to own the Sara Lee assets in the US after it acquired meat group Hillshire Brands in 2014. But Tyson sold those assets to private investor Kohlberg & Company in 2018.
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The spokesperson said McCain had invested “strongly” in innovation at Sara Lee and its manufacturing plant in Lisarow, New South Wales, including AUD40m to improve the site’s capabilities with a new pastry production line.
“McCain has been approached regarding the opportunity to acquire the Sara Lee business,” a statement read. “While at this point no decision has been made, it is sensible for McCain to explore alternative options for the unique Sara Lee portfolio, as driving synergies and new value with our core potato business in retail and foodservice continues to be a challenge and a necessary focus.
“McCain is working with Rothchild & Co to review the market opportunity to determine the best and most sustainable outcome for McCain and Sara Lee.”
Sara Lee’s Sydney plant is only operating at around 50% of its capacity, leaving room for expansion under a new owner, the AFR said, adding that the bankers have called for indicative bids by the end of October.
McCain said Sara Lee has control of more than 50% of the Australian and New Zealand retail frozen desserts market.