McCain Foods, the french fries maker headquartered in Canada, has sold its Sara Lee frozen baked goods and desserts business in Australia to New Zealand investment firm South Island Office.

The investor recently bought New Zealand’s Original Foods Baking Co. It said the addition of Sara Lee, for an undisclosed sum, “will create and grow the region’s leading frozen bakery goods company as it brings together two great baking companies that specialise in using locally-sourced ingredients to bring delicious treats to families in Australia, New Zealand and internationally”.

It suggested the combined product ranges and distribution channels are “highly complementary”.

In October, McCain said it had hired bankers for a potential sale of the Sara Lee business.

As part of its previous strategy to grow Sara Lee, McCain appointed Mark Mackaness as general manager in 2019 to build a “stand-alone business capability”, operating independently from McCain.

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Under the newly-announced acquisition, Mackaness has invested in the business and will be an equity partner and the group CEO. The rest of Sara Lee’s leadership team will also be staying with the business.

Mackaness said: “Original Foods Baking Co. is already branching out to Australia and beyond with its range of brownies, slices, bites and more. At Sara Lee, we have built an iconic Australian bakery brand, and our quality ice cream, cheesecakes, apple pies, danishes and puddings have been a household favourite in Australia and New Zealand for 50 years.

“This partnership allows both businesses to gain exposure to new channels and markets as we have different strengths in retail and foodservice in Australia and New Zealand.”

Mackaness said the businesses will continue to be run independently but will be “looking for opportunities to partner for on-going growth”.

Under the terms of the sale, all current Sara Lee employees, based at its facility in the town of Lisarow near Sydney, will remain with the business.

McCain acquired the Sara Lee bakery business in Australia and New Zealand in 2012 for AUD82m (US$85m at the time).

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.