Synlait shares take a hammering
Troubled milk processor Synlait's share price is taking a hammering as nervous investors offload their stakes.
The listed company is paying $112 million for Christchurch-based Dairyworks, a major domestic dairy products trader.
Synlait’s purchase is subject to OIO approval.
It says the acquisition of Dairyworks will provide Synlait with another meaningful move towards the delivery of its ‘Everyday Dairy’ strategy and complements the company’s recent acquisition of cheese manufacturer Talbot Forest.
Synlait chief executive Leon Clement says this is an exciting opportunity for Synlait.
“This business is a great strategic fit for us and an important step in growing our presence in the Everyday Dairy category.”
“Dairyworks is a nimble and innovative company. It will fit well with Synlait and provides us with an opportunity to keep optimising our value chain while giving access into Australia where Dairyworks presence is growing.
“Opportunities exist in both businesses to streamline supply chains and enhance our competitiveness. It gives us the ability to optimise how we process milk solids and get the most value from our supply of milk. We’re excited by this opportunity as we work to capture more value in the dairy market in New Zealand and globally.”
A family-owned business Dairyworks started in 2001.
It’s Alpine and Rolling Meadow cheese brands plus private labels hold the number one spot: 47% of the local cheese market.
It also owns the Deep South ice cream brand and makes milk powders.
Dairyworks will operate as a stand-alone business under the Synlait umbrella, with its chief executive Tim Carter, reporting to Clement.
