Keytone Dairy to acquire Omniblend
Keytone Dairy, the Christchurch, New Zealand based dairy product manufacturer, has announced it is to acquire Australia’s Omniblend, a manufacturer of health and wellness powdered and UHT drinks.
The acquisition was described in Keytone’s 17 June press release as highly complementary to its existing business, offering a substantial increase in revenues and earnings base. Omniblend’s access to the Chinese market was also prized, with the company holding an accreditation from the Certification and Accreditation Administration of the People's Republic of China.
Keytone’s Chairman, Peter James, said: “The acquisition offers scale and diversification to Keytone’s existing business, with a depth of product offering and manufacturing expertise and capability. The Omniblend customer base includes a range of highly credible Australian and foreign contract manufacturing clients and the combined company will be substantially diversified, both in terms of its product mix, and in terms of its geographic markets and customer base.
“Further, the Acquisition provides Keytone with an early mover advantage in the health and wellness sector into China. We believe that the combination of Keytone’s existing Asia and China sales channels, export-oriented brand and capital reserves, with Omniblend’s scale, breadth of product range, highly automated manufacturing facilities will produce substantial cross-sell synergies.”
Keytone will acquire 100% of Omniblend, meeting its price of AU$8mn (US$5.5mn) in cash and settling existing debt of up to $4.6mn, as well as offering $10mn in Keytone shares to Omniblend vendors.
James Gong, CEO of Keytone, said: “I am thrilled with the Acquisition of Omniblend and the opportunities it brings to Keytone. It offers a significant and complementary infrastructure platform for growth whilst enhancing the ability of the collective business to maximise the offering to our customers, being proprietary brand customers as well as our private label clients.
“Keytone will not only be able to leverage its clean, green, pristine, New Zealand provenance and credentials, but also the highly complementary and robust Australian food safety standard conditions. These credentials are invaluable as we continue to penetrate our core markets, in particular China.”
The acquisition is subject to the usual conditions, and is expected to be completed in late July of 2019, after gaining approval at a shareholders’ meeting.
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