Coca-Cola Amatil has announced that the SPC fruit and vegetable processing business (SPC) would be sold to Shepparton Partners Collective and its group of companies (Shepparton Partners Collective) for consideration of $40 million payable at completion.
Taking into account forecasted working capital balances, working capital adjustments to the sale price and costs of disposal, a profit on sale of $10-15 million is expected to be recorded upon completion. Both parties are targeting a completion date before the end of June.
The sale agreement also includes a four-year deferred payment which, subject to business performance, could result in up to an additional $15 million of sale proceeds at that time. Due to the realisation of recognised deferred tax assets, Amatil’s ability to frank dividends will be impacted in the short to medium term. The sale concludes a review and divestment process commenced in August 2018, with the new owners committing to grow the Goulburn Valley-based business and offering employment to all permanent staff.
Group managing director of Coca-Cola Amatil, Alison Watkins, said Shepparton Partners Collective had the right combination of commercial experience, funding support and confidence in the future of SPC.
“This outcome is good news for SPC and good news for the Goulburn Valley,” Watkins said. Watkins said there was strong domestic and international interest during the divestment process, reflecting SPC’s iconic status and the transformation of its manufacturing capacity following a $100 million co-investment between Amatil and the Victorian Government.
“Shepparton Partners Collective recognises the value of SPC’s brands, the opportunities for innovation and category growth in Australia, and its export potential,” Watkins said. “Importantly, they’re also committed to offering ongoing employment to all permanent members of the SPC team.
“This ensures continued access to the world-class capability and experience in fruit and vegetable processing which is brought to the company by SPC managing director Reg Weine and his team.
“On behalf of Amatil, I thank everyone at SPC for their commitment to the business. The combination of Shepparton Partners Collective, Reg and the team ensures SPC is in safe hands.”
Weine welcomed the outcome as an opportunity for SPC to continue its transformation and pursue new opportunities in domestic and international markets.
“In recent years we’ve grown our market share in tomatoes and we recently launched Australia’s first organic canned tomato. Our award-winning functional food range – ProVital continues to grow and gain support with dieticians and our enhanced processing and automation capability has opened up new export markets,” Mr Weine said. “We’re proud of those achievements and we’re confident we can do more.”