Corporate activity in food & beverage sector remains high

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Within the food and beverage sector, deal making momentum from the second quarter of the year was carried forward into the third quarter. A total of eight acquisitions were announced in the third quarter, with the pipeline for the remainder of the year looking strong.

Acquisitions announced

Brisbane based Blue Sky private equity acquired a majority stake in Adelaide based Sunfresh Salads. Sunfresh Salads is a major supplier of ready to eat meals, fresh salads and frozen products to retail and foodservice in South Australia and Victoria.

Unilever Australia announced the acquisition of Toowoomba based Weis ice cream. The Weis ice cream range will complement Unilever’s existing brand portfolio which includes Ben & Jerry’s, Grom, Talenti and Streets.

Light Warrior, the investment fund set up by former Swisse Wellness CEO, Radek Sali, has made an equity investment in Hydralyte as part of a capital raise. The proceeds from capital raise will be applied to fund Hydralyte’s US expansion.

Bindaree Beef sold 51 per cent of the company to the Hui family and Archstone Investment Co in return for a significant investment in Bindaree Beef. The Hong Kong based Hui family acquired the shareholding in Bindaree Beef after Shangdong Delisi walked away from a deal to acquire 45 per cent of Bindaree Beef in 2016.

The Kin Group, back by Raphael Geminder, acquired the Cobs Popcorn business from founders John and Ravit Walys. Recent investments made by the Kin Group includes Green’s Foods and The Cake Syndicate.

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Listings on the ASX

There have been no listings of food and beverage businesses on the ASX in the months of July and August 2017.

The number of new listings, especially smaller IPOs of food and beverage business, have reduced significantly in 2017 mainly due to a lack of institutional funds interested in smaller IPOs.

Deal activity notably remained high in the third quarter of 2017 and we expect this high level of activity to continue for the remainder of 2017.

Ben van der Westhuizen and David Baveystock are directors of Comet Line Consulting, an advisory business that specialises in acquisitions and divestments within the Australian food and beverage industry.