Warrnambool Cheese and Butter (WCB) has entered into an agreement to acquire the Everyday Cheese Business (EDC Business) of Lion-Dairy & Drinks (Lion) based in Victoria, Australia.
EDC Business was bought for $137.5 million, and includes $106.5 million of inventory. The is expected to close towards the beginning of May 2015.
The transaction is subject to WCB shareholder approval, but Saputo, which holds 87.92 percent of WBC’s shares has already indicated its support of the transaction and said it will vote in favour of the transaction.
Lion holds 10.22 percent of the shares in WCB. The Directors of WCB intend to recommend that shareholders vote in favour of the transaction.
WCB plans to hold a shareholder meeting to be held in late April or early May to consider the transaction.
The EDC Business' operations include cutting and wrapping, distribution, sales & marketing and intellectual property associated with the COON, Cracker Barrel, Mil Lel and Fred Walker brands. The business generates annual sales of approximately $160 million and employs approximately 170 people. The cut and wrap operations of the EDC Business are located in a building owned by WCB which is adjacent to WCB's cheese manufacturing facility at Allansford.
The transaction will enable WCB to increase its presence in consumer branded everyday cheese products segment in Australia.