nada-based dairy company, has entered into a $370m deal to acquire Australia's oldest dairy processor Warrnambool Cheese and Butter, as part of its efforts to expand its presence in the Asia Pacific region.The offer has been unanimously recommended by the Warrnambool board, while directors recommend that the company's shareholders accept the offer in case no superior proposal is made.
Warrnambool operates two manufacturing facilities in South West Victoria and South Australia with more than 420 staff.
The company produces a wide of dairy products for domestic and export markets, including cheese, butter and butter blends, milk, cream and dairy ingredients.
Warrnambool reported consolidated revenues of C$477m with EBITDA of C$25m for the year ended 30 June.
Under the terms, Saputo made an off-market offer of A$7, beating a A$5.75 per share offer from Warrnambool's majority owner Bega Cheese in September. It plans to pay for the transaction through a new bank loan with a three-year term.
National Bank of Canada and Bank of Montreal are co-leading for the new bank loan.
Rabobank and Rothschild are acting as the financial advisers to Saputo, while Maddocks and Stikeman Elliott are providing legal counsel.
Warrnambool CEO David Lord was quoted by Reuters as saying in a media briefing, "The board came to the view after careful consideration that the Saputo offer is far superior to the Bega bid in terms of both value and conditionality."
"It provides greater certainty and substantial premium to WCB shareholders," Lord added.
Saputo CEO Lino Saputo said, "We believe Australia has the ideal platform for us getting products into those emerging markets."
The offer, which is subject to certain conditions and approvals, is expected to be completed by early December 2013.
