This is reflective of an approximate 7.5 x EBITDA multiple based on the last 12 months’ earnings.
Synlait said the acquisition of Dairyworks is part of the delivery of Synlait’s Everyday Dairy strategy and complements its recent acquisition of cheese manufacturer Talbot Forest.
Synlait CEO Leon Clement said, “This is an exciting opportunity for Synlait. This business is a great strategic fit for us and an important step in growing our presence in the Everyday Dairy category.
“Dairyworks is a nimble and innovative company. It will fit well with Synlait and provides us with an opportunity to keep optimising our value chain while giving access into Australia where Dairyworks presence is growing.
“Opportunities exist in both businesses to streamline supply chains and enhance our competitiveness. It gives us the ability to optimise how we process milk solids and get the most value from our supply of milk. We’re excited by this opportunity as we work to capture more value in the dairy market in New Zealand and globally.”
Dairyworks will operate as a standalone business under the Synlait umbrella, with its CEO, Tim Carter, reporting to Clement.
Dairyworks was established in 2001 in South Canterbury and is one of the larger companies operating in New Zealand’s Everyday Dairy category.
From small beginnings in Temuka, it moved to its current operation in Christchurch, where it supplies New Zealand with almost half of its cheese, a quarter of the country’s butter, as well as milk powder and the award-winning Deep South ice-cream.
It owns the cheese and butter consumer brands Dairyworks, Rolling Meadow and Alpine, which are supplied to supermarkets in New Zealand and Australia.