Goodman Fielder confirms $A170m Integro sale
Unprofitable food company Goodman Fielder says it will sell Integro for $A170 million in October.
The sale was flagged earlier this month during its annual result.
A consortium comprised of GrainCorp and Gardner Smith is buying the commercial oils business, which will leave Goodman with $A25 million profit after tax, to be primarily used to reduce debt.
Goodman says the sale – which is subject to New Zealand employee consultation requirements – does not include the "out of home" business in Australia or its Asia Pacific fats and oils business.
After the sale, Goodman will enter a long-term partnership with Graincorp for the supply of oil and finished goods.
"This divestment enables us to concentrate our investment and internal resources on our core categories and brands," Goodman ceo Chris Delaney said in a statement to the NZX today.
The food ingredients maker put Integro and its New Zealand milling units on the block after successive writedowns in the value of its business, in a bid to cut debt and bolster its balance sheet.
The competitive retail environment and rising cost of raw materials has put its operation under strain and led to a rationalising of its businesses.
Goodman's Integro commercial oils business recorded a 1.9 percent gain in sales to $A339.9 million while normalised ebitda fell 24 percent to $A30.6 million in the year ended June 30. The margin in that business fell to 9 percent from 12.1 percent.
Goodman shares (NZX: GFF) last traded at 68 cents, above the year's starting point of 60 cents, but below the March peak of 94 cents.
The stock is rated an average 'hold' based on 12 analyst recommendations compiled by Reuters.
The Integro deal is part of a bigger acquisition by GrainCorp, which includes the Gardner Smith Group, Australia's second-biggest oilseed crusher.
GrainCorp's shares rose 0.2 percent to $A9.85 on the ASX yesterday.