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Metcash in $300m raise, will pay 6.9-times earnings for Superior Food

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Metcash, the parent of supermarket brands IGA and Foodland, is expected to seek to raise about $300 million on Monday to fund the purchase of Quadrant Private Equity’s Superior Food Group, as well as two bolt-on acquisitions in the hardware sector.

The Doug Jones-led wholesaler and grocery chain operator will pay a multiple of 9-times 2024 financial year earnings before interest, tax, depreciation and amortisation for Superior Food, or 6.9-times if synergies are included. That equates to a purchase price of between $390 million and $412 million on an enterprise value basis, sources said. Metcash is also acquiring South Australian hardware supplies business, Bianco, for $82 million, and Alpine Hardware for $64 million, they added.

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Sarah Thompson has co-edited Street Talk since 2009, specialising in private equity, investment banking, M&A and equity capital markets stories. Prior to that, she spent 10 years in London as a markets and M&A reporter at Bloomberg and Dow Jones. Email Sarah at sarah.thompson@afr.com
Kanika Sood is a journalist based in Sydney who writes for the Street Talk column. Email Kanika at kanika.sood@afr.com.au
Emma Rapaport is a co-editor of the Street Talk column. Prior to that, she was a markets reporter at The Australian Financial Review. Connect with Emma on Twitter. Email Emma at emma.rapaport@afr.com

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Original URL: https://www.afr.com/street-talk/metcash-in-300-million-cash-call-to-fund-superior-food-bolt-ons-20240129-p5f0rb