Experts left perplexed as EBOS denies running eye over Real Pet Food Company

EBOS said it was ‘inaccurate’ to say it had taken a look at a possible acquisition of the Real Pet Food Company.

EBOS left some in the market scratching their heads in March with its denials that last year it had been assessing the merits of an acquisition of the Real Pet Food Company.

It’s known that with the announced departure of John Cullity, the group had paused any plan to buy the business because new chief executive Adam Hall would not start until July 1, and it would be his call on whether it was interested in Real Pet Food.

Market sources said the Australia-listed group had been considering whether to buy the business last year before Cullity’s announced departure, and had held talks about the opportunity.

Which was one reason why some experts were so perplexed by EBOS’s comments that it was “inaccurate” to suggest it had earlier been looking.

Especially when the CEO of the almost $7bn company had been awarded an extra payment if he carried out mergers and acquisitions.

Outgoing EBOS CEO John Cullity.

Sources say EBOS is known to look at almost all opportunities that present themselves in the market relating to its area of healthcare, pharmacy and pet care to test whether they would be a suitable purchase option.

In fact, it came close to buying pet care business Greencross from TPG Capital in 2023 for $4bn, but pulled out of the plans in the final hour when an equity raising to fund the transaction looked like it was going to be challenging.

Cullity received total pay in the 2024 financial year of $6.6m, including a $1.6m base salary, and last year’s annual report said the payment did not include a “special acquisition payment” as disclosed in the 2023 annual report.

The payment refers to $2m awarded to Cullity for buying LifeHealthcare in 2021 for $1.17bn from Pacific Equity Partners.

Since July 2023, EBOS has completed six acquisitions and four small bolt-on acquisitions so it’s known to be highly acquisitive.

An EBOS spokesman said Cullity received a one-off incentive in relation to the LifeHealthcare acquisition.

“This was considered appropriate given the transformative nature of the acquisition.” He said Cullity had not received incentives for other acquisitions, and the annual short-term incentive structure for Cullity and other executives was based on the overall financial performance of EBOS.

Hall will receive $1.35m in base pay, up to $1.8m in short-term and $2.3m in long-term incentives, along with a $2.4m sign-on.