Harris Farm and Superior Food Services in spotlight with Coles open for acquisitions

Coles told investors after delivering its results on Wednesday that any acquisition would need to meet its criteria when it comes to returns.

NSW-based grocer Harris Farm and the food distribution business Superior Food Services are back in the spotlight with the $24bn supermarket giant Coles Group flagging that acquisitions remain on the agenda.

Coles told investors after delivering its results on Wednesday that any acquisition would need to meet its criteria when it comes to returns, but the obvious target for the grocer that has seen profits surge amid the global pandemic is Harris Farm and Superior Food Services.

The family-owned Harris Farm is a business that has never thought to be available for sale despite the fact that plenty of investment bankers and private equity firms are thought to have knocked on its doors over the years. But some believe that may not remain the case, with the company presenting at more than one investment banking conference in the past year.

Coles is always said to have aspirations to increase its exposure in the organic food space.

An acquisition of food services distribution business Superior Food Services, up for sale by private equity firm Quadrant, is seen as logical for Coles after rival Woolworths recently agreed to buy a 65 per cent interest the industry’s second largest player PFD Food Services for $552m.

Superior Food Services delivers food to the hospitality, aged care and health sectors.

Coles saw its net profit increase 14.5 per cent for the half year to $560m, with 61 per cent of online sales growth amid the global pandemic, which has fuelled a share price rally.