SunPork and BE Campbell could meet in supermarket middle

Food operator BE Campbell supplies Woolworths, whereas SunPork is a supplier to rival supermarket giant Coles.

BE Campbell’s most logical owner could be staring it in the face, with industry experts saying a tie up with SunPork could lead to bigger things to come.

A meat supplier to super­markets, butchers and the food services industry, BE Campbell is currently up for sale through Miles Advisory. It comes only a few years after it tried to buy rival SunPork, which operates in similar markets.

Now people think it could be SunPork that is BE Campbell’s most logical buyer.

The businesses are complementary as BE Campbell supplies Woolworths, whereas SunPork is a supplier to rival supermarket giant Coles.

BE Campbell in the past has generated about $50m in annual earnings before interest, tax, depreciation and amortisation.

Market estimates are a sale could get a price of about $300m.

It is one of Australia’s largest food operators, supplying pork, beef and lamb to supermarkets, food service providers, retail butchers and export markets.

SunPork is owned by the Cameron, Hall and McLean families and is Australia’s largest pork producer, with 9.9 per cent of the market, according to IBISWorld.

It hit the market in 2021 with price expectations said to be around $800m and it generates about $100m in annual earnings.

At a later stage in the sale process, the Cameron family opted to sell the operating company but retain the real estate. The business, on the market through Macquarie Capital, was kept when offers did not meet expectations.

Should the pair combine, the businesses may appeal to a major pension fund investor or could be prepared to be taken to the ASX for a market listing.

A drawcard for a big pension fund, private equity firm or infrastructure investor like Macquarie Asset Management is that SunPork has land holdings, which makes it more attractive.

Macquarie’s recent purchase of Linen Services Australia from Adamantem Capital and Downer for about $200m was a price many thought was higher than was expected.

In that case it was the fact the business had land attached to the sites that could have an alternative uses that the made the investment appealing to Macquarie.

Elsewhere, Kohlberg Kravis Roberts is understood to have outbid Roc Partners for ProTen, offering over $1bn for the business and entering into exclusive talks, because of its hard assets worth over $1bn, strategically located near key processing facilities.

The Aware Super-owned company is one of the country’s two largest poultry producers alongside Inghams, generating about $1.8bn of annual revenue.

Roc Partners had been the manager of the business on Aware Super’s behalf but when it was put up for sale, it is understood to have stood down from this position.

ProTen describes itself as the leading broiler chicken farm developer and operator in Australia, owning and operating 561 poultry sheds across 47 farms in NSW, Victoria, South Australia, Western Australia and Queensland.

Annual earnings before interest, tax, depreciation and amortisation are said to be about $60m.

Market analysts believe BE Campbell could have an attraction for other poultry providers, as pork provides a natural defensive aspect in a portfolio of protein offerings to chicken.