Maggie Beer sheds controlling stake in food business Maggie Beer Products in $10m deal
TV personality Maggie Beer has sliced off the remaining stake in her food business to Longtable in a $10m deal.
Popular cook and TV personality Maggie Beer has struck a $10 million windfall from the sale of her remaining 52 per cent stake in her Maggie Beer Products food business, after agreeing to sell out of her family-owned company this morning.
It adds to the $15m Ms Beer raised from selling an initial stake in Maggie Beer Products three years ago.
At just before noon the details of the deal were released, with Ms Beer inking a deal to sell the controlling stake in Maggie Beer Products for $10m in a mix of cash and shares to publicly-listed food company Longtable (LON).
A deal document obtained by The Australian shows Longtable will buy the remaining 52 per cent stake in Maggie Beer Products it doesn’t already own for $10m, made up of $8.5m in cash, $1m in Longtable shares and a $500,000 convertible note.
It means Ms Beer will sever the link to her business that she founded more than 40 years ago and which carries her name across a range of 73 food products sold through all major Australian retailers and leading supermarket chains.
The publicly listed company Longtable, which owns a portfolio of premium food brands including 48 per cent of Maggie Beer Products, Paris Creek Farms and Saint David Dairy, revealed this morning that Maggie Beer Products had returned to profitability after a run of losses and that it had agreed to buy out the remaining 52 per cent stake from Ms Beer and her husband.
“The Maggie Beer team has successfully managed costs to create a profitable, sustainable business with a very powerful brand that is highly regarded by consumers looking for premium food products,’’ Longtable chief executive Laura McBain told the ASX this morning as the company released its December-half results that included a loss of $4.73m.
“We are currently finalising negotiations to acquire the remaining 52 per cent of the equity in this business that Longtable does not already own, and bring the brand firmly into our portfolio,’’ Ms McBain said.
The Maggie Beer Products business famous for its range of verjuice, vinegars, ice creams and quince pastes is based in the Barossa Valley and was formed almost 25 years ago by Ms Beer and her husband to use her well-known name to sell a range of premium, up-market packaged foods in the supermarkets and other chains.
Longtable, whose major shareholders include former Victorian Premier Jeff Kennett, bought its 48 per cent stake in Maggie Beer Products in 2016 for $15m with $10m going towards growth opportunities for the business, which includes a push into Asia, and $5m to Maggie Beer and her family as they sold down some of their stake.
However, tough competition in the supermarkets and challenges from other brands and private label goods have eaten away at Maggie Beer Products profitability recently with Ms Beer’s foodie business racking up a loss of $1.2m in fiscal 2018 and a loss of $500,000 in 2017. Full-year sales were higher, up to $18.99m in 2018 from $17.92m in 2017 with the revenue the best Maggie Beer Products has recorded since 2016.
This morning Longtable said Maggie Beer Products had returned to profitability with pre-tax earnings of $1.5m in the first half of fiscal 2019 and revenue for the period up 4 per cent to $11.5m.
The company said that sales to major retailers was a significant contribution to the sales growth with strong sales from new categories Maggie Beer had pushed into such as cheeses and stocks.
