‘Nestle of Australia’: SPC goes for gold with three-way merger
By Jessica Yun
Canned fruit and vegetable producer SPC is a step closer to building a global empire following a three-way merger with ASX-listed Original Juice Company (OJC) and powdered milk business Nature One Dairy that is set to create a $400 million company.
The merged entity will build on the unique strengths of each business. SPC will provide OJC with extra manufacturing capacity to meet higher demand, and a broader distribution network to expand into new channels, while Nature One Dairy will deliver an export pathway to Asian customers.
SPC is a step closer to global expansion after joining forces with ASX-listed Original Juice Company and powdered milk business Nature One Dairy.Credit: Monique Westermann
Of the three businesses, SPC is by far the largest, booking $271 million in revenue for the 2024 financial year. OJC notched $49 million and Nature One Dairy posted $46 million.
SPC chairman Hussein Rifai and managing director Robert Iervasi will become the new entity’s chairman and global managing director respectively, meaning OJC chairman and former Victorian premier Jeff Kennett will retire.
“We want to become the Nestle of Australia. We want to become a global player in the food industry out of Australia,” Rifai said.
“This is certainly a first significant step from our vision of becoming global … The vision is to strengthen up your home markets and pick the right products to go overseas with.
“The next step is to then be looking to our target markets, which is Asia Pacific, and then on to the Middle East, and other parts of the world, Europe and potentially somewhere else.”
Original Juice chairman Jeff Kennett (left) and SPC chairman Hussein Rafi in Melbourne on Wednesday. Credit: Eamon Gallagher
OJC is moving more towards “functional” products with health and wellbeing benefits such as juice shots for immunity, and SPC is increasing its convenience offerings like single-serve and easy-to-heat products. Meanwhile, Nature One Dairy’s milk powders for people aged over 40 and 60, as well as infants, are also aimed at boosting health, Iervasi said.
SPC’s Shepparton facility will provide extra manufacturing power for OJC to meet rising demand, and will help it expand from its current supermarket-only channels into petrol stations, convenience stores, food service, and more.
Roughly 95 per cent of Nature One Dairy’s products are sold predominantly in pharmacies in Asian markets across 13 countries. The other two businesses hope to leverage this expertise.
“The three businesses blend in beautifully and the synergies and what they provide is sensational, really, and it gives a defensible portfolio to what is a really challenging market out there in food and beverage,” OJC chief executive Steven Cail said.
SPC, which recently took part in a campaign along with Sanitarium, Norco and Mayvers to push for country-of-ownership labelling on Australian food products, had to pull back its production of canned fruit by 40 per cent earlier this year due to lower demand for Australian-grown pears and peaches as consumers increasingly opt for cheaper foreign-made items amid cost-of-living pressures.
The merger is expected to generate $400 million in revenue and more than $29 million in earnings.
“This is about becoming a big, defensible company that can buy from Australian growers and supply Australian food into Australia, but also look at a bigger portfolio beyond,” Cail said.
SPC shareholders are expected to own 69.2 per cent of the merged entity, OJC shareholders will hold 15.5 per cent and Nature One Dairy shareholders will own 15.3 per cent. OJC will issue 133 million shares to SPC shareholders and issue 29 million shares and pay $6 million cash to Nature One Dairy shareholders to acquire it.
The combined company is also conducting a limited capital raising of $1 million to give potential investors the opportunity to capitalise on the transaction, said OJC’s Cail.
The transaction will require the approval of OJC’s shareholders, who will vote on the merger at an extraordinary general meeting in November. If passed, the new entity will relist on the stock exchange under the ticker “SPG”, which stands for SPC Global.
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