Warrnambool Cheese and Butter to buy Lion’s ‘everyday cheese business’

WARRNAMBOOL Cheese and Butter is set to pay $137.5 million for part of a competitors’ business.

Coon Tasty Cheese

WARRNAMBOOL Cheese and Butter is set to pay $137.5 million for part of a competitors’ business which includes well-known brands such as Cracker Barrel and COON.

The Allansford-based business has entered into an agreement to acquire Lion’s “everyday cheese business”. Lion owns 10.22 per cent of WCB shares.

The EDC business operations include cutting and wrapping, distribution, sales and marketing and intellectual property associated with the COON, Cracker Barrel, Mil Lel and Fred Walker brands.

READ MORE: Lion holds WCB shares, for now

The EDC business generates annual sales of about $160 million and employs about 170 people.

The cut and wrap operations of the EDC business are located in a building owned by WCB which is adjacent to WCB’s cheese manufacturing facility at Allansford.

A WCB statement to the Australian Securities Exchange said: “The transaction will enable WCB to increase its presence in consumer branded everyday cheese products segment in Australia, with strong market positions in this segment.”

The EDC business will be purchased on a debt free basis and the price includes $106.5 million which represents the value of the inventory net of a minimal amount of assumed liabilities.

The price is subject to the final determination of the inventory amount and assumed liabilities amount at closing, according to the statement.

The purchase is subject to WCB shareholder approval.

Canadian giant Saputo Inc holds 87.92 per cent of the WCB shares and is supportive of the transaction.

A shareholder meeting will be held in late April or early May to consider the transaction, according to the WCB statement.