Wattle Health Australia in joint venture deal with SPC to boost sales of organic infant milk formula in Middle East
Wattle Health Australia has finalised a deal which will see SPC take a stake in the infant formula maker in return for development funds and help with sales.
ORGANIC infant milk formula manufacturer Wattle Health Australia has added the Middle East to its export markets after finalising a joint venture with Shepparton Partners Collective.
Shepparton Partners Collective, which bought the iconic fruit canning business SPC Ardmona from Coca-Cola Amatil for $40 million last year, is believed to have strong ties with Middle Eastern food markets.
SPC is a partnership of Sydney-based investment companies Perma Funds Management and The Eights.
It is chaired by Jordanian Hussein Rifai, who is also Perma Funds Management’s managing director.
“This is all about looking at opportunities to branch out and diversify,” a source with knowledge of the deal said.
SPC will arrange up to $20 million in debt funding for Wattle Health Australia to complete the construction of the Corio Bay Dairy Group’s spray dryer plant in Geelong.
In return, Wattle Health will issue SPC with 30 million shares once the loan is drawn down. SPC and Wattle Health will enter into a 50-50 marketing, sales and distribution joint venture.
In a statement to the Australian Securities Exchange, WHA said the objective of the joint venture would be to provide a platform for increasing the distribution and sales of Wattle Health’s current brands into new markets and for the development of new products and new brands.
SPC will receive a further 40 million WHA shares upon reaching sales milestones. That would potentially give SPC a 26 per cent stake in WHA. Chemist Warehouse is already earmarked for 20 million WHA shares under a marketing deal signed last December.
SPC’s stake could also act as a block against any overseas company wanting to buy out WHA in the future.
WHA also has a 50-50 joint venture with Nouriz (Shanghai) Fine Food Co Ltd, which is backed by Chinese state-owned enterprise, China Animal Husbandry Group.
“SPC is delighted to partner with Wattle Health to develop and grow the global market for Australian organic infant formula products,” Mr Rifai said.
WHA shares could begin trading on the ASX this week, after seven months in abeyance.
● Peter Hemphill’s family holds shares in Wattle Health Australia.
MORE ON WATTLE HEALTH AUSTRALIA
US regulators back dairy in the diet
While it may be fashionable with some to dismiss dairy, some of America’s best nutritionists have confirmed it’s beneficial to have some milk, yoghurt and cheese in our diets.
Call to examine farmgate freeze
Dairy Connect chief executive Shaughn Morgan has called for the Australian Competition and Consumer Commission to examine this season’s static farmgate figures.