SPC and Wattle Health Australia in joint venture organic infant formula marketing and funding deal

Wattle Health Australia has enlisted Shepparton fruit canner SPC to market its organic dairy products and seek $20 million to complete its Geelong spray dryer plant.

Joining forces: Wattle Health Australia has sought help from investors and fruit canner SPC to help it complete the Corio Bay Dairy Group spray dryer in North Geelong.

WATTLE Health Australia has enlisted the help of Shepparton fruit canner SPC to market its organic infant formula and source $20 million to complete construction of a spray dryer in Geelong.

WHA announced yesterday a conditional deal for a joint venture with SPC to use the fruit canner’s extensive sales and marketing team to sell its Uganic infant formula range as well as future products in the domestic and international markets.

In return, SPC or its nominee will receive 40 million fully paid ordinary shares in WHA, subject to it meeting specific revenue targets for the sale of Wattle Health products.

“SPC, as part of its contribution to the joint venture, will assist WHA to procure a line of credit of up to $20 million on commercial terms to enable completion of the construction of the spray dryer at Corio Bay Dairy Group,” the dairy company said.

“This funding will allow WHA to execute its business plans with confidence in taking advantage of the growth of the organic segment of the dairy market.”

The unlikely alliance will also see SPC receive a further 30 million shares in WHA if the Shepparton company secures the $20 million needed to complete the Geelong spray dryer plant.

SPC has been given an unspecified exclusivity period to carry out due diligence on the deal and negotiate the terms and conditions of the joint venture.

WHA chief executive officer Tony McKenna said the two companies shared a “commitment and purpose to develop value added agricultural capability and work with our respective primary industry partners to build viable and long-term and sustainable businesses based on high quality Australian farm products”.

WHA also announced it had allocated 32.45 million shares with sophisticated and institutional investors at 15 cents a share, raising $4.86 million to help fund the spray dryer.

It comes as the company returned funds to its shareholders from a capital raising in February at 40 cents a share to enable the purchase of a 75 per cent stake in the Blend and Pack packing plant in Melbourne’s southeast from its Hong Kong owners, Mason Group Holdings.

Mason had rejected the deal with WHA after the dairy company had three attempts to buy the plant.

Peter Hemphill’s family holds shares in Wattle Health Australia.