GRAINCORP has sold its 60 per cent share in flour supplier Allied Mills to Pacific Equity Partners (PEP) for $190 million.
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Joint venture partner Cargill Australia has also sold its 40 per cent interest to PEP.
Allied Mills is Australia’s leading manufacturer of flour, bakery premixes and specialty frozen parbaked bread products, processing around 800,000 tonnes of wheat and specialty grains each year.
The new owner – PEP’s Pinnacle Bakery and Integrated Ingredients business – has a “leading position in the sweet bakery products and bakery ingredients market, manufacturing and distributing finished and unbaked goods such as cakes, pastries, cookies, muffins and donuts, as well as bakery ingredients such as fillings and fondants”.
“Allied Mills has built a deserved reputation for innovative food solutions tailored to the changing needs of our customers. Allied Mills managing director Joseph Di Leo said.
“Our combination with Pinnacle will offer customers a one-stop-shop across bread and sweet bakery products.
“It’s an exciting time for the sector and with PEP committed to investing in the combined company’s strategic assets, there is very solid growth potential.”
PEP managing director, Tony Duthie, said the mill takeover was a “rare combination of complementary businesses operating in truly adjacent categories.”
“PEP has a proven track record of investing in consumer product businesses and we intend to invest significantly to grow and support the integrated business,” he said.
Pinnacle chief executive officer, James Ajaka, said the new venture offered a unique opportunity.
“The combination of Pinnacle and Allied Mills offers a unique opportunity to generate value through category-leading innovation and technology solutions while embedding a world-class supply chain which can service more customers, more often,” he said.
GrainCorp chief executive officer, Mark Palmquist, said the sale was a “excellent opportunity to realise the value in Allied Mills”.
“Along with Cargill Australia, we have been joint investors in Allied Mills for over 15 years,” Mr Palmquist said.
“We would like to thank the management and employees of Allied Mills for our successful relationship over such a long period.”
Allied Mills’ Marius St site in Tamworth is currently undergoing an upgrade worth $21 million.
The transaction is expected to close within two to three months.
