China-based baby formula manufacturer Ausnutria has acquired Australian dairy company ADP Group and 50% of another business in the country, the infant formula firm Ozfarm.
The Hong Kong-listed Ausnutria, which already has production in Australia, has struck a cash-and-shares deal for ADP, which manufactures and packs infant formula, functional milk powder and milk powder for the elderly.
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ADP is owned by businessman Sheng Zhang, Australian firm El Dorado Health Products Technology and three other unnamed individuals.
Ausnutria has agreed to put up AUD10m (US$7.5m) in cash and more than 13.9m shares in Ausnutrition Care, an indirect, wholly-owned subsidiary, to buy ADP.
Upon completion of the transaction, Ausnutria’s stake in Ausnutrition Care will be reduced from 100% to 70%, with the current owners of ADP holding the other 30% of the subsidiary.
A second deal will see Ausnutria acquire 50% of Ozfarm, a marketer of infant formula, pregnant milk, and milk powder for the elderly. All of Ozfarm’s milk powder products are manufactured by ADP. Ozfarm is owned by Joe Zhou and Lisa Xiang Shi, who will continue to hold 50% of the business. They have also been shareholders in ADP.
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By GlobalDataAusnutria has paid AUD11m for its stake in Ozfarm’s business, which includes the marketing and distribution of nutrition products and formula milk products in Australia, Singapore and China under the brand name Oz Farm.
“Our vision is clear, which is for Ausnutria to become a high-end nutritional supplements and health services company,” Ausnutria chairman Yan Weibin said. “The acquisition of ADP and Ozfarm ensures the execution of corporate development strategies, and is the next step of our Go Global strategy after planning the construction of our new plant the Netherlands in 2015, and signing the agreement with Westland, New Zealand’s second-largest dairy cooperative enterprise, to build a new milk powder factory in 2016.”
Yan added: “With our well-developed distribution system, customer network, and innovative sales model, this will create a powerful synergy with our existing business to expand our global territory and accelerate internationalisation, so as to strengthen the company’s R&D and sustainable development capabilities through the organic combination of overseas advanced R&D innovations, quality control and management, and company development.”
