New Zealand infant-formula maker Synlait Milk has entered into an agreement to buy certain assets of local firm Talbot Forest Cheese. 

Talbot Forest is based in the town of Geraldine and supplies a range of cheeses to foodservice outlets and boutique retailers. Synlait said in a statement today (19 September), issued in conjunction with its annual results, that it will acquire property, plant and equipment at a new factory in Temuka, the consumer cheese brand Talbot Forest Cheese and associated customer relationships.

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The investment is expected to be in the range of NZD30m-40m (US$19.8m-26.4m), which reflects incentives for various conditions to be met.

“The proposed acquisition builds on our existing portfolio of high-quality, flexible dairy manufacturing capabilities that can be tailored to meet customer needs,” said Synlait chief executive Leon Clement, who joined the firm in mid-August.

He continued: “We will be able to manufacture a variety of cheese products that complement our existing product portfolio, whilst at the same time further diversifying our revenue streams. The proposed acquisition contributes to our intention to grow within the everyday dairy category in New Zealand (which is a notable NZD2bn market) and overseas.”

Synlait also reported that its net profit after tax almost doubled in the year to 31 July to NZD74.6m. Revenue climbed from NZD759m to NZD879m, while bottom-line profit after tax increased from NZD39.5m to NZD74.6m.  

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“This has been a milestone year for Synlait as we grew both in capability and capacity,” chairman Graeme Milne said. “We’re stepping up in terms of our performance, and we’re looking ahead at where we want to be.” 

With respect to Talbot Forest, Synlait said the purchase is structured in two parts and settlement is expected in August 2019, once aspects of the conditional agreement have been met. The initial ten-month period includes a commercial loan facility from Synlait for Talbot to complete a capital works programme and satisfy the conditions set out in the agreement.