Thursday 24th December 2020
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The a2 Milk Company is pleased to confirm that it has, as previously contemplated, entered into binding agreements relating to the acquisition of a 75% interest in Mataura Valley Milk (MVM), a dairy nutrition business, located in Southland, New Zealand.
The proposed acquisition will provide the opportunity for ATM to participate in nutritional products manufacturing, provides supplier and geographic diversification, and strengthens our relationship with key partners in China.
The terms of the transaction are consistent with those previously advised and provide for the acquisition of 75% of MVM for total consideration of NZ$268.5 million, based on an enterprise value of circa NZ$385 million. The acquisition will be undertaken on a debt-free cash-free basis and funded from ATM’s existing cash reserves.
Completion of the proposed transaction is subject to approval of the New Zealand Overseas Investment Office, with completion expected to occur on 31 May 2021.
While it is not expected that the acquisition will be completed until the end of FY21, we expect to incur transaction costs of approximately NZ$10 million which are expected to be treated as a one-off expense in the current fiscal year, of which approximately half will be recognised in 1H21.
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