August 31, 2012
GrainCorp executed agreements to acquire both the Gardner Smith Group and Goodman Fielder's commercial oils business - Integro Foods at a combined price of US$472 million, to form integrated edible oils business, GrainCorp Oils.
Sam Tainsh, who has been with GrainCorp for more than 11 years, most recently as the general manager of GrainCorp Marketing will be appointed as Group General Manager of GrainCorp Oils.
Gardner Smith is Australia's second largest oilseed crusher, a leading operator of bulk liquid port terminals and operates complementary used oil recycling and animal feed businesses. Integro is a leading Australian and New Zealand refiner and packager of edible fats and oils for food industry customers.
GrainCorp managing director and chief executive officer, Alison Watkins, said the acquisitions were consistent with the company's strategic focus on its three core grains - wheat, barley and canola.
"The opportunity to combine Gardner Smith and Integro into a larger business is a clear and logical fit with our business model. Together they build on GrainCorp's existing supply chain management and grain marketing expertise, and expand our downstream processing operations into canola and other edible oils," Ms Watkins said.
"GrainCorp Oils will provide us with immediate scale in the edible oils sector in Australia and New Zealand. The business can crush more than 300,000 tonnes of oilseeds annually, and has 280,000 tonnes of annual edible fats and oils refining and packaging capacity. Its 13 bulk liquid port terminals have high capacity utilisation, with room to grow, and already handle up to 1 million cubic metres of bulk liquids each year.
GrainCorp is targeting US$4 million per annum of synergies (pre-tax) after the first 12 months. Additional incremental earnings are expected from procurement benefits and planned growth projects. The acquisitions are expected to be earnings per share accretive and reduce earnings volatility.
Each of the acquisitions is expected to complete during October 2012, on satisfaction of closing conditions.
