July 17, 2013

FrieslandCampina acquires 7.5% share in Synlait Milk

 
FrieslandCampina Investments Holding has purchased a 7.5% interest in Synlait Milk Ltd.

Completion of this transaction is subject to listing of Synlait Milk Ltd on the New Zealand Stock Exchange, which is expected to occur on July 23, 2013. With this initial public offering the company wants to raise capital to finance its growth.

Synlait Milk plans to use the capital raised to finance, among other things, a new spray dryer and an on-site blending and consumer packaging plant. By acquiring this interest, FrieslandCampina is supporting the company's growth ambitions.

Roelof Joosten, Chief Operating Officer of FrieslandCampina Ingredients, "In recent years, we have developed a close working relationship with Synlait Milk, a supplier of high-quality raw materials. With this investment, we are supporting our supply of raw materials and also the growth of Synlait Milk."

Synlait Milk began processing milk in 2008 and currently has the capacity to process 550 million litres of raw milk, which it procures from around 155 dairy farms in the Canterbury region, into approximately 95,000 tonnes of products each year. The company focuses exclusively on business customers. Prior to the IPO, Bright Dairy Foods held a 51% stake in Synlait Milk. Once completed however, Bright Dairy Foods will hold control approximately 39.1% of the company.

Despite the dilution of its stake in Synlait Milk, the New Zealand Stock Exchange granted Bright Dairy Foods a waiver from a listing rule that would have seen Bright Dairy Foods lose its control of the company's board. The waiver, which was granted on the condition that Bright Dairy Foods owns no less than 37% of shares, allows Bright Dairy to continue to appoint four of the eight Synlait Milk directors.