October 10, 2013


Canada's Saputo to acquire Australia's Warrnambool Cheese and Butter




Montreal-based dairy processor, Saputo Inc. has made an all-cash takeover offer to Australian dairy company Warrnambool Cheese and Butter Factory Company Holdings Limited at AU$7.00 (US$6.61) per share.


The offer has been unanimously recommended by the Board of Warrnambool and all Warrnambool directors recommend that Warrnambool shareholders accept the Offer, in the absence of a superior proposal. Each Warrnambool director and executive intends to accept the Offer for all of the Warrnambool shares they hold or otherwise control, in the absence of a superior proposal.


Earlier, Warrnambool is also the subject of a on-solicited takeover offer launched by an Australian dairy company on September 12, 2013, which offer includes a consideration of cash and shares at an implied offer price of AU$6.30 (US$5.95) per Warrnambool share, calculated on the Australian bidder's share price as at the close of trading on ASX on October 7, 2013.


Based on the current issued share capital of Warrnambool, the purchase price for 100% of the shares of Warrnambool would equal approximately CA$378 million (US$371.18 million). The enterprise value of Warrnambool implied by the Offer is approximately CA$450 million (US$441.88), based on CA$73 million (US$71.68 million) of net debt as of June 30, 2013.


The Australian company listed on the Australian Securities Exchange is one of the largest milk processors in Australia, operating two manufacturing sites in South West Victoria and South Australia and employing over 420 people. The company produces a range of dairy products for domestic and export markets. Its products include cheese, butter and butter blends, milk, cream and dairy ingredients.


For the financial years ended June 30, 2013 and 2012, Warrnambool's consolidated revenues were CA$477 million (US$468.40 million) and CA$479 million (US$470.36 million), respectively, with earnings before interest, tax, depreciation and amortisation (EBITDA) of CA$25 million (US$24.55 million)and CA$34 million (US$33.39 million), respectively.


As publicly disclosed by Warrnambool on October 2, 2013, EBITDA for the financial year ending June 30, 2014 is expected to be in the range of CA$45 million (US$44.19 million) to CA$50 million (US$49.10 million).


Saputo produces, markets, and distributes a wide array of dairy products including cheese, fluid milk, extended shelf-life milk and cream products, cultured products and dairy ingredients. Saputo is one of the top ten dairy processors in the world, the largest in Canada, the third largest in Argentina and among the top three cheese producers in the United States.


Its products are sold in more than 40 countries under the brands Saputo, Alexis de Portneuf, Armstrong, Baxter, Dairyland, Dragone, DuVillage 1860, Friendship, Frigo Cheese Heads, Great Midwest, King's Choice, Kingsey, La Paulina, Milk2Go, Neilson, Nutrilait, Ricrem, Salemville, Stella and Treasure Cave. Saputo Inc. is a publicly traded company listed on the Toronto Stock Exchange.


The Offer is subject to a limited number of conditions (including foreign investment approval and a minimum tender condition of greater than 50%). The Offer is expected to close around early December 2013, unless extended or changed as permitted by the Australian Corporations Act.