Welcome to the Comet Line quarterly newsletter, where we review corporate activity in the second quarter of 2022.

Following a strong start to the year, corporate activity in the food and beverage industry slowed down during the second quarter of 2022. Investor confidence in the quarter was impacted by soaring inflation, increased input prices, labour shortages and the prospect of interest rate increases.

Eleven transactions were announced in the quarter. The standout categories in the quarter were roast and ground coffee and plant-based foods which attracted investment interest with two transactions completed in both categories. Within the coffee category, Padre Coffee was acquired by Liverpool Partners. The acquisition of Padre Coffee expands the coffee portfolio of Liverpool Partners, following the acquisition of Seven Miles Roasters in September 2021. In New Zealand, specialty coffee roaster, Coffee Supreme, was acquired by Pioneer Capital.

The plant-based food category also attracted acquisition interest, with the sale of two plant-based manufacturers in New Zealand. Pioneer Capital acquired a 75% shareholding in Raglan Food Co. Life Health Foods acquired Chalmers Organics, a plant-based food manufacturer based in Auckland.

The outlook for corporate activity in the food and beverage industry over the next quarter is considered uncertain. The economic outlook is clouded by a series of interest rate increases by the RBA in Australia. The negative impact of the interest rate increases on consumer demand together with increasing input costs and labour shortages will make deal making across the industry challenging over the short term.

Acquisitions announced

Date	Target Name	Acquirer	Sector
29 March 2022	Raglan Food Co (75%)	Pioneer Capital	Plant-based foods
8 April 2022	Padre Coffee	Liverpool Partners	Coffee
11 April 2022	People for Pets	Real Pet Food Company	Pet food
12 April 2022	MD Provodores	In2Food	Fruit and veg distribution
13 April 2022	Bayview Seafoods	Bidfood	Food processing
20 April 2022	Slim Secrets	Winners Sports Nutrition	Healthy snacks
26 April 2022	Nutrano’s banana assets	LaManna Premium Group	Fruit and vegetables
9 May 2022	28 by Sam Wood	myDNA	Nutrition
19 May 2022	Coffee Supreme	Pioneer Capital	Coffee
27 May 2022	Chalmers Organics	Life Health Foods	Plant-based foods
10 June 2022	Oyster Cloud’s agri-tech assets	East 33	Seafood
29 June 2022	The Better Health Company	Nestle Health Science	Vitamins & supplements

Pioneer Capital acquired a 75% stake in Raglan Food Co. Raglan Food Co is a plant-based food manufacturer based in Raglan (NZ) that was established in 2014. Around 90% of Raglan Food’s revenue is generated from sales to the New Zealand grocery channel. Under the guidance of Pioneer Capital, the company will target exports to the USA as a foundation for future growth.

Liverpool Partners acquired specialty coffee roaster and wholesaler, Padre Coffee. Padre Coffee will join forces with Seven Miles Coffee Roasters which was acquired by Liverpool Partners in September 2021. The two businesses will operate as separate brands within the Liverpool Partners coffee portfolio.

Real Petfood Company acquired pet supplement start-up, People for Pets, and invested alongside Gabriel Perera, the founder of the business. People for Pets is the owner of the plant-based “medicinal” water treat brand, Nectar of the Dogs.

In2Food acquired Sydney-based fruit and vegetable distributor, MD Provodores for approximately $8 million. MD Provodores was started in 2004 and supplies more than 550 venues across Sydney with fresh, pre-cut fruit and vegetables.

Bidfood Australia acquired the Bayview Seafoods business from the external administrator.

Snack food business, Slim Secrets, was sold to Winners Sports Nutrition. The Slim Secrets business was founded by Sharon Turin in 2005 and distributes a range of healthy snacking products including protein bars.

LaManna Premier Group acquired Nutrano Produce Group’s banana assets in New South Wales and Victoria. The sale included Nutrano’s Sydney and Melbourne banana operations including the banana ripening facility and stands at the Sydney Markets and a Melbourne warehouse.

Exercise and nutrition program, 28 by Sam Wood, was acquired by myDNA for $71.2 million. The transaction was settled through a combination of cash and scrip. 28 by Sam Wood is an online exercise and nutrition program which has grown to approximately 400,000 users since the program was launched in 2006.

Pioneer Capital followed up the Raglan Food Co acquisition with the acquisition of Coffee Supreme. Coffee Supreme is a leading specialist roast and ground coffee brand with operations in New Zealand, Australia and Japan.

Chalmers Organics, a plant-based food manufacturer based in Auckland, was acquired by Life Health Foods. Life Health Foods is a sister company of Sanitarium Health Food Company. Chalmers Organics manufactures a range of meat alternative products under the Tonzu and Zenzo brands. It also manufactures a range of plant-based dairy alternative products.

ASX listed oyster farmer and distributor, East 33, has acquired the agri-tech assets of Oyster Cloud for $475,000.

Nestlé Health Science acquired NZ-based The Better Health Company. The deal includes the manuka honey brand Egmont, the Go Healthy supplement brand and a manufacturing facility in Auckland that produces vitamins, minerals and supplements.

Listings on the ASX
There were no listings of food and beverages companies on the ASX during the second quarter of 2022.

Welcome to the Comet Line quarterly newsletter, where we review corporate activity in the first quarter of 2022.

Following a strong finish to 2021, corporate activity in the food and beverage industry remained buoyant in the first quarter of 2022.

Twenty transactions were announced in the first quarter of 2022 compared to twelve transactions over the same period in 2021. In the first of two standout transactions in the quarter, UCC Holdings acquired the Oceania fresh coffee business of Suntory Beverage & Food for ¥18.5bn (~A$225 million).

The second standout transaction was Pacific Equity Partners’ acquisition of a controlling stake in Cranky Health, the business that owns The Man Shake weight loss product. The Cranky Health product portfolio includes shake powders, snack bars and bottled drinks and are sold via supermarkets, chemists and direct to consumers via an e-commerce channel.

The outlook for corporate activity remains positive with several sale processes in the pipeline. The fundamentals that underlie industry growth in recent years will continue to attract investors to the food and beverage industry.

Acquisitions announced

Date	Target Name	Acquirer	Sector
10 January 22	Easi	HungryPanda	Meal delivery
11 January 22	MG Kailis Holdings	Sea Harvest Australia	Seafood
12 January 22	Precision Coffee Roasters	Timely Coffees	Coffee
18 January22	Fei Fah Media Balm (HK) Co nutrition	Nature One Dairy	Value-added dairy
25 January 22	Australian Beer Co (50%)	Casella Family Brands	Beer
28 January 22	SPC Global ($111 million capital raise)	Shahin Family and AMIST Super	Packaged Foods
28 January 22	Nutra Organics	Fortitude Investment Partners	Health and nutrition
30 January 22	The Man Shake (controlling stake)	Pacific Equity Partners	Weight loss
1 February 22	Black Hops Brewery ($2.2 million)	Crowdfunding investors	Craft beer
6 February 22	The Cheesecake Shop	River Capital	Hospitality
9 February 22	Fen Food ($3 million capital raise)	Bombora Investment Mgm	Plant-based foods
10 February 22	Suntory Fresh Coffee business	UCC Holdings	Coffee
11 February 22	All G Foods (capital raise)	Investors including Woolworths	Plant-based foods
11 February 22	Angel Seafood Holdings	Laguna Bay Group	Seafood
14 February 22	The Healthy Mummy	Halo Foods	Health and nutrition
23 February 22	Pet Chemist	Mad Paws	Pet food
8 March 2022	Bucket Boys	Batch Brewing Co	Craft beer
9 March 2022	Jalna Dairy Foods	Lactalis	Value-added dairy
15 March 2022	Perfection Fresh	Consortium of investors	Fresh Produce
16 March 2022	Cordina Chickens (controlling stake)	PAG	Poultry

UK-based HungryPanda acquired Melbourne-based food delivery business, Easi for a cash consideration of approximately $50 million. HungryPanda plans to expand into grocery deliveries and Groupon-style lifestyle vouchers in Australia.

Perth-based Timely Coffees announced the acquisition of Precision Coffee Roasters. The acquisition allows Timely Coffees to expand its footprint across Western Australia and it marks the second acquisition in the past two years for the business.

Sea Harvest Australia acquired MG Kailis Holdings for a consideration of $70 million. The acquisition includes vessels, licenses, and fishing rights for prawns in the Exmouth region and trawled fish in the Pilbara region. The transaction valued MG Kailis Holdings on an 11.2x price earnings ratio.

Nature One Dairy acquired Fei Fah Medi Balm (HK) Co’s adult dairy nutrition business in a script-based transaction, valued at approximately $30 million.

Coca-Cola Europacific Partners Australia sold its interest in the Australian Beer Co joint venture to Casella Family Brands. The disposal follows Coca-Cola’s announcement of its exit from the Australian beer market and the proposed sale of Feral Breweries.

Pacific Equity Partners acquired a controlling stake in the business that owns the popular The Man Shake weight loss product. PEP will invest in Cranky Health alongside the founder, Adam MacDougall, and the capital injection is expected to be used to fund growth initiatives.

SPC Global raised $111 million in capital from the Shahin family and AMIST Super to fund expansion into Europe.

Fortitude Investment Partners announced an investment into health and wellness functional foods business, Nutra Organics. Nutra Organics is expected to use the proceeds to accelerate its product, sales, and marketing strategies to meet the growing consumer demand in the industry.

PAG Asia Capital sold The Cheescake Shop to River Capital for an undisclosed consideration. River Capital is a boutique fund manager based in Melbourne.

Suntory Beverage & Food sold its Oceania fresh coffee business to UCC Holdings for ¥18.5bn (~A$225 million). The Oceania fresh coffee business is the largest coffee roaster in ANZ and includes coffee brands: Toby’s Estate, Atomic, L’affare, Robert Harris and Mocopan.

ASX-listed oyster producer, Angel Seafood Holdings, entered into a scheme implementation deed with Laguna Bay Group, whereby Laguna will acquire the remaining shares of Angel Seafood Holdings. Laguna Bay Group has offered a cash consideration of $0.20 per Angel Seafood share. The offer is subject to shareholder and court approval. Laguna Bay is a Brisbane-based specialist food and agricultural investment firm.

ASX-listed Halo Foods (formerly Keytone Dairy) acquired global online health and fitness platform, The Healthy Mummy for an upfront consideration of $17 million plus a A$5 million earnout, subject to revenue and EBITDA performance milestones. The upfront consideration implied a valuation of 4.1x FY21 EBITDA.

ASX-listed Mad Paws acquired Pet Chemist Online, a leading online supplier of pet medication and premium pet healthcare products for $25 million. The purchase consideration will be settled through a combination of cash and script, with the valuation of the upfront consideration based on 2.5x annualised 1H FY22 operating revenue.

Well-known yoghurt brand, Jalna Dairy Foods, was acquired by French multinational dairy producer, Lactalis. Jalna is one of Australia’s best-known Greek yoghurt brands with distribution through Woolworths and Coles. It was reported that the transaction was priced at more than $200 million excluding the property assets.

A consortium of investors acquired a partial interest in Perfection Fresh. The consortium of investors includes Equilibrium Capital, Temasek and the Public Sector Pension Investment Board. The capital raised from the new investors will be used to expand Perfection Fresh’s reach into Asia and other international markets.

The Cordina family has sold a controlling stake in the Cordina Chickens business to private equity investor, PAG. PAG will invest alongside the Cordina family, with Louise Cordina continuing to operate as chief executive officer of the business.

Listings on the ASX
Two companies listed on the ASX in the first quarter of 2022.

• My Foodie Box, a food and logistics technology business that provides meal kits to WA households, listed on the ASX on 7 January 2022 after raising $6 million through a public offer.
• Catalano Seafood, a seller of fresh and frozen seafood products, listed on the ASX on 11 March 2022 following a $5 million capital raise.

2021 was another challenging year for the food and beverage industry. The coronavirus pandemic continued to adversely impact food and beverage businesses in the second year since the pandemic started. In 2021, businesses had to meet many challenges including labour shortages and pressure on the supply chain. Businesses had to incur additional costs to comply with COVID-19 regulations, including cleaning costs, running dual teams, etc. Within this challenging operational environment, it is pleasing to note that corporate activity in the food and beverage industry remained high with quality food and beverage businesses attracting high levels of acquisition interest. Comet Line Consulting’s review of transactions in the food and beverage industry and the key trends for 2021 are summarised below.

More transactions and fewer large transactions
In 2021, three transactions with values in excess of $400 million were announced compared to four transactions in 2019 and seven transactions in 2019. Large transactions in 2021 include the acquisitions of Huon Aquaculture ($546 million), Gourmet Food Holdings ($400 million) and Ziwi Peak (NZ$1.5 billion). The total number of transactions in 2021 amounted to 75, including 10 transactions in the alcoholic beverage category which was not covered in previous years. Excluding alcoholic beverages there were 65 transactions in 2021, an increase from 50 transactions in 2020 and an increase from 59 transactions in 2019.

Reduction in financial investor participation
2021 witnessed an increase in participation in transactions by financial investors (private equity and family office investors). 22 of the 75 transactions announced in 2021 (29%) involved financial investors. This compares to 20% of transactions in 2020, 24% of transactions in 2019, 36% of transactions in 2018 and 30% of transactions in 2017.

IPO volumes at an all-time low
There was only 1 IPO in the food and beverage industry in 2021 compared to 4 IPOs in 2020, 5 IPOs in 2019, 3 IPOs in 2018 and 8 IPOs in 2017. In 2021, $32 million was raised by the company that listed on the ASX, compared to $95 million raised in 2020 ($90 million in 2019, $93 million in 2018 and $80 million in 2017). The capital raised via IPOs over the past 4 years is significantly less than the $1 billion that was raised by food and beverage companies that listed on the ASX in 2016.

For the purposes of this review, we classified transactions in 2021 as Primary Production, Processed / Packaged Foods or Other.

We hope you get value from reflecting on the 2021 transactions. If you have any questions, please do not hesitate to contact us at www.cometlineconsulting.com.au. 

DAIRY & VALUE-ADDED DAIRY

Acquisitions announced

Date	Target Name	Acquirer
31 Mar 2021	The Cashew Creamery	Pure Foods Tasmania
15 Apr 2021	Emerald Foods (NZ Natural)	Walter & Wild
12 May 2021	five:am yoghurt	Barambah Organics
31 May 2021	Van Dairy Group	Prime Value Asset Management
27 July 2021	Nepean River Dairy	Nature One

The dairy sector had a subdued year with 4 transactions announced in the year compared to 11 transactions in 2020 and 13 transactions in 2019.

Barambah Organics, a portfolio company of Tanarra Capital, acquired five:am yoghurt from PZ Cussons. PZ Cussons acquired the five:am yoghurt business from the founders in 2014.

Prime Value, an Australian investment company, acquired 2,200 hectares of dairy land in north-west Tasmania and 5,000 heads of cattle from Van Dairy Company. Prime Value paid $62.5 million for the land and cattle.

Nature One acquired Nepean River Dairy for $36.5 million. Nepean River Dairy sells a range of milk products including cows milk, flavoured milk and long-life milk. The processing assets and product portfolio of Nepean River Dairy will be merged under the Nature One Dairy brand.

FRESH PRODUCE & SALADS

Acquisitions announced

Date	Target Name	Acquirer
10 Mar 2021	Murphy Fresh & Tatura Fresh (merger)	Flavorite
10 May 2021	Pacific Coast Produce Marketing	Perfection Fresh
23 June 2021	2PH Farms	Costa Group
23 July 2021	Fruit Master Australia	Perfection Fresh
23 July 2021	Comfresh Group (20% acquisition)	Far East Group
31 Dec 2021	Salad World	Bidfood

The fresh produce and salads sector attracted strong investor interest in 2021, with five deals announced in 2021.

Flavorite, a portfolio company of ROC Partners and the largest hydroponic grower of tomatoes in Victoria, merged with Murphy Fresh and Tatura Fresh. Murphy Fresh and Tatura Fresh is a leading tomato grower which operates a 15-hectare state-of-the-art hydroponic farm in Mansfield, Victoria. The merger positions the Flavorite Group as the largest owner and operator of glasshouse tomatoes in Australia.

Perfection Fresh completed two transactions in the year. Perfection Fresh’s first transaction was the acquisition of sustainable banana marketing business Pacific Coast Produce Marketing. The acquisition includes licensing rights to The Red Tip Ecoganic banana, which complements two other recently licensed banana varieties: Little Gem and Havana Bananas.

ASX-listed Costa Group acquired a Central Queensland-based citrus grower, 2PH Farms, for an upfront consideration of ~$200 million. Costa Group will pay an additional $31 million in July 2023 for the purchase of a property where a new citrus crop is being planted by 2PH.

Perfection Fresh also acquired full ownership of Fruit Master Australia. Perfection Fresh obtained a shareholding in Fruit Master Australia in 2016, when the companies merged their table grape businesses. The acquisition of Fruit Master Australia expanded Perfection Fresh’s presence and capability in export markets.

MEAT PROCESSING

Acquisitions announced

Date	Target Name	Acquirer
9 June 2021	Rivalea Australia	JBS Australia
2 July 2021	Hardwick’s Meats	Kilcoy Global Foods

Two deals were announced in the meat processing sector in 2021. JBS Australia acquired Rivalea Australia, the largest pork processor in Australia, for $175 million. The acquisition of Rivalea Australia resulted in JBS Australia becoming the largest processor of beef, lamb and pork in Australia.

Kilcoy Global Foods acquired Victorian beef and lamb processor Hardwick’s Meats. Hardwick’s will continue to trade as a separate brand under Kilcoy ownership and will operate as a division of Kilcoy Global Foods.

SEAFOOD

Acquisitions announced

Date	Target Name	Acquirer
17 June 2021	Huon Aquaculture (7.33%)	Tattarang Agrifood
28 July 2021	Cameron of Tasmania	Yumbah Aquaculture
8 Aug 2021	Huon Aquaculture	JBS Australia
4 Nov 2021	Paramount and Brunswick brands	Tempo Group

JBS Foods’ second acquisition in 2021 was the takeover of salmon farmer, Huon Aquaculture. The deal valued Huon Aquaculture at $546 million on an enterprise value basis. Huon is JBS’ first investment in the salmon industry and the Huon operations will make up ~2% of JBS’ global operations. JBS has foreshadowed further investment in aquaculture in Australia.

Listings on the ASX

Date	Entity name	Capital raised	Issue price	31 Dec 2021 price
29 July 2021	East 33	$32 million	$0.20	$0.21

East 33 raised $32 million from investors and listed on the ASX on 26 July 2021. East 33 is a grower of NSW rock oysters that it sells direct to customers and distributes to the foodservice channel.

SNACKING & CONFECTIONERY

Acquisitions announced

Date	Target Name	Acquirer
10 Feb 2021	Diver Foods	Arnott’s Group
9 Mar 2021	Gourmet Food Holdings	Mondelez International
30 Apr 2021	Annex Foods	Five V Capital
30 Apr 2021	Table of Plenty	Five V Capital
7 May 2021	180 degrees	Arnott’s
30 July 2021	Universal Robina Oceania (60%)	Intersnack
30 Aug 2021	Lucky and Sunsol brands	Prolife
9 Sept 2021	Metro Food Co	Five V Capital
15 Sept 2021	Blue Dinosaur	Forbidden Foods

The snacking and confectionery categories were active with nine transactions announced in 2021 compared with the three transactions in 2020 and four transactions in 2019.

Arnott’s Group acquired a 75% shareholding in Diver Foods, a cereal and snacking manufacturer based in Scoresby, Victoria. Diver Foods became part of the new cereals and snack division at Arnott’s which includes the Freedom Foods cereal and snacking assets acquired by Arnott’s Group in December 2020. Comet Line Consulting advised the shareholder of Diver Foods on the disposal to Arnott’s Group.

Arnott’s followed up the investment in Diver Foods with the acquisition of New Zealand artisan biscuit marker, 180 Degrees. 180 Degrees distributes a range of sweet and savoury crackers through a distribution network in New Zealand. In Australia the 180 Degree product is sold through Coles.

Mondelez International acquired Gourmet Food Holdings, a leading manufacturer of premium crackers and biscuits, with brands including OB finest, Olina’s Bakehouse and Crispbic, from CPE Capital. Gourmet Food Holdings had revenue of $200 million and EBITDA of $40 million, with Mondelez acquiring the business for $400 million. The transaction implied a 10x EBITDA multiple for the Gourmet Food Holdings business.

Private equity firm Five V Capital acquired two breakfast and snack food manufacturers, Annex Foods and Table of Plenty, as part of a health food roll-up strategy. In August 2021, Five V Capital expanded its health food portfolio with the acquisition of Metro Food Co, a distributor of health food products.

Germany-based Intersnack acquired full control of Universal Robina Oceania by acquiring the remaining 60% shareholding in the joint venture from Philippines-based Universal Robina Corporation. The acquisition strengthens Intersnack Group’s coverage of the salty snack category in Australia and New Zealand. Universal Robina Oceania operates through two subsidiaries: Snack Brands Australia and Griffin’s Foods (New Zealand).

New Zealand-based Prolife acquired the Lucky and Sunsol snack brands from Select Harvests for $1.5 milion.

ASX-listed Forbidden Foods acquired snack bar company, Blue Dinosaur for an upfront consideration of $3.2 million and an earnout consideration of $0.8 million.

BAKED GOODS & PREPARED MEALS

Acquisitions announced

Date	Target Name	Acquirer
22 Mar 2021	Fitness Outcomes	Patties Foods
13 July 2021	Youfoodz	HelloFresh
24 Aug 2021	Sara Lee	South Island Office
30 Sept 2021	Lorrie’s Pies	Bakery Investment Group
25 Nov 2021	Laurent Bakery	BGH Capital
21 Dec2021	Chefgood	Marley Spoon

Fitness Outcomes, a ready-to-eat meal manufacturer that operates a direct-to-consumer delivery service was acquired by Patties Foods.

Youfoodz, a meal manufacturer that was listed on the ASX, was acquired through a takeover offer by HelloFresh. Youfoodz listed on the ASX in December 2020 and shares were issued at $1.50 per share during the IPO. The 93 cents per share takeover offer placed a value of $125 million on Youfoodz.

South Island Office, a Christchurch-based investor group, acquired the Sara Lee brand and business from McCain Foods. South Island Office’s first investment in 2019 was Original Foods Baking Co. The acquisition of the Sara Lee business creates opportunities to cross sell Original Foods branded product to stockists of Sara Lee product.

BGH Capital acquired a material shareholding in Laurent Bakery. Melbourne-based Laurent Bakery owns a chain of bakeries that sell French-inspired cakes, bread and pastries and supplies sourdough and artisan bread to Coles.

CULLINARY

Acquisitions announced

Date	Target Name	Acquirer
1 Mar 2021	Foundation Foods	GreenMount Foods
1 June 2021	Krio Krush Basic Foods	Atlantic Growth Capital

Krio Krush, a leading manufacturer and supplier of value-added premium herbs and spices to the foodservice channels was acquired by Atlantic Growth Capital. Krio Krush complements the other two businesses in the Atlantic Growth Capital portfolio: Tasty Foods and Mexex. Comet Line Consulting advised the shareholders of Krio Krush on the sale to Atlantic Growth Capital.

Listing on the ASX

Date	Entity name	Capital raised	31 Dec 2021 price
11 Aug 2021	Cobram Estate Olives	None	$1.97

Cobram Estate Olives, Australia’s largest olive oil producer, listed on the ASX in August 2021. The company did not raise any capital as part of the IPO.

SPORTS NUTRITION

Acquisitions announced

Date	Target Name	Acquirer
11 May 2021	True Protein	F45 Training
19 Nov 2021	Eco Superfoods	Flavour Makers

ALCOHOLIC BEVERAGES

Acquisitions announced

Date	Target Name	Acquirer
11 Jan 2021	Two Birds Brewing	Fermentum
16 Mar 2021	Veritas Winery	Accolade Wines
26 Mar 2021	Plantagenet Wines	Wisdom Family
6 Apr 2021	McWilliam’s Wines (2 transactions)	Calabria Wines / Medich Family Office
10 June 2021	Adelaide Hills Group	Mighty Craft
30 Aug 2021	Boujee Wine	80 Proof Liquor
9 Sept 2021	Fermentum Group	Lion
18 Oct 2021	Shene Distillery	Lark Distilling Co
29 Dec 2021	Jetty Road Brewery (32.5%)	Mighty Craft

Fermentum Group, owner of the popular craft beer brand, Stone & Wood, was acquired by Lion. The value of the acquisition was not disclosed and media reports estimated the transaction to be valued at $300 million. Fermentum Group’s product portfolio includes Stone & Wood, Sunly Seltzer, Two Birds, Fixation and Little Dragon. As part of the transaction Lion plans to build on Fermentum’s Stone & Wood brand and the legacy created by the company’s founders.

ASX listed Mighty Craft acquired the Adelaide Hills Group for $47 million settled through the issues of shares and a cash payment. The acquisition includes the Adelaide Hills Distillery, Mismatch Brewing and Hills Cider.

ASX-listed Lark Distilling Co acquired Tasmanian whiskey maker, Shene Distillery for $40 million. Shene Distiller is based at Pontville, north of Hobart.

NON-ALCOHOLIC BEVERAGES

Acquisitions announced

Date	Target Name	Acquirer
21 Apr 2021	Made Group (controlling stake)	TPG Capital
19 Nov 2021	Lyre’s Spirit ($37 m capital raise)	Several investors
29 Nov 2021	Heaps Normal ($8.5m capital raise)	Several investors

TPG Capital acquired a 45% shareholding in Made Group from The Coca-Cola Company. TPG Capital also acquired a 15% shareholding from the founders of Made Group. Following the two transactions TPG Capital owns a 60% stake in Made Group.

Two non-alcoholic beverage brands announced successful capital raises during November. Non-alcoholic spirits brand Lyre’s Spirit raised $37 million from investors with the capital raise led by D Squared Capital and Morgan Creek Capital. Heaps Normal, a non-alcoholic beer brand, raised $8.5 million in Series A funding from new investors in the company.

COFFEE

Acquisitions announced

Date	Target Name	Acquirer
30 Apr 2021	Allpress Espresso	Asahi Beverages
15 June 2021	Campos Coffee	JDE Peat’s
24 Sept 2021	Seven Miles Coffee Roasters	Liverpool Partners
22 Oct 2021	Sensory Lab (retail operations)	Peter Rowland Group

Four deals were announced in the roast and ground coffee category in 2021.

JDE Peet’s acquired Campos Coffee from the founder and other shareholders of the business. Campos Coffee is a leading specialty coffee roaster with distribution to more than 600 cafés and restaurants in Australia. Campos’ distribution footprint extends across multiple channels and includes direct-to-consumer, corporate retail and flagship cafés. Comet Line Consulting advised JDE Peet’s on the acquisition of Campos Coffee.

Asahi Beverages acquired Allpress Espresso, a coffee roaster with distribution in Australia, New Zealand and the United Kingdom. The Allpress acquisition expanded the non-alcoholic portfolio range of Asahi Beverages with a product offering to a diversified customer base spread across the café, restaurant, pub and supermarket channels.

Private equity firm Liverpool Partners acquired coffee equipment company Australian Beverage Corporate and a majority shareholding in Seven Miles Coffee Roasters.

VITAMINS, SUPPLEMENTS & NUTRACEUTICALS

Acquisitions announced

Date	Target Name	Acquirer
12 Apr 21	Voost	Procter & Gamble

Procter & Gamble acquired Voost, the marketer of effervescent vitamins, sports hydration and electrolyte tablets. The acquisition of Voost is in line with Procter & Gamble’s strategy to strengthen its presence in the vitamins, minerals and supplements category.

PETFOOD

Acquisitions announced

Date	Target Name	Acquirer
2 May 2021	Prime 100 (controlling stake)	Quadrant Growth Fund
2 May 2021	Natural Pet Food Group	KKR & Co
5 July 2021	Lyka ($6.5m capital raise)	Shearwater and Wattle Hill
19 Sept 2021	Ziwi Peak	FountainVest Partners

The pet food category attracted significant acquisition interest in 2021, driven by a surge in pet ownership and increasing demand for premium, high quality petfood and accessories.

Four transactions were announced in the petfood category in 2021. The most significant transaction was the acquisition of New Zealand pet food company Ziwi Peak by Chinese private equity firm FountainVest Partners. The value of the acquisition was not disclosed but media reports estimated the transaction to be valued at NZ$1.5 billion.

Quadrant Growth Fund acquired a controlling stake in Prime 100, a premium pet food manufacturer. Prime 100 specialises in single protein products designed to assist dogs and cats with food sensitivities. Prime 100 will explore growth opportunities in export markets and leverage Quadrant’s pet food industry experience.

KKR & Co announced the acquisition of New Zealand-based premium pet food company, Natural Pet Food Group. Natural Pet Food Group owns multiple pet food brands including K9 Natural, Feline Natural and Meat Mates. KKR will support the international growth plans of Natural Pet Food Group which currently distributes product in New Zealand, Australia, China, Japan, Canada and the United States.

FOODSERVICE DISTRIBUTION

Acquisitions announced

Date	Target Name	Acquirer
4 Mar 2021	KB Food Co’s foodservice distribution	Superior Food Services
27 Apr 2021	Elite Food Co	New West Foods
31 May 2021	Craven Foods	Bidfood
1 Dec 2021	The Dreaming Food Group	Hudson Food Group
9 Dec 2021	Quality Food & Beverages	Superior Food Services

Superior Food Services acquired KB Food Company’s foodservice distribution business in Western Australia. The divestment allows KB Food Company to focus on its seafood business which includes the sourcing, processing and wholesaling of fresh and frozen seafood. The acquisition strengthens Superior Food Services’ presence in Western Australia.

Hudson Food Group made a $20 million investment in The Dreaming Food Group for a minority stake. The Dreaming Food Group is a national food manufacturing and foodservice distribution business.

Superior Food Services acquired Brisbane-based Quality Food & Beverages (QFB). QFB is a broadline foodservice distributor with a footprint across Southeast Queensland and a strong presence in the school canteen market.

FRUIT & VEG PROVIDORES

Transactions announced

Date	Target Name	Acquirer
23 June 21	Select Fresh	Costa Group
5 Oct 21	In2Food Australia	Produce Republic

Costa Group acquired Perth-based Select Fresh, a leading fruit and vegetable wholesale distribution business specialising in the supply of fresh produce to the foodservice and independent retail channels in Western Australia. Comet Line Consulting advised the shareholder of Select Fresh on the sale to Costa Group.

GIFTING, ECOMMERCE & MARKETPLACES

Transactions announced

Date	Target Name	Acquirer
30 Mar 2021	Hampers & Gifts Australia	Maggie Beer Holdings
15 July 2021	Parton Wine Distribution	Digital Wine Ventures
29 July 2021	Foodbomb ($4.5m capital raise)	Various investors
8 Aug 2021	Ordermentum (minority disposal)	Various investors
10 Oct 2021	Kaddy	Digital Wine Ventures
23 Dec 2021	Get Wines Direct	BoozeBud

ASX listed Maggie Beer Holdings acquired Hampers & Gifts Australia for a consideration of $40 million. Hampers & Gifts Australia operates through two businesses: The Hamper Emporium and Gifts Australia. Maggie Beer Holdings settled the purchase consideration through the issue of shares in Maggie Beer Holdings and a cash payment.

Sydney-based Foodbomb, a fresh produce wholesale marketplace, raised $4.5 million in a series-A capital raise. The $4.5 million will fund Foodbomb’s existing operations in NSW and Victoria and an expansion of operations to Brisbane. The Foodbomb platform enables hospitality outlets to order fresh produce at bulk buying prices.

ASX-listed Digital Wine Ventures made two acquisitions in 2021. Digital Wine Ventures acquired Parton Wine Distribution in a script-settled deal. DWS also acquired wholesale beverage marketplace, Kaddy Australia, for $34 million.

PLANT BASED FOODS

Transactions announced

Date	Target Name	Acquirer
15 Jan 2021	EVR Foods Inc (25% interest)	Health Plant Protein Group
12 Feb 2021	Lauds Plant Based Foods	Pure Foods Tasmania
14 Apr 2021	Australian Plant Proteins (minority stake)	Bunge
13 July 2021	Harvest B ($3.5m seed funding)	Woolworths and Aura Ventures
17 Aug 2021	Fable Foods ($6.5m capital raise)	Various investors
15 Dec 2021	ProForm Foods (minority stake)	Harvest Road
17 Dec 2021	The Australian Superfood Co	Sustainable Nutrition Group

Bunge, an international grain trader and agri-food company, paid $45.7 million for a minority stake in Australian Plant Proteins (APP). APP manufactures high protein plant-based powders from Australian grown legumes. The investment from Bunge will accelerate the expansion of their plant protein isolate fractionation facility.

Harvest Road, a subsidiary of the Andrew Forrest-backed Tattarang, acquired a minority shareholding in plant-based meat producer, ProForm Foods. ProForm Food will use the investment to accelerate growth and expand its existing production facilities in North Sydney.

OTHER

Transactions announced

Date	Target Name	Acquirer	Sector
23 Dec 21	Prydes Easifeed	Sunrice	Animal feed

Sunrice acquired Prydes’ EasiFeed business for a consideration of $38 million.

Welcome to the Comet Line quarterly newsletter, where we review corporate activity in the third quarter of 2021.

20 transactions were announced in the quarter. The standout transactions in the quarter are listed below:

• the acquisition by Intersnack of full control of Universal Robina Oceania by acquiring the remaining 60% of the company; and
• Lion’s acquisition of Fermentum Group, which includes the Stone & Wood craft beer brand.

We also review the 2019-20 economic data for the food and non-alcoholic beverage industry that was recently released by the Australian Bureau of Statistics. The 2019-20 economic data includes the impact of the first 4 months of the COVID-19 pandemic.

The food and beverage industry grew sales income by 4.3% in 2019-20 to $103.6 billion. Sales income delivered compound annual growth (CAGR) of 3.9% over the 3-year period to 2019-20.

The industry reported strong profitability with EBITDA increasing by 16% in 2019-20. EBITDA increased by 10.6% CAGR over the 3-year period to 2019-20.

The 2019-20 EBITDA included increased government support payments (JobKeeper, etc.), which boosted the 2019-20 performance. The 2019-20 EBITDA/sales ratio amounted to 8.3%, an increase from the 2018-19 EBITDA ratio of 7.5%. If the above average government support payments are normalised to the 2018-19 level, then EBITDA/sales ratio is recalculated as 7.9%.

The 2019-20 economic data paints a rosy picture for the food and beverage manufacturing industry. The economic data is not split between the different channels (retail, foodservice and export). The COVID-19 lockdown and trading restrictions in the last 4 months of 2019-20 negatively impacted suppliers to the foodservice channel, while suppliers to the larger retail channel on the whole benefited from the lockdown and trading restrictions. The differential impact of the restrictions on the channels are not reflected in the industry-wide economic data.

Acquisitions announced

Date	Target Name	Acquirer	Sector
2 July 2021	Hardwick’s Meats	Kilcoy Global Foods	Meat processing
5 July 2021	Lyka ($6.5m capital raise)	Shearwater and Wattle Hill	Petfood
13 July 2021	Harvest B ($3.5m seed funding)	Woolworths and Aura Ventures	Plant-based foods
13 July 2021	Youfoodz	HelloFresh	Ready-made meals
23 July 2021	Fruit Master Australia	Perfection Fresh	Fresh produce
27 July 2021	Nepean River Dairy	Nature One	Dairy
28 July 2021	Cameron of Tasmania	Yumbah Aquaculture	Seafood
30 July 2021	Universal Robina Oceania (60%)	Intersnack	Snacking and biscuits
23 July 2021	Comfresh Group (20% acquisition)	Far East Group	Fresh produce
29 July 2021	Foodbomb ($4.5m capital raise)	Various investors	Foodservice distribution
1 August 2021	DrinkScene	Aaron Zerefos Enterprises	Beverage distribution
8 August 2021	Ordermentum (minority disposal)	Various investors	Foodservice distribution
8 August 2021	Huon Aquaculture	JBS Foods	Seafood
17 August 2021	Fable Foods ($6.5m capital raise)	Various investors	Plant-based meat
24 August 2021	Sara Lee	South Island Office	Bakery
30 August 2021	Lucky and Sunsol brands	Prolife	Snacking
30 August 2021	Boujee Wine	80 Proof Liquor	Alcoholic Beverages
9 September 2021	Fermentum Group	Lion	Alcoholic Beverages
15 September 2021	Blue Dinosaur	Forbidden Foods	Healthy snacking
24 September 2021	Seven Miles Coffee Roasters	Liverpool Partners	Coffee

Kilcoy Global Foods acquired Victorian beef and lamb processor, Hardwicks Meats. Post acquisition, Hardwicks will continue to trade as a separate brand and will operate as a division of Kilcoy Global Foods.

HelloFresh submitted a $125 million offer (93 cents per share) to acquire ASX-listed meal manufacturer, Youfoodz. The offer is subject to Youfoodz shareholder approval with the scheme meeting scheduled for 8 October 2021. Youfoodz listed on the ASX in December 2020 and shares were issued at $1.50 per share during the IPO.

Perfection Fresh acquired full ownership of Fruit Master Australia. Perfection Fresh obtained a shareholding in Fruit Master Australia in 2016, when the companies merged their table grape businesses. The acquisition enables Perfection Fresh to expand its presence and capability in export markets.

Nature One acquired Nepean River Dairy for $36.5 million. Nepean River Dairy sells a range of milk products including cows milk, flavoured milk and long-life milk. The manufacturing capabilities and product portfolio of Nepean River Dairy will be merged under the Nature One Dairy brand.

Germany-based Intersnack acquired full control of Universal Robina Oceania by acquiring the remaining 60% shareholding. Universal Robina Oceania operates through Snack Brands Australia and Griffin’s Foods (New Zealand).

Far East Group, a diversified Singapore-based group, subscribed for a 20% shareholding in Comfresh Group for a consideration of $7.3 million. Comfresh is an Adelaide-based grower and distributor of fresh produce to wholesalers, retailers and supermarkets. Comfresh’s application to build three glasshouses at an estimated cost of $58.5 million was approved by the South Australian government in June 2021.

Sydney-based Foodbomb, a fresh produce wholesale marketplace, raised $4.5 million in a series A capital raise. The $4.5 million capital raised will fund Foodbomb’s existing operations in NSW and Victoria and an expansion of operations to Brisbane. The Foodbomb platform enables hospitality outlets to order fresh produce at bulk buying prices.

Ordermentum announced the sale of a minority shareholding, held by RoZetta, to a group of new investors. The selldown of the RoZetta shareholding made up the bulk of a $6 million secondary funding round for Ordermentum.

JBS Foods agreed a takeover deal with the major shareholders of Huon Aquaculture to acquire the ASX-listed salmon farmer. The deal values Huon Aquaculture at $546 million. Other participants in the sale process included Tattarang and Cooke Aquaculture. The takeover offer for Huan Aquaculture is subject to FIRB approval.

South Island Office, a Christchurch-based investor group, acquired the Sara Lee brand and business from McCain Foods. South Island Office’s first investment was Original Foods Baking Co, a manufacturer of sweet baked goods, which it acquired in 2019. The acquisition of Sara Lee may create opportunities to sell Original Foods branded product to stockists of Sara Lee product in Australia.

Fable Foods, a plant-based meat company that uses shitake mushroom stems as a base ingredient, raised $6.5 million in seed funding from investors. The funding round was led by Blackbird Ventures. The $6.5 million capital raised will be used to fund R&D and to expand manufacturing capabilities.

Fermentum Group, owner of the popular craft beer brand, Stone & Wood, was acquired by Lion. The value of the acquisition was not disclosed and media reports estimated the transaction to be valued at $300 million. Fermentum Group’s product portfolio includes Sunly Seltzer, Two Birds, Fixation and Little Dragon. As part of the transaction Lion plans to build on Fermentum’s existing Stone & Wood brand and the legacy created by the company’s founders.

ASX-listed Forbidden Foods acquired snack bar company, Blue Dinosaur for an upfront consideration of $3.2 million and an earnout consideration of $0.8 million.

Listings on the ASX
Olive Oil producer Cobram Estate listed on the ASX on 11 August 2021. Cobram Estate did not raise any capital as part of the listing process and had a market capitalisation of $780 million on 30 September 2021.

Welcome to the Comet Line quarterly newsletter, where we review corporate activity in the second quarter of 2021.

Following a strong start to the year, corporate activity in the food and beverage industry accelerated during the second quarter of 2021. Investment confidence remains high driven by low interest rates and the Australian GDP back at pre-pandemic levels.

Twenty-six transactions were announced in the quarter. The standout categories in the quarter were: speciality coffee and premium pet food which attracted strong investment interest with two transactions completed in both categories. Within the speciality coffee category, Asahi Beverages acquired Australia / New Zealand-based coffee business, Allpress Espresso. This transaction was followed by JDE Peet’s acquisition of Campos Coffee.

The premium pet food category attracted investment interest from financial investors. Quadrant Growth Fund acquired a controlling stake in Prime 100, a premium pet food manufacturer which specialises in single protein products. KKR & Co also announced the acquisition of Natural Pet Food Group, a New Zealand-based premium pet food company, with brands including K9 Natural, Feline Natural and Meat Mates.

The second quarter of 2021 was a busy quarter for Comet Line Consulting. Comet Line Consulting provided sell-side advice to the owners of two businesses that sold during the quarter:

• Krio Krush Basic foods, a manufacturer of seasonings, herbs and spices, that was sold to Atlantic Growth Capital; and
• Select Fresh, a Perth-based wholesale distributor of fresh produce, that was sold to Costa Group.

Comet Line also assisted JDE Peet’s on its acquisition of specialty coffee roaster, Campos Coffee.

The outlook for the food and beverage industry is positive with trade players and financial investors attracted to the industry fundamentals and demonstrated resilience through the course of the COVID 19 pandemic.

Date	Target Name	Acquirer	Sector
1 Mar 2021	Foundation Foods	GreenMount Foods	Culinary
26 Mar 2021	Plantagenet Wines	Wisdom Family	Alcoholic beverages
31 Mar 2021	The Cashew Creamery	Pure Foods Tasmania	Ice cream
6 Apr 2021	McWilliam’s Wines (2 transactions)	Calabria Wines / Medich Family Office	Alcoholic beverages
12 Apr 2021	Voost	Procter & Gamble	Vitamins
14 Apr 2021	Australian Plant Proteins (minority stake) Diver Foods	Bunge	Plant based foods
21 Apr 2021	Made Group (controlling stake)	TPG Capital	Beverages
27 Apr 2021	Elite Food Co	New West Foods	Foodservice distribution
30 Apr 2021	Allpress Espresso	Asahi Beverages	Coffee
30 Apr 2021	Annex Foods	Five V Capital	Breakfast and snacking
30 Apr 2021	Table of Plenty	Five V Capital	Breakfast and snacking
2 May 2021	Prime 100 (controlling stake)	Quadrant Growth Fund	Pet food
2 May 2021	Natural Pet Food Group	KKR & Co	Pet food
7 May 2021	180 degrees	Arnott’s	Biscuits
10 May 2021	Pacific Coast Produce Marketing	Perfection Fresh	Fresh produce
11 May 2021	True Protein	F45 Training	Sports nutrition
12 May 2021	five:am yoghurt	Barambah Organics	Dairy
31 May 2021	Van Dairy Group	Prime Value Asset Management	Dairy
1 June 2021	Krio Krush Basic Foods	Atlantic Growth Capital	Seasonings and spices
9 June 2021	Rivalea Australia	JBS Australia	Meat processing
10 June 2021	Adelaide Hills Group	Might Craft	Alcoholic beverages
10 June 2021	East 33 ($32 million capital raise)	Various investors	Seafood
15 June 2021	Campos Coffee	JDE Peat’s	Coffee
17 June 2021	Huon Aquaculture (7.33%)	Tattarang Agrifood	Seafood
23 June 2021	2PH Farms	Costa Group	Fresh produce
23 June 2021	Select Fresh	Costa Group	Fruit & veg providore

GreenMount Foods acquired Foundation Foods, a New-Zealand based manufacturer of high-quality culinary stocks and glazes. Following the acquisition, the manufacturing of Foundation Foods product will be shifted to the GreenMount Foods facility in Tauranga.

Pure Foods Tasmania acquired plant-based ice cream business, The Cashew Creamery for $420,000.

Procter & Gamble acquired Voost, the marketer of effervescent vitamins, sports hydration and electrolyte tablets. The acquisition of Voost is in line with Procter & Gamble’s strategy to strengthen its presence in the vitamin, mineral and supplements category.

Bunge, an international grain trader and agri-food company, paid $45.7 million for a minority stake in Australian Plant Proteins (APP). APP manufactures high protein plant-based powders from Australian grown legumes. The investment from Bunge will accelerate the expansion of their plant protein isolate fractionation facility.

TPG Capital acquired a 45% shareholding in Made Group from The Coca-Cola Company and Coca-Cola Amatil. TPG also acquired a shareholding from the company’s founders resulting in TPG owning a 60% stake in Made Group.

Perth-based foodservice distributor, New West Foods, announced the acquisition of Elite Food Co. The acquisition positions New West Foods as the largest independent foodservice distributor in Perth.

Asahi Beverages acquired Australia / New Zealand-based coffee business, Allpress Espresso. The acquisition expands Asahi Beverages non-alcoholic portfolio range and provides a broader product offering to customers in the café, restaurant, pub and supermarket channel.

Private equity firm Five V Capital acquired two breakfast and snack food manufacturers during the quarter, Annex Foods and Table of Plenty. It is anticipated the private equity firm will seek additional bolt-on acquisition opportunities within the ‘better for you’ food and beverage categories.

Quadrant Growth Fund acquired a controlling stake in Prime 100, a premium pet food manufacturer. Prime 100 specialises in single protein products designed to assist dogs and cats with food sensitivities. Prime 100 will seek growth opportunities in export markets and leverage Quadrant’s pet food industry experience developed through the ownership of Real Pet Food Company.

KKR & Co announced the acquisition of New Zealand-based premium pet food company, Natural Pet Food Group. Natural Pet Food Group owns multiple pet food brands including K9 Natural, Feline Natural and Meat Mates. KKR will support the international growth plans of Natural Pet Food Group which currently distributes product in New Zealand, Australia, China, Japan, Canada and the United States.

Arnott’s acquired 180 degrees, a New Zealand-based cracker and biscuit business. The acquisition strengthens Arnott’s position in the premium cracker category with a distribution footprint across Australia and New Zealand.
Perfection Fresh acquired sustainable banana business Pacific Coast Produce Marketing. The acquisition includes licensing rights to The Red Tip Ecoganic banana, which complements two other recently licensed banana varieties: Little Gem and Havana Bananas.

Sydney-based nutritional supplements business, True Protein, was acquired by F45 Training. True Protein was established in 2014 and manufactures a range of lean muscle development and weight management products.

Barambah Organics, a portfolio company of Tanarra Capital acquired five:am yoghurt from PZ Cussons. PZ Cussons acquired the five:am yoghurt in 2014. The disposal followed after a strategic review conducted by PZ Cussons found that the yoghurt category did not form part of PZ Cussons’ future business plans.

Krio Krush, a leading manufacturer and supplier of value-added premium natural seasonings, herbs and spices to the foodservice and industrial channels was acquired by Atlantic Growth Capital. Krio Krush complements other businesses in the Atlantic Growth Capital portfolio which include Tasty Spices and Mexex. Comet Line Consulting advised the shareholders of Krio Krush on the sale to Atlantic Growth Capital.

JBS Australia acquired Rivalea Australia, the largest pork processor in Australia for $175 million. Through the acquisition, JBS Australia becomes the largest processor of beef, lamb and pork in Australia. The acquisition of Rivalea Australia is subject to ACCC approval.
ASX listed Mighty Craft acquired Adelaide Hills Group comprising four distinct companies offering craft spirits, craft beer, craft cider and a destination distillery & function centre. Mighty Craft expects the combined group to deliver revenue of $78.7 million and EBITDA of $6 million in FY22. Adelaide Hills Group was acquired for $47 million, settled through a cash consideration of $27 million and $20 million in issued shares.

The world’s leading pure-play coffee and tea company, JDE Peet’s, acquired Campos Coffee. Campos Coffee is a leading specialty coffee roaster available in over 600 cafes and present in multiple channels including direct-to-consumer, retail and its own flagship cafes. Comet Line Consulting assisted JDE Peet’s with the transaction.

Costa Group acquired a Central Queensland based citrus grower, 2PH Farms, for an upfront consideration of ~$200 million. Costa Group will pay an additional $31 million in July 2023 for the purchase of an additional property where a new citrus crop is currently being planted by 2PH.

Costa Group also acquired Select Fresh, a leading fruit and vegetable wholesale distribution business specialising in the supply of fresh produce to the foodservice and independent retail channel in Western Australia. The acquisition extends Costa Group’s supplier grower base and provides a platform to supply national customers in the catering and meal kit segments. Comet Line Consulting advised the shareholder of Select Fresh on the sale to Costa Group.

Listings on the ASX
There were no listings of food and beverages companies on the ASX during the second quarter of 2021.

Welcome to the Comet Line quarterly newsletter, where we review corporate activity in the first quarter of 2021.

Following a stronger than expected finish to 2020, corporate activity in the food and beverage industry remained buoyant in the first quarter of 2021. Investment confidence has increased significantly over the last 12 months with historically low interest rates, government economic stimulus payments and minimal COVID-19 transmissions within the community playing a key role.

Twelve transactions were announced in the quarter. The first of two standout transactions of the quarter were Arnott’s Group acquiring a 75% shareholding in Diver Foods, a cereal and snacking manufacturer. Diver Foods will become part of the new cereals and snack division at Arnott’s which will include the Freedom Foods cereal and snacking assets acquired by Arnott’s Group in December 2020. Comet Line Consulting advised the shareholder of Diver Foods on the disposal to Arnott’s Group.

The second transaction was Mondelez International’s acquisition of Gourmet Food Holdings, a leading manufacturer of premium crackers and biscuits with brands including OB finest, Olina’s Bakehouse and Crispbic. Gourmet Food Holdings reportedly had revenue of $200 million and EBITDA of $40 million, with Mondelez acquiring the business for $400 million.

The outlook for the food and beverage industry is positive with trade players and financial investors attracted to businesses which have performed strongly through 2020 and are positioned for growth as consumer behaviour and purchasing habits continue to evolve.

Acquisitions announced

Date	Target Name	Acquirer	Sector
18 Dec 2020	Corio Bay Dairy Group	Maeil Dairies	Dairy
6 Jan 2021	Vow Foods ($6m capital raise)	Various investors	Cultured meat
11 Jan 2021	Two Birds Brewing	Fermentum	Craft brewery
15 Jan 2021	EVR Foods Inc (25% interest)	Health Plant Protein Group	Plant based foods
10 Feb 2021	Diver Foods	Arnott’s Group	Breakfast and snacking
12 Feb 2021	Lauds Plant Based Foods	Pure Foods Tasmania	Plant based foods
4 Mar 2021	KB Food Co’s foodservice distribution	Superior Food Services	Foodservice distribution
9 Mar 2021	Gourmet Food Holdings	Mondelez International	Snacking
10 Mar 2021	Murphy Fresh & Tatura Fresh (merger)	Flavorite	Fresh produce
16 Mar 2021	Veritas Winery	Accolade Wines	Alcoholic beverages
22 Mar 2021	Fitness Outcomes	Patties Foods	Prepared meals
30 Mar 2021	Hampers & Gifts Australia	Maggie Beer Holdings	eCommerce gifting

The assets of Corio Bay Dairy Group were sold to Korean dairy company Maeil Dairies for $13.5 million. Coria Bay Dairy Group was a joint venture company between Wattle Health Australia and Organic Dairy Farmers of Australia. The joint venture was adversely impacted after Organic Dairy Farmers of Australia was placed into receivership in May 2020.

Sydney-based cultured meat startup, Vow Foods, raised US$6 million in seed capital to expand its portfolio of cultured meats. Vow Foods began producing lab-grown meat from pork and kangaroo cells in 2019. It has since expanded to producing meat from 11 different animals.

Brewery investor, Fermentum, acquired Melbourne-based craft brewer Two Birds Brewing. Following the acquisition, Two Birds product will be brewed at a Fermentum-owned brewery located in Spotswood, Melbourne. Fermentum’s other brewery assets include Stone & Wood, Fixation Brewing Co, Forest for the Trees, Granite Belt Cider, Sunrise Drinks and Square Keg.

ASX listed Health Plant Protein Group (formerly Buderim Group) acquired a 24% interest in EVR Foods Inc. for an investment of US$5 million. US-based EVR Foods Inc. is the owner of the LAVVA brand, a plant-based clean yoghurt and milk brand.

Arnott’s Group acquired a 75% shareholding in Diver Foods, a cereal and snacking manufacturer based in Scoresby, Victoria. Chris Diver, the managing director of Diver Foods, will continue to own 25% of the Diver Foods business following the transaction. Diver Foods will become part of the new cereals and snack division at Arnott’s which will include the Freedom Foods cereal and snacking assets acquired by Arnott’s Group in December 2020. Comet Line Consulting advised the shareholder of Diver Foods on the disposal to Arnott’s Group.

Pure Foods Tasmania acquired Lauds Plant Based Foods for $350,000.

Superior Food Services acquired KB Food Company’s foodservice distribution business in Western Australia.  KB Food Company is Australia’s largest seafood company and the divestment allows the business to focus on the sourcing, processing and wholesaling of fresh and frozen seafood. The acquisition by Superior Food Services strengthens the distributor’s presence in Western Australia and expands the national distribution footprint.

Mondelez International announced the acquisition of Gourmet Food Holdings, a leading manufacturer of premium crackers and biscuits, with brands including OB finest, Olina’s Bakehouse and Crispbic. Gourmet Food Holdings reportedly had revenue of $200 million and EBITDA of $40 million, with Mondelez acquiring the business for $400 million. The transaction implied a 10x EBITDA multiple for the Gourmet Food Holdings business. The acquisition of Gourmet Food Holdings is in line with Mondelez’s strategy to accelerate the groups leadership position in the snacking category across Australia and New Zealand.

Flavorite, a portfolio company of ROC Partners since July 2020 and the largest hydroponic grower of tomatoes in Victoria, merged with Murphy Fresh and Tatura Fresh.  Murphy Fresh and Tatura Fresh is a leading tomato grower which operates a 15 hectare state-of-the-art hydroponic farm in Mansfield, Victoria. The merger positions Flavorite Group as the largest owner and operator of glasshouses in Australia.

Accolade Wines Australia acquired Veritas Winery, the Barossa Valley-based winery producing Rolf Binder Wines for $20 million. The transaction is in line with Accolade Wines’ growth strategy and will allow it to expand its Barossa and South Australian wine region portfolio.

Fitness Outcomes, a ready-to-eat meal manufacturer which operates a direct to consumer delivery service was acquired by Patties Foods. Fitness Outcomes product is also ranged in Coles, Woolworths and independent retail and broadens Patties Foods’ portfolio of prepared meal brands.

ASX listed Maggie Beer Holdings acquired The Hamper Emporium and Gifts Australia businesses through the acquisition of Hampers & Gifts Australia. Hampers & Gifts is a leading eCommerce gourmet hamper and gift business with forecasted revenue of $36.4 million and EBITDA of $9 million in FY21. Maggie Beer acquired the business for $40 million settled through the issue of shares in Maggie Beer Holdings and a cash consideration. An additional earn-out incentive of up to $15 million is in place, based on the future performance of the business.

Listings on the ASX

There were no listings of food and beverages companies on the ASX during the first quarter of 2021.

2020 was a challenging year for the food and beverage industry. The outbreak of the coronavirus pandemic and the containment measures implemented by the Australian and New Zealand governments significantly impacted the levels of corporate activity over the course of 2020.

Suppliers and distributors to the foodservice channel were significantly impacted following the closure of clubs, licensed premises in hotels and pubs, casinos and night clubs during the first two quarters of the year. The closure of hospitality venues was gradually eased in all states, except for Victoria, where restrictions were gradually eased in the fourth quarter of 2020.

Less transactions and fewer large transactions

In 2020, four transactions with values in excess of $400 million were announced compared to seven transactions in 2019 and two transactions in 2018. The large transactions in 2020 include the acquisitions of Coca Cola Amatil ($9.3 billion), PFD Food Services ($552 million), Lion’s Dairy and Drinks business ($560 million) and the disposal of Fonterra’s China Farms business (NZ$514 million). Several of the large transactions are still subject to ACCC or court/shareholder approval. The total number of transactions in 2020 amounted to 50, a decrease from the 59 transactions in 2019 and consistent with the 50 transactions in 2018.

Reduction in financial investor participation

2020 witnessed a decrease in participation in transactions by financial investors (private equity and family office investors) in the food and beverage industry. 10 of the 50 transactions announced in 2020 (20%) involved financial investors. This compares to 24% of transactions in 2019, 36% of transactions in 2018 and 30% of transactions in 2017.

IPO volumes remain low

There were 4 IPOs in the food and beverage industry in 2020 compared to 5 IPOs in 2019, 3 IPOs in 2018 and 8 IPOs in 2017. In 2020, $95 million was raised by companies listing on the ASX, compared to $90 million raised in 2019 ($93 million in 2018 and $80 million in 2017). The capital raised through IPOs over the past 4 years is significantly less than 2016, when $1 billion was raised by food and beverage companies that listed on the ASX in 2016.

For the purposes of this review, we classified transactions in 2020 as Primary Production, Processed / Packaged Foods or Other.

DAIRY AND VALUE-ADDED DAIRY

Acquisitions announced

Date	Target Name	Acquirer
2 Mar 2020	Dennington Milk Plant	ProviCo Australia
11 June 2020	Beston Global Food’s dairy farms	Aurora Dairies
17 Aug 2020	Marsh Dairy Products	Extra Mile Foods
11 Sept 2020	Dairy Country	Fonterra
18 Sept 2020	Organic Dairy Farmers of Australia	Remarkable Milk Company
1 Oct 2020	Barambah Organics	Tanarra Capital
5 Oct 2020	China Farms (Fonterra)	Inner Mongolia Dairy Co
19 Oct 2020	Deep South ice cream	Talley’s
15 Nov 2020	Lion Dairy & Drinks	Bega Cheese
18 Dec 2020	Inghams NZ Dairy Nutrition Group	SunRice Group
24 Dec 2020	Mataura Valley Milk (75% shareholding)	A2 Milk

The dairy sector was active with 11 transactions announced in the year, slightly down from the 13 transactions announced in 2019 (6 transactions in 2018).

Fonterra sold the Dennington processing plant to ProviCo Australia. Fonterra closed the Dennington plant in May 2019 after a reduction in milk intake. ProviCo Australia is the largest supplier of calf milk replacers, manufacturing a range of feed and vitamin fortified products for animals. ProviCo will use the Dennington site to manufacture animal nutrition foods.

ASX-listed Beston Global Food Company sold its dairy farm interests in the Mount Gambier region to Aurora Dairies for $40.4 million. The transaction included the sale of water licenses and operating assets. Beston Global Food Company used the proceeds from the sale to reduce debt and focus on the expansion of its mozzarella and dairy nutraceuticals production lines.

Extra Mile Food Trading acquired Marsh Dairy Products for an undisclosed consideration. Marsh Dairy Products supplies bulk dairy ingredients including cheeses, butters and milk powders and honey to the retail and foodservice channels. Marsh Dairy Products operates from an export-grade facility based in Footscray, Victoria. Extra Mile Food Trading is a wholesaler and distributor of premium food and beverage products to the foodservice and industrial channels.

Fonterra acquired Melbourne-based secondary cheese-processing company Dairy Country from Retail Food Group for $19.23 million. Dairy Country prior to the acquisition provided shredding and grating services for Fonterra’s retail cheese products. The transaction facilitates Retail Food Group’s exit from its foodservice and manufacturing pursuits, enabling a focus on its core retail food franchising and coffee business.

The Remarkable Milk Company acquired the assets of Organic Dairy Farmers of Australia. Organic Dairy Farmers of Australia was placed into receivership in May 2020. The acquisition includes the land, processing facility and all brands and trademarks.

Queensland based organic dairy product producer, Barambah Organics, sold a 70% shareholding to Tanarra Capital. Barambah Organics produces organic milk, yoghurt, cream and cheese, which are sold via a national distribution agreement with supermarket group IGA. Barambah Organics has farms across Queensland and NSW.

Fonterra sold its China Farms business in Ying and Yutian, China, for NZ$514 million to Inner Mongolia Natural Dairy Co. Fonterra will use the proceeds from the disposal to pay down debt and focus on domestic producers.

Dairyworks Limited, a subsidiary of Synlait Milk, sold the Deep South brand and associated ice cream operations to Talley’s for an undisclosed sum. Synlait does not consider ice cream part of its core business.

Bega Cheese acquired Lion’s Dairy and Drinks business for $560 million. After IT separation costs of $26 million the net purchase price paid by Bega Cheese was $534 million. The deal lifted Bega Cheese’s milk intake to 1.7 billion litres annually, from 955 million litres and added milk, juice and yoghurt brands which include Big M and Yoplait, to the Bega Cheese product portfolio. The transaction implied a 10x EBITDA multiple and 0.35x revenue multiple for the Lion Dairy and Drinks business.

SunRice Group’s CopRice business acquired the NZ dairy nutrition business of Inghams Group. The cost of the acquisition was NZ$11.5 million and included Ingham’s feed mill at Hamilton and a direct-to-farm and packaged nutrition business in New Zealand. The acquisition represents CopRice’s first expansion into the New Zealand dairy market. The diary nutrition business reported revenue of NZ$25 million for the year to 27 June 2020.

A2 Milk acquired a 75% shareholding in Mataura Valley Milk for NZ$268.5 million. Mataura produces a number of nutritional and milk powders. The remaining 25% of Mataura remains with China Animal Husbandry Group, a key distributor of A2 Milk’s products in China.

Listings on the ASX

Date	Entity name	Capital raised	Issue price	31 Dec 20 price
23 Jan 2020	Happy Valley Nutrition	$12.5 million	$0.20	$0.17

Happy Valley Nutrition, a Waikato-based infant formula maker in New Zealand, listed on the ASX in January 2020 and raised $12.5 million through the offer. The company intended to use the proceeds from the offer to develop a nutritional grade processing facility for the manufacture of infant formula and dairy powder products.

MEAT PROCESSING

Acquisitions announced

Date	Target Name	Acquirer
28 May 2020	Frew International (50%)	Thomas Foods International

Thomas Food International acquired a 50% stake in Frew International. Frew operates a meat processing facility in Stawell, Victoria. The facility has capacity to process more than 6,000 lamb, sheep and goat daily.

POULTRY

Acquisitions announced

Date	Target Name	Acquirer
1 July 2020	Canon Foods	Hellers

Only one transaction was announced in the poultry sector in 2020. Hellers acquired Perth-based Canon Foods. Canon Foods operates a chicken processing facility from a site based in Jandakot, WA. Canon Foods produces Chevups skinless beef sausages and the Get Vegged vegetarian range. Hellers is owned by private equity investor, Adamantem Capital.

SEAFOOD

Acquisitions announced

Date	Target Name	Acquirer
30 Jan 2020	Petuna Aquaculture (50%)	Sealord Group
25 Feb 2020	Ocean Foods International	Harvest Road Group
6 April 2020	Clean Seas Seafood (9.7%)	Hofseth Group

New Zealand based Sealord Group acquired the remaining 50% shareholding in Petuna Aquaculture from the Rockliff family. Petuna Aquaculture was founded in the early 1990s and farms ocean trout and Tasmanian Atlantic salmon. Sealord acquired 50% of Petuna Aquaculture in 2010 and the company became a wholly owned subsidiary of Sealord Group after the transaction.

Harvest Road Group acquired the Albany-based oyster farm operation, Ocean Foods International (OFI). OFI operates an oyster farm at Emu Point (WA) and is a supplier of WA oysters to the WA market. The acquisition of OFI made Harvest Road one of the Australia’s biggest leaseholders for shellfish aquaculture.

Hofseth Group, a Norwegian bio-marine company, invested $5 million in ASX-listed Clean Seas Seafood. The investment by Hofseth will result in a 9.7% shareholding in Clean Seas Seafood.

SNACKING AND CONFECTIONERY

Acquisitions announced

Date	Target Name	Acquirer
5 May 2020	Ausfec barline assets	Keytone Dairy
28 May 2020	GKC Foods	Barry Callebaut
5 Nov 2020	Patons Macadamia	Ray Rust
17 Dec 2020	Freedom Food cereal & snacking assets	Arnott’s

ASX-listed Keytone Dairy acquired the manufacturing assets of AusConfec for $2.25 million. The assets acquired include equipment for the manufacture of protein bars. Keytone Dairy raised $12.5 million through a share placement to fund the acquisition and future expansion opportunities.

Barry Callebaut Group acquired Victoria-based B2B industrial chocolate manufacturer, GKC Foods. GKC Foods produces chocolate, coatings and fillings for consumer chocolate brands. Barry Callebaut has 10 chocolate and cocoa factories across Asia. The acquisition of GKC Foods will provide Barry Callebaut with a manufacturing presence in Australia.

Dymocks sold the Patons Macadamia business to Ray Rust, the managing director of the business. Dymocks acquired the Patons business in 2010 and added the Gourmet Nut Company to the portfolio in 2015. The Patons business includes the Suncoast Gold retail brand.

The Arnott’s Group acquired the Cereal and Snacks business from Freedom Foods for $20 million. The Cereal and Snacks business is a producer of allergen-free and healthy breakfast cereals and snacks and includes the Freedom Foods, Messy Monkeys, Heritage Mills and Barley+ brands. Three manufacturing facilities located at Leeton, Darlington Point (NSW) and Dandenong (Victoria) are included in the sale.

BAKED GOODS & PREPARED MEALS

Acquisitions announced

Date	Target Name	Acquirer
25 Mar 2020	Jewel Fine Foods	Coles
6 Mar 2020	Sunfresh Salads	HS Fresh Food Holdings
28 May 2020	Ready Chef & Pasta Master brands	Beak & Johnston
9 Sept 2020	Daly Potato Company	Pure Foods Tasmania
5 Oct 2020	The Kuisine Company	SPC Ardmona
26 Oct 2020	My Muscle Chef	Quadrant Private Equity

Coles acquired Jewel Fine Foods in March 2020 after receiving approval from the ACCC for the acquisition. Jewel Fine Foods was placed under voluntary administration in April 2019. The acquisition of Jewel Fine Foods is in line with Coles’ strategy to improve its convenience offering.

HS Fresh Food Holdings acquired the Adelaide-based Sunfresh Salads business. The shareholders of HS Fresh Food Holdings include Fortitude Investment Partners and the shareholders of the Houston’s Farm business.

Ready-made meal manufacturer Beak & Johnston expanded its brand portfolio by acquiring the Ready Chef and Pasta Master brands from General Mills. Beak & Johnston also entered into a license agreement to manufacture and distribute Latina-branded chilled ready meal products.

Daly Potato Company, a distributor of pre-packaged potato salads, mashed potato and cauliflower and broccoli in sauce was acquired by ASX-listed Pure Foods Tasmania. Pure Foods Tasmania paid $1.8 million in cash and shares for Daly Potato Company.

Quadrant Private Equity acquired a 50% shareholding in ready-made meal manufacturer, My Muscle Chef, for $100 million. My Muscle Chef was formed in 2013 by brothers Tushar and Nishant Menon. The business sells approximately 400,000 meals a week directly to health-conscious consumers and through independent and corporate retailers.

SPC Ardmona acquired a majority equity stake in frozen ready-made meal and finger foods manufacturer, The Kuisine Company. The Kuisine Company operates from a facility at Emu Planes, NSW and the acquisition by SPC includes three ready meal brands: The Good Meal Co, The Gluten Free Meal Co and Simply Special.

Listings on the ASX

Date	Entity name	Capital raised	Issue price	31 Dec 20 price
8 Dec 2020	YouFoodz Holdings	$70 million	$1.50	$1.04

YouFoodz Holdings, a manufacturer and distributor of fresh ready-made meals and other convenience products, listed on the ASX on 8 December 2020. YouFoodz raised $70 million as part of the offer. YouFoodz operates across three production facilities, makes approximately 350,000 ready-made meals per week and employs 460 people.

PACKAGED FOODS

Acquisitions announced

Date	Target Name	Acquirer
30 April 2020	PomLife	SPC Ardmona
6 Aug 2020	Buderim Ginger – ginger division	Himstedt family
20 Oct 2020	v2foods ($77 million capital raise)	Various investors
8 Dec 2020	KJ&Co Brands	SunRice Group / Riviana Foods

Fruit processor, SPC Ardmona acquired the PomLife brand from Australian Pomegranate Growers. The PomLife brand was developed by Australian Pomegranate Growers for distribution into the foodservice channel. SPC will integrate the pomegranate processing operation into its Shepparton plant and will include pomegranate-based products in its fruit portfolio.

Buderim Ginger sold the Company’s ginger and tourism business assets to the Himstedt family for a consideration of $13 million. The ginger division is Australia’s leading processor and vendor of confectionery ginger products. The assets sold include the Yandina-based Ginger Factory, associated ginger brands and business operations in Fiji.

v2foods, the plant-based meat manufacturer, raised $77 million from a series B funding round, introducing new investors into the business. Total capital raised by v2foods since inception amounts to $113 million. v2foods intends to use the funds raised to complete its production facility in Wodonga and scale operations to launch product into new markets, including Asia.

SunRice Group acquired 100% of KJ&Co Brands for $50 million. KJ&Co Brands is a branded food importer with brands including Toscano, Hart & Soul and Bare Bakers that will complement the existing brands of Riviana Food. The acquisition will significantly increase the scale of the Riviana Foods, a subsidiary of the SunRice Group. KJ&Co Brands reported gross revenue of $59 million in the financial year to 30 June 2020.

Listings on the ASX

Date	Entity name	Capital raised	Issue price	31 Dec 20 price
31 Aug 2020	Forbidden Foods	$6 million	$0.20	$0.28

Forbidden Foods raised $6 million from investors and listed on the ASX on 31 August 2020. Forbidden Foods was started in 2010 and has three primary brands: Forbidden, Sensory Mill and Funch.

SPORTS NUTRITION

Acquisitions announced

Date	Target Name	Acquirer
7 July 2020	ATP Science (minority stake)	Cortina Capital

Cortina Capital acquired a minority stake in ATP Science a manufacturer of natural health, sports and nutritional supplements that are distributed in Australia and the United States.

HEALTHY & NATURAL

Acquisitions announced

Date	Target Name	Acquirer
26 Feb 2020	Power Super Foods	Trade buyer

Darrell Lea sold the Power Super Foods business to a trade buyer. Comet Line Consulting advised Darrell Lea on the transaction.

Listings on the ASX

Date	Entity name	Capital raised	Issue price	31 Dec 20 price
30 Oct 2020	Nutritional Growth Solutions	$7 million	$0.20	$0.26

Nutritional Growth Solutions focuses on the development of nutritional supplements for children aged from 3 to 12-years of age. The company listed on the ASX on 30 October 2020 and raised $7 million through the offer.

NON-ALCOHOLIC BEVERAGES

Acquisitions announced

Date	Target Name	Acquirer
22 April 2020	APR ($5m capital raise)	Various investors
1 June 2020	JB’s Purified Drinking Water	Eneco Refresh Limited
26 Oct 2020	Coca Cola Amatil	Coca Cola European Partners

The largest public M&A transaction announced in 2020 is the offer from Coca Cola European Partners to acquire 69.3% of Coca Cola Amatil for a cash consideration of $12.75 a share. The remaining shares in Coca Cola Amatil are owned by The Coca Cola Group. The offer is valued at $9.3 billion, is structured as a Scheme of Arrangement and is subject to shareholder and court approval.

Australian Product Research (APR) raised $5 million from investors to fund the growth and expansion of Everlast Premium Waters and Everlast Sports Drinks in Australia.

VITAMINS, SUPPLEMENTS & NUTRACEUTICALS

Acquisitions announced

Date	Target Name	Acquirer
25 Aug 20	IsoWhey & Wheyless brands	Australian Health & Vitality
27 Oct 2020	Global Therapeutics	McPherson’s

Blackmores sold the IsoWhey and Wheyless brands to Australian Health & Vitality.

Blackmores also sold the Global Therapeutics business to McPherson’s for $27 million. The Global Therapeutics product portfolio comprises of traditional Chinese medicine in combination with contemporary herbal treatments and includes the Fusion Health and Oriental Botanicals brands.

ANIMAL FEED

Acquisitions announced

Date	Target Name	Acquirer
13 Aug 2020	Riverbanks Stockfeed’s dairy & beef business	SunRice / CopRice

CopRice, a subsidiary in the SunRice Group acquired the dairy and beef business of Riverbank Stockfeeds for $5 million. The acquisition includes a feed mill and a dairy business across Gippsland and south west Victoria.

FOODSERVICE DISTRIBUTION

Acquisitions announced

Date	Target Name	Acquirer
3 Jan 2020	Hudson Pacific Foodservice	Hudson Food Group
19 Aug 2020	PFD Food Service	Woolworths

Retail Food Group sold the Hudson Pacific Food Service and Associated Food Service businesses to Hudson Food Group for an undisclosed amount. Retail Food Group recognised impairment losses of $18.3 million (FY19) and $7.2 million (1HFY20) on the businesses sold to Hudson Food Group. Retail Food Group acquired the Hudson Pacific business in August 2016 for $88 million.

Woolworths announced the acquisition of a 65% shareholding in PFD Food Services and PFD’s freehold properties for a consideration of $552 million. The transaction valued the PFD property portfolio at $249 million and placed a value of $302 million on the 65% shareholding in PFD. The Woolworths acquisition valued PFD on an 11x multiple of FY20 EBITDA (before any adjustments for AASB16). The Smith family will retain a 35% shareholding and will be able to sell its remaining stake to Woolworths after three years under a put and call agreement. The transaction is subject to approval by the ACCC.

OTHERS

Transactions announced

Date	Target Name	Acquirer	Sector
26 May 2020	Thomas Foods potato business	Mitolo Family Farms	Fresh produce
14 May 2020	Regal Rogue	Intrepid Spirits	Alcoholic drinks
June 2020	Beemart Fruit & Veg	JE Tipper	Fruit and veg providore
3 June 2020	Kaddy ($3.5m capital raise)	Consortium of investors	B2B marketplace
9 June 2020	OZ Connect Traders	LJM Victoria	Co-packing
3 July 2020	Think Spirits	Amber Beverage Group	Alcoholic beverages
15 July 2020	Flavorite	ROC Partners	Fresh produce
28 Oct 2020	Strongbow, Little Green & Bonamy’s	Heineken	Alcoholic beverages
9 Nov 2020	Multipack-LJM	Probiotec	Contact packing
13 Nov 2020	Mexex	Atlantic Growth Capital	Wet manufacturing

Mitolo Family Farms acquired the fresh potato business of Thomas Foods International. Thomas Foods acquired the potato business in 2013 from the Modello Farms administrator. For Mitolo, the acquisition represented an opportunity to increase capacity and business continuity for packing and grading fresh produce in the Virginia region and the acquisition of additional farming and water assets.

Australian vermouth brand, Regal Rogue, sold a majority stake in the business to Irish drinks firm, Intrepid Spirits. The acquisition is the first major brand acquisition for Intrepid Spirits.

B2B alcoholic beverage marketplace Kaddy raised $3.5 million in funding from a consortium of investors. The funding will be used to enhance the platform capabilities and grow the footprint of the business. The capital raise was supported by KTM Ventures, SpringCapital and John Szangolies.

LJM Victoria, a co-packing business based in Dandenong, acquired OZ Connect Traders, a primary food contract packer based in Carrum Down, Victoria.

Amber Beverage Group acquired an additional 10% shareholding in Think Spirits to increase its ownership of Think Spirits to 100%. Thinks Spirits is a distributor of premium spirits brands such as Casamigos Tequila and Malfy Gin.

ROC Partners acquired an undisclosed shareholding in tomato grower, Flavorite Group. Flavorite Group is based in the Gippsland region and is the largest hydroponic grower of tomatoes in Victoria, supplying product to the east coast of Australia. Flavorite Group also supplies capsicums, cucumbers and blueberries.

Heineken acquired the Strongbow, Little Green and Bonamy’s cider brands and the perpetual licences for Stella Artois and Beck’s in Australia from Asahi Beverages. The transaction forms part of obligations Asahi have to fulfill under the ACCC’s approval of the acquisition of Carlton & United Breweries.

ASX-listed Probiotec acquired Multipack-LJM for a consideration of $52.5 million. Multipack-LJM is a leading contract packer, providing packing services for some of the world’s leading pharmaceutical, consumer healthcare, cosmetics and food and beverage companies.

Atlantic Growth Capital acquired Mexex, an Adelaide based producer of cheese sauces, salsas, marinades, baby foods and fruit & vegetable puree. Mexex services the industrial, foodservice, QSR, retail and export channels. Mexex is the second acquisition made by Atlantic Growth Capital as part of its food and beverage platform.

Welcome to the Comet Line quarterly newsletter where we review corporate activity over the third quarter of 2020.

Corporate activity in the third quarter of 2020 was still impacted by the outbreak of coronavirus and the containment measures implemented by the Australian and New Zealand governments. Comet Line did observe an uplift in investor sentiment and acquisition interest for businesses in the food and beverage industry towards the end of the third quarter.

Ten transactions were announced in the quarter. The standout transaction was the proposed acquisition of a 65% shareholding in PFD Food Services by Woolworths. Following completion of the transaction, PFD Food Services will continue to be managed by the Smith family, with Woolworths looking to unlock synergies for both businesses across the combined network and vehicle fleet. The transaction is subject to approval by the ACCC and could be the first step in the consolidation of the highly fragmented foodservice distribution industry.

The third quarter also witnessed the initial public offering of Forbidden Foods on the ASX. Forbidden Foods raised $6 million from investors and listed on the ASX on 31 August 2020.

The outlook for the food and beverage industry is considered to be more positive at the end of the third quarter compared to the end of the second quarter. The gradual relaxation of lockdown restrictions in Melbourne and the continued support for the industry by the Australian government will support investor interest in the food and beverage industry. Corporate activity in the industry will depend on the pace of economic recovery in Australia and New Zealand.

Transactions announced

Date	Target Name	Acquirer	Sector
1 Jul 20	Canon Foods	Hellers	Poultry
3 Jul 20	Think Spirits	Amber Beverage Group	Alcoholic beverages
15 Jul 20	Flavorite	ROC Partners	Fresh produce
6 Aug 20	Buderim Ginger – ginger division	Himstedt family	Packaged food
17 Aug 20	Marsh Dairy Products	Extra Mile Foods	Dairy
19 Aug 20	PFD Food Service	Woolworths	Foodservice distribution
25 Aug 20	IsoWhey & Wheyless brands	Australian Health & Vitality	Nutrition & wellness
9 Sept 20	Daly Potato Company	Pure Foods Tasmania	Prepared meals
11 Sept 20	Dairy Country	Fonterra	Dairy
18 Sept 20	Organic Dairy Farmers of Australia	Remarkable Milk Company	Dairy

Hellers acquired Perth-based Cannon Foods. Canon Foods operates a chicken processing facility from a site based in Jandakot WA. Canon Foods produces the well-known Chevups brand of skinless pure beef sausages and the Get Vegged vegetarian range. Hellers is owned by Adamantam Capital.

Amber Beverage Group acquired an additional 10% shareholding in Think Spirits to increase its ownership of Think Spirits to 100%. Thinks Spirits is a distributor of premium spirits brands such as Casamigos tequila and Malfy Gin.

ROC Partners acquired an undisclosed shareholding in tomato grower, Flavorite Group. Flavorite Group is based in the Gippsland region and is the largest hydroponic grower of tomatoes in Victoria, supplying product to the east coast of Australia. Flavorite Group also supplies capsicums, cucumbers and blueberries.

Buderim Ginger sold the Company’s ginger and tourism business assets to the Himstedt family for a consideration of $13 million. The assets sold include the Yandina-based Ginger Factory, associated ginger brands and the business operations in Fiji.

Extra Mile Food Trading acquired Marsh Dairy Products for an undisclosed consideration. Marsh Dairy Products supplies bulk dairy ingredients including cheeses, butters and milk powders and honey to the retail and foodservice channels. Marsh Dairy Products operates from a facility based in Footscray, Victoria. Extra Mile Food Trading is a wholesaler and distributor of premium food and beverage products to the foodservice and industrial channels.

Woolworths announced the acquisition of a 65% shareholding in PFD Food Services and PFD’s freehold properties for a consideration of $552 million. The transaction valued the PFD property portfolio at $249 million and placed a value $302 million on the 65% shareholding in PFD. The Woolworths acquisition valued PFD on an 11x multiple of PFD FY20 EBITDA (before any adjustments for AASB16). The Smith family will retain a 35% shareholding and will be able to sell its remaining stake to Woolworths after three years under a put and call agreement. The transaction is subject to approval by the ACCC.

Blackmores sold the IsoWhey and Wheyless brands to Australian Health & Vitality.

Daly Potato Company, a distributor of pre-packaged potato salads, mashed potato and cauliflower and broccoli in sauce was acquired by ASX-listed Pure Foods Tasmania. Pure Foods Tasmania paid $1.8 million in cash and shares for Daly Potato Company.

Fonterra acquired Melbourne-based secondary cheese-processing company Dairy Country from Retail Food Group for $19.23 million. Dairy Country has before the acquisition provided shredding and grating services for Fonterra’s retail cheese products, The transaction facilitates Retail Food Group’s exit from its foodservice and manufacturing pursuits, enabling a focus on its core retail food franchising and coffee business.

The Remarkable Milk Company acquired the assets of Organic Dairy Farmers of Australia. Organic Dairy Farmers of Australia was placed in receivership in May 2020. The acquisition includes the land, processing facility and all brands and trademarks.

Listings on the ASX

Forbidden Foods, a manufacturer of plant-based foods raised $6 million from investors and listed on the ASX on 31 August 2020. Forbidden Foods manufactures plant-based organic food, healthy snacks, baby food and industrial food service/food manufacturing markets. Forbidden Foods was started in 2010 and has three primary brands: Forbidden, Sensory Mill and Funch.

Welcome to the Comet Line quarterly newsletter where we review corporate activity in the second quarter of 2020.

Corporate activity was significantly impacted by the outbreak of coronavirus and the containment measures implemented by the Australian and New Zealand governments. The impact on businesses in the food and beverage industry have varied based on the channels served.

Suppliers and distributors to the foodservice channel were significantly impacted by the closure of foodservice establishments. In Australia restrictions on restaurants and cafes a phased lifting of restrictions started in mid-May 2020, with a significant lifting of restrictions from 1 June 2020. In New Zealand, social distancing restrictions were lifted on 8 June. The phased lifting of restrictions appears to have had the desired effect. Foodservice distributor Bidfood reported weekly sales in the week of 19 April 2020 to bottom out at 35% for the same period in the prior year. Following the lifting of restrictions, weekly sales recovered to 83% of the prior year level for the week ended 14 June 2020.

The impact on suppliers to the retail channel have varied based on the categories supplied. The consumer demand dynamics are changing as consumers adjust to financial uncertainty.

Thirteen transactions were announced in the second quarter of 2020. The transactions announced include ten business disposals and three capital raise transactions. Comet Line expects more capital raise transactions for the third quarter as trading volumes increase and businesses look to shore up balance sheets impacted by the shutdown period.

The outlook for corporate activity depends to a large extend on the pace of economic recovery in Australia and New Zealand.

Transactions Announced

Date	Target Name	Acquirer	Sector
6 March 2020	Sunfresh Salads	HS Fresh Food Holdings	Prepared salads
6 April 2020	Clean Seas Seafood (9.7%)	Hofseth Group	Seafood
22 April 2020	APR Ltd ($5m capital raise)	Various investors	Non-alcoholic beverages
30 April 2020	PomLife	SPC	Packaged Foods
5 May 2020	Ausfec barline assets	Keytone Dairy	Healthy snacking
14 May 2020	Regal Rogue	Intrepid Spirits	Alcoholic drinks
26 May 2020	Thomas Foods potato business	Mitolo Family Farms	Fresh produce
28 May 2020	Frew International (50%)	Thomas Foods International	Meat processing
28 May 2020	GKC Foods	Barry Callebaut	Confectionery
28 May 2020	Ready Chef & Pasta Master brands	Beak & Johnston	Ready meals
3 June 2020	Kaddy ($3.5m capital raise)	Consortium of investors	B2B marketplace
9 June 2020	OZ Connect Traders	LJM Victoria	Co-packing
11 June 2020	Beston Global Food’s dairy farms	Aurora Dairies	Dairy

HS Fresh Food Holdings acquired the Adelaide-based Sunfresh Salads business. The shareholders of HS Fresh Food Holdings include Fortitude Investment Partners and the shareholders of the Houston’s Farm business.

Hofseth Group, a Norwegian biomarine company, invested $5 million in ASX-listed Clean Seas Seafood. The investment by Hofseth will result in a 9.7% shareholding in Clean Seas Seafood.

Australian Product Research raised $5 million from investors to fund the growth and expansion of Everlast Premium Waters and Everlast Sports Drinks in Australia.

Fruit processor, SPC acquired the PomLife brand from Australian Pomegranate Growers. The PomLife brand was developed by Australian Pomegranate Growers for distribution into the foodservice channel. SPC will integrate the pomegranate processing operation into its Shepparton plant and will include pomegranate-based products into its fruit portfolio.

ASX-listed Keytone Dairy acquired the manufacturing assets of AusConfec for $2.25 million. The assets acquired include equipment for the manufacture of protein bars. Keytone Dairy raised $12.5 million through a share placement to fund the acquisition and future expansion opportunities.

Australian vermouth brand, Regal Rogue, sold a majority stake in the business to Irish drinks firm, Intrepid Spirits. The acquisition is the first major brand acquisition for Intrepid Spirits.

Mitolo Family Farms acquired the fresh potato business of Thomas Foods International. Thomas Foods acquired the potato business in 2013 from the Modello Farms administrator.

Thomas Food International also acquired a 50% stake in Frew International. Frew operates a meat processing facility in Stawell, Victoria. The facility has daily capacity to process more than 6,000 lamb, sheep and goat.

Barry Callebaut Group acquired Victoria-based B2B industrial chocolate manufacturer, GKC Foods. GKC Foods produces chocolate, coatings and fillings for consumer chocolate brands. Barry Callebaut has 10 chocolate and cocoa factories across Asia. The acquisition of GKC Foods will provide Barry Callebaut with a manufacturing presence in Australia.

Ready meals manufacturer Beak & Johnston expanded its brand portfolio by acquiring the Ready Chef and Pasta Master brands from General Mills. Beak & Johnston also entered into a license agreement to manufacture and distribute Latina-branded chilled ready meal products.

B2B alcoholic beverage marketplace Kaddy raised $3.5 million in funding from a consortium of investors. The funding will be used to enhance the platform capabilities and grow the footprint of the business. The capital raise was supported by KTM Ventures, SpringCapital and John Szangolies.

LJM Victoria, a co-packing business based in Dandenong, acquired OZ Connect Traders, a primary food contract packer based in Carrum Down, Victoria.

ASX-listed Beston Global Food Company sold its dairy farm interests in the Mount Gambier region including water licenses and operating assets for $40.4 million. Beston Global Food Company will use the proceeds from the sale to reduce debt and focus on the expansion of its mozzarella and dairy nutraceuticals production lines. The transaction is expected to be completed by 30 September 2020.

Atlantic Growth Capital acquired 100% of Tasty Spices in Melbourne in December 2019. Atlantic’s intent is to help grow the business further, hiring Primo Foods veteran Ken Keyser as food group CEO and Sean La Faber as general manager sales. The vendors are remaining with the business for an agreed time to ensure a smooth transition to new ownership.

Listings on the ASX

There were no listings of food and beverages companies on the ASX during the second quarter of 2020.

Welcome to the Comet Line quarterly newsletter, where we review corporate activity in the first quarter of 2020.

Corporate activity was significantly impacted by the outbreak of coronavirus and the containment measures implemented by the Australian and New Zealand governments. The impact on businesses in the food and beverage industry have varied based on the channels served.

Suppliers and distributors to the foodservice channel were significantly impacted after the closure of clubs, licensed premises in hotels and pubs, casinos and night clubs. Restaurants and cafes can offer takeaways and delivery only.

The impact on suppliers to the retail channel have varied based on the categories supplied. Some suppliers to retail have experienced a spike in demand during a period of increased consumer demand witnessed in late February / March. Anecdotally, we understand that shorter shelf life categories have traded flat or experienced a reduction in demand in retail compared to longer shelf life categories. The consumer demand dynamics are changing as consumers adjust to financial uncertainty.

Most of the transactions in the quarter were announced before the closure of foodservice outlets were announced. The first quarter of a calendar year is normally the lowest period of corporate activity. In the first quarter of 2020 only four transactions were announced. In comparison, eleven transactions were announced in the first quarter of 2019.

Comet Line is committed to working with business owners in the food and beverage industry to provide advice and assistance during this period of uncertainty. We are currently working with several business owners on strategies to trade through this period. Where appropriate we are assisting business owners to consider different sources of finance to stabilise the capital position of businesses impacted by the coronavirus pandemic.

Acquisitions Announced

Date	Target Name	Acquirer	Sector
17 Dec 19	Freshmax domestic fresh produce division	T&G Global	Fresh produce
23 Dec 19	Soulfresh ($50m investment)	True	Healthy and Natural
3 Jan 20	Hudson Pacific Foodservice	Hudson Food Group	Foodservice distribution
30 Jan 20	Petuna Aquaculture (50%)	Sealord Group	Seafood
2 Mar 20	Dennington Milk Plant	ProviCo	Dairy
25 Mar 20	Jewel Fine Foods	Coles	Prepared meals

T&G Global (formerly Turners & Growers), one of the largest fresh produce companies in New Zealand, acquired the fresh produce division of Freshmax NZ for $30 million. The acquisition will strengthen T&G Global’s fresh produce business in New Zealand.

Soulfresh, a plant-based food and beverage business based in Melbourne, received a £26 million (A$50 million) investment from True. True is a UK-based retail and consumer sector investment specialist with funds under management of £200m. In addition, Robert Soros, the son of George Soros committed additional capital to Soulfresh to take the total investment in the business to just over A$50 million. The capital raised would be used to grow the international operations of Soulfresh.

Retail Food Group disposed of the Hudson Pacific Food Service and Associated Food Service businesses to Hudson Food Group. Retail Food Group recognised impairment losses of $18.3 million (FY19) and $7.2 million (1HFY20) on the Manufacturing and Distribution division sold to Hudson Food Group. Retail Food Group acquired the Hudson Pacific business in August 2016 for $88 million settled through the issue of shares in Retail Food Group and a cash consideration.

New Zealand based Sealord Group acquired the remaining 50% shareholding in Petuna Aquaculture from the Rockliff family. Petuna Aquaculture was founded in the early 1990s and farms ocean trout and Tasmanian Atlantic salmon. Sealord acquired 50% of Petuna Aquaculture in 2010 and will become a wholly owned subsidiary of Sealord Group after the latest transaction.

Fonterra sold the Dennington Processing plant to ProviCo Australia. Fonterra closed the Dennington plant in May 2019 after a reduction in milk intake. ProviCo Australia is the largest supplier of calf milk replacers, manufacturing a range of feed and vitamin fortified products for animals. ProviCo will use the Dennington site to manufacture a range of animal nutrition foods.

Coles announced the acquisition of Jewel Fine Foods after receiving approval for the acquisition from the ACCC. Jewel Fine Foods was placed under voluntary administration in April 2019. In September 2019 B&J City Kitchen submitted an offer to acquire Jewel Fine Foods, but this offer was blocked by the ACCC. The ACCC believed that an acquisition of Jewel Fine Foods by B&J City Kitchen would substantially lessen competition for the supply of chilled ready meals. Coles is the largest customer of Jewel Fine Foods. The acquisition of Jewel Fine Foods is in line with Coles’ strategy to improve its convenience offering.

Health food company Oliver’s Real Food received a takeover offer priced at $0.10 per share, valuing the equity of the company at $27 million. Shortly after receipt of the takeover offer, Oliver’s announced that it would suspend trading at all the company’s locations. The store closures are in response to the COVID19 outbreak and restrictions on travel in Australia. The impact of the store closures on the takeover offer is unclear.

Listings on the ASX

There were no listings of food and beverages companies on the ASX during the first quarter of 2020.