Keytone Dairy milks Omniblend for $22.6m

New Zealand based dairy manufacturer Keytone Dairy will acquire Omniblend for $22.6 million, with the potential for an additional $30 million, subject to Omniblend's performance milestones achievements.

The acquisition provides Keytone with an opportunity to expand its manufacturing capacity, product diversification and increase customer reach across the ANZ region, as well as into China.

Founded in 2008, Omniblend is an Australian-based contract manufacturer of formulated, blended powder products and long-life UHT drinks, specialising in the health and wellness sector. It operates across four sites in Victoria and has a number of major contracted manufacturing customers, including Bellamy's Organic, Top Juice and Carman's.

Keytone has proposed to raise up to $18 million for its conditional placement and share purchase plan, with stockbrokers Bell Potter Securities and Peloton Capital leading the deal.

In its Strategic Acquisition of Omniblend & Capital Raising report, Keytone states it was awarded a contract by Walmart China Investment Co. on 30 May 2019, to contract manufacture milk powder for Sam’s Club West, Inc. (China), a wholly owned subsidiary of Walmart Inc.

Keytone Dairy says the acquisition will help to “capitalise on New Zealand’s global ‘clean, green and pristine’ reputation” and is building a second facility in New Zealand, increasing capacity 3,500tpa on current operations, to 5,000tpa.