South Australian dairy business, Beston Global Food Company (BGF), is expecting a binding offer to acquire the business by 9 September. BGF went into a trading halt on 1 July as it sought to resolve its funding arrangements. It extended the suspension at the beginning of August, saying the resumption of trading would be materially prejudicial to its ongoing discussions.
BGF is South Australia’s largest dairy company, employing more than 300 people. It's the seventh largest in Australia. At the end of FY23, the company shifted its focus, from becoming a food and beverage manufacturer to growing the profitability of its value-add dairy and dairy nutraceuticals business. It announced its intention to close and sell three businesses: Provincial Food Group, Aqua-Essence, and Beston Technology.
Its 1H24 results were heavily impacted by higher-than-expected milk flows at historically high prices. The seven million litres above forecast put “inordinate pressure on working capital” and payments to farmers of around $38 million.
In July, BFG sold the business and property assets of its meat processing subsidiary, Provincial Food Group, for $4 million. It was acquired by a Victorian-based private consortium of six parties, made up of trusts and a superannuation fund, led by Milne Bay, with a background in the meat processing industry. Aqua-Essence was sold in November 2023 to a minority partner.
On 16 August, BFG told the market it had received several non-binding indicative offers around debt refinancing and equity solutions for its core dairy and dairy nutrition business.
"Discussions and due diligence have now progressed with a major international dairy company which has a specialisation in dairy nutraceuticals and functional ingredients and is a globally recognised leader in this field.
"Beston has been advised that a binding proposal in relation to a commercial arrangement with the company will be received on or before 9 September 2024," it said.
