Pacific Equity Partners (PEP) has announced plans to fork out $190 million for baked goods manufacturer Allied Mills and integrate it into its Pinnacle bakery and ingredients business.
Allied Mills, a joint venture of GrainCorp and Cargill, is Australia’s leading manufacturer of flour, bakery premixes and specialty frozen par-baked bread products. It has 15 manufacturing sites and distribution centres across Australia and New Zealand and employs around 850 people.
The company buys and processes around 800,000 tonnes of wheat and specialty grains including maize, rye, triticale, organic hard, soft and noodle wheats every year.
Pinnacle, which PEP acquired in 2015 from global ingredients company Kerry, operates in the sweet bakery products and bakery ingredients market, manufacturing and distributing finished and unbaked goods such as cakes, pastries, cookies, muffins and doughnuts, as well as bakery ingredients such as fillings and fondants.
Last year, PEP also acquired Patties Foods, the maker of frozen bakery brands such as Nanna's and Four 'N Twenty pies.
Allied Mills managing director Joseph Di Leo said: “Our combination with Pinnacle will offer customers a one-stop-shop across bread and sweet bakery products.
“It’s an exciting time for the sector and with PEP committed to investing in the combined company’s strategic assets, there is very solid growth potential.”
Pinnacle CEO, James Ajaka said: “Since acquiring Pinnacle, PEP has substantially increased investment in both R&D and manufacturing capability and demonstrated an unwavering focus on delivering great results for our customers.
“The combination of Pinnacle and Allied Mills offers a unique opportunity to generate value through category-leading innovation and technology solutions while embedding a world-class supply chain which can service more customers, more often.”
PEP managing director, Tony Duthie said: “This is rare combination of complementary businesses operating in truly adjacent categories. PEP has a proven track record of investing in consumer product businesses and we intend to invest significantly to grow and support the integrated business.”
The transaction is expected to close within two to three months.
