New Zealand private equity firm South Island Office has bought the ANZ operations of Sara Lee from McCain Foods. McCain announced in October 2020 it was looking to sell the business.
SIO bought New Zealand bakery business Original Foods Baking Co. for $30 million in 2020. It was the first move by the company into the food sector.
SIO director Tom Elworthy told Food & Drink Business: “We are very happy with the two businesses and focussing on maximising the opportunities to grow both, together.”
The deal was prompted after SIO spotted media reports of McCain looking to sell the business. “After very early discussions with Rothschild, it became apparent that it was a natural fit for us,” Elworthy said.
SIO said the acquisitions will bring together two successful brands into the region’s leading frozen desserts and bakery treats business.
Sara Lee recorded $96 million in sales in FY20 and more than $15 million in earnings before interest, tax, depreciation, and amortisation (EBITDA). Baked goods accounted for 31 per cent of sales and ice creams 17 per cent. Sara Lee held 53 per cent of the frozen dessert market in ANZ.
McCain started moves to separate the business in 2019 with the appointment of general manager Mark Mackaness to build the business’s standalone capabilities.
Mackaness is an equity partner and group CEO as part of the SIO acquisition. Sara Lee’s leadership team will also be staying with the business. Elworthy said Sara Lee would remain at Lisarow, “where we have a world class two-hectare production facility”.
Mackaness said Sara Lee and Original Foods Baking Co were complementary. “Original Foods Baking Co. is already branching out to Australia and beyond with its range of brownies, slices, bites and more. At Sara Lee, we have built an iconic Australian bakery brand, and our quality ice cream, cheesecakes, apple pies, danishes and puddings have been a household favourite in Australia and New Zealand for fifty years.”
“This partnership allows both businesses to gain exposure to new channels and markets as we have different strengths in retail and foodservice in Australia and New Zealand,” he said.
While the two will be run independently SIO will look for opportunities for the companies to partner on NPD.
Mackaness said that under the terms of the sale, all current Lisarow-based Sara Lee employees will remain with the business.
