Synlait has announced the conditional purchase of New Zealand branded dairy products company Dairyworks for $112 million, subject to Overseas Investment Office approval.

This is said to be reflective of an approximate 7.5 x EBITDA multiple based on the last twelve months earnings.

The acquisition of Dairyworks will, says Synlait, provide it with another meaningful move towards the delivery of its Everyday Dairy strategy and complements the company’s recent acquisition of cheese manufacturer Talbot Forest.

Synlait CEO Leon Clement said: “This is an exciting opportunity for Synlait. This business is a great strategic fit for us and an important step in growing our presence in the Everyday Dairy category. Dairyworks is a nimble and innovative company. It will fit well with Synlait and provides us with an opportunity to keep optimising our value chain while giving access into Australia wher Dairyworks presence is growing. Opportunities exist in both businesses to streamline supply chains and enhance our competitiveness. It gives us the ability to optimise how we process milk solids and get the most value from our supply of milk. We’re excited by this opportunity as we work to capture more value in the dairy market in New Zealand and globally.”

Dairyworks will operate as a stand-alone business under the Synlait umbrella.

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