Waterford-based Dawn Meats has completed its acquisition of a majority stake in New Zealand-based meat processor Alliance Group.
Dawn Meats will pay $270 million New Zealand dollars (€133.4 million) to acquire a 65 per cent shareholding in Alliance, with farmer-shareholders retaining a 35 per cent stake in the business.
With the transaction now settled, approximately NZ$188 million of the investment proceeds will be applied to reduce Alliance’s short-term working capital facility and NZ$20 million will be invested in the company’s strategic capital programme to lift performance.
Farmer-shareholders will also benefit from a distribution of up to NZ$20 million in the current financial year and up to NZ$20 million in the next financial year.
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Some 45 per cent will be paid as a dividend this year and 55 per cent as a supply-based rebate. Next year, 75 per cent will be paid as a rebate and 25 per cent retained as earnings.
In addition, up to NZ$26 million will be distributed as a special dividend from the joint venture to the new Alliance Investment Co-operative following a stronger than forecast year-end result for Alliance.
Dawn Meats chief executive Niall Browne said the deal would unlock “new and exciting opportunities” for both companies and its farmer-suppliers in New Zealand, Ireland and Britain.
“This investment expands our business significantly and positions us, our UK company Dunbia and Alliance Group as a unified and dynamic industry competitor with a substantial presence and customer base in both the Northern and Southern hemispheres,” he said.
“We are intent on ensuring we can maximise our new combined strength to provide existing and new customers with a year-round supply of sustainable and world class, grass-fed red meat.
“Dawn Meats will now work closely with Alliance and its farmer-shareholders to identify and invest in capital expenditure upgrades, new technology and new sustainable business practices that will support the company’s future growth and development.”
He described Alliance as a leading New Zealand business with a “proud legacy of cutting-edge processing and history of exporting the highest-quality grass-fed lamb, beef and venison”.
Willie Wiese, chief executive of Alliance Group, said the completion of the transaction was an essential milestone.
“We can move from planning to implementation with a partner that brings scale, global reach and expertise that clearly creates a competitive advantage,” he said.
“This investment provides the capital we need to strengthen our balance sheet, accelerate value growth initiatives and further enable the delivery of our strategic objectives.”
