Synlait Milk to buy Dairyworks for $112m

Synlait Milk, 39 per cent-owned by China’s Bright Dairy, said it planned to buy Christchurch-based cheese supplier Dairyworks for $112 million, subject to Overseas Investment Office approval.

The price reflected 7.5 times Dairyworks’ earnings before interest, tax, deprecation and amortisation over the past 12 months, Synlait said.

“The acquisition of Dairyworks will provide Synlait with another meaningful move towards the delivery of our everyday dairy strategy and complements the company’s recent acquisition of cheese manufacturer Talbot Forest,” Synlait said.

Synlait chief executive Leon Clement said the business was “a great strategic fit” and an important step in growing its 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 where Dairyworks presence is growing,” he said.

Dairyworks will operate as a stand-alone business under the Synlait umbrella, with its chief executive Tim Carter, reporting to Clement.

The company was established in 2001 in South Canterbury and is one of the larger companies in New Zealand’s everyday dairy category, supplying New Zealand with almost half its cheese.