Newsletter – April 2017

Thursday, 6th April 2017

M&A Partners ­ Newsletter


April 2017


With the June 2017 year end fast approaching, M&A Partners wish to update you on our activities,  as  well  as  share with you some  insights into the Health & Wellness and Organic segments of the consumer goods market following some of our recent transactions.

Current M&A Partners Activity in the Australian/NZ Food Sector

We have recently completed the sale of Kadac Pty Ltd on behalf of the Besen Family  and other founding shareholders, to a major multi­national group. The sale followed a three month bid process with the business keenly sought by local private investors and trade buyers. Kadac is Australia’s largest distributor of organic,  health  &  wellness products. The China based buyer see’s  significant opportunity for growth in the business domestically and throughout  Asia.

Kadac logo 2

The sale of Kadac followed on from  the successful sale of  NY Bagels to Pinnacle Foods (a division of Pacific Equity Partners (PEP)) and the sale of Fleming’s NZ snack bar business (a division of PepsiCo) to ProLife Foods in NZ. We acted in both instances for the vendors and ran a competitive  sale process.

NY Bagels  Pepsico 5

We have recently been engaged by a ‘ready to eat meal’ company that is seeking capital to  accelerate  growth.  The business is experiencing considerable demand for its product across independent channels, whilst currently being trialled in the majors. We expect an IM  will  be  available  within the next month

Core Power Foods logo

There is currently significant activity in the at home/pre­prepared meals segment as innovative new business models emerge,  challenging a distribution network which has been largely unchanged for 60 years. Increasing health consciousness among time poor  consumers is driving the push for convenient, nutritious and cost effective meals to become available via a number of non­conventional  distribution channels. Chilled ready meals continue to increase it’s market share in the ready meals segment and is forecast to grow at  8.1% CAGR through to 2021.

Ready made meals charts

We see a number of trends emerging in the FMCG sector including:

  • The health & wellness food category is performing strongly with organic packaged foods growing at 14% CAGR – almost 6 times  the growth of general categories
  • Increasing demand and consumer interest in functional drinks. Examples include Remedy Kombucha, Shine+ and  Kreolsparkling
  • Increasing demand for imported innovative healthy snacks from around the world e.g. Simply 7 and Calbee  Increasing demand for pre­packed and ready to eat meals e.g. YouFoodz and  Fivepointfour
  • Disruption in conventional meal distribution channels with B2C and non­conventional retailing growing rapidly e.g. Hello Fresh,  Marley Spoon and Pepper Leaf
  • Increasing pricing spreads between best value and best quality (premium)  products
  • Excitement and uncertainty in regards to new international entrants such a Lidl and Amazon  Fresh


During our engagement with Kadac we have seen first­hand the strong consumer demand for Health & Wellness and Organic  products and researched the characteristics of over 50 leading brands in the  sector.

With revenues of over $15b at retail, the Australian Health & Wellness food & beverage market will continue to grow in importance  over the next 5 – 10 years as consumers increasingly seek healthy, safe and innovative products. The highest growth categories in  Health & Wellness market are Organic and Food Intolerance products with last three­year CAGR’s of 14.1% and 20.8% respectively.

Health and wellness chart

International Activity

In the US we have recently seen major FMCG drinks businesses enter the functional drinks segment via mergers and acquisitions.  The factors driving this thematic are the taxes on sugary drinks and consumer behaviour away from artificially flavoured or sweetened  drinks. Recent acquisitions in the US (indicative of some opportunities in Australia for niche drinks   companies) include:

  • Pepsico  acquires  Kevita  (November  2016)  –  Pepsico  agrees   to  fully  acquire  sparkling  probiotic  drink   maker  KeVita for ~USD$200m
  • Coca­Cola acquires Ades (June 2016) – Coca­Cola acquired Ades, the second largest global maker of soy­based beverages from  Unilever for ~USD$575m
  • Coca­Cola takes minority investment in Suja (August 2015) – Coca­Cola has taken a minority 30% investment in one of the  US’s leading organic, cold pressed juice brands, Suja for ~USD$90m
  • Jusu Bars acquires Cru Juice (September 2016) – Jusu Bars acquired Cru Juice which blends and bottles raw and cold­pressed  juices for an undisclosed amount
  • Country Pure Foods acquires The Ridgefield’s Brand (June 2016) – Country Pure Foods acquired fruit juice producer The  Ridgefield’s brand.


M&A Partners actively work with Australian food and beverage businesses to raise capital and seek exit strategies for their  businesses. The demand from major FMCG businesses to acquire fast growing and innovative businesses, particularly in the  Health & Wellness and Organic categories is presenting opportunities for owners to achieve attractive valuations for capital  raising and high exit multiples.

Please contact Antony Lynch, Paul Nemets or Alan Dassie if you would like to talk confidentially about your business or its growth &  funding options.


Lynch sign off

M&A photo

Antony Lynch  Director

m: 0419 919 722


Paul Nemets  Associate

m: 0432 815 362


Alan Dassie  Analyst

m: 0423 612 603