Australian Lamb Company expands its global footprint with sale to Minerva Foods Australia

This is a story about how PricewaterhouseCoopers Corporate Finance (“PricewaterhouseCoopers Securities Ltd”) acted as advisor to Australian Lamb Company in a sale that positions it for significant growth and expansion in international markets.

Australian Lamb Company (ALC) is the largest lamb processor in Australia with a strong domestic customer base, including Australia’s largest supermarket chain (Coles), and exports 80% of its products to over 70 countries worldwide. With two processing plants in the state of Victoria, ALC currently processes in the capacity of 75,500 lambs per week (approximately 3.8m per year).

The company has consistently achieved strong financial results as well as a market leading reputation as a best-in-class operator with state-of-the-art processing facilities, consistently superior quality products, and ethical and safe practices in relation to food safety, animal welfare and sustainability.

With the global consumption of sheepmeat projected to increase by 14% by 2030 and with its historical performance, international reputation, strong workforce (approximately 900 staff) and highly experienced management team, ALC was ready to embark on its next phase of growth and to capitalise on the growing demand from export markets for prime Australian lamb.

PwC Corporate Finance was appointed as exclusive financial advisor for the divestment of Australian Lamb Company. PwC’s differentiated offering integrated deep experience in Mergers & Acquisitions (M&A), Financial Due Diligence, Value Creation, Legal, and Environmental, Social and Governance Due Diligence (ESG). This mix was critical to understanding and representing a business of this scale in this sector.

The team ran a highly competitive process, leveraging their knowledge and deep experience to identify and approach the right strategic parties from across the globe and would be willing to pay a premium for the company’s scale, quality and export licences. In parallel, the team executed a targeted strategy to work with key customers to manage critical change of control consents.

In addition, the team prepared an ESG vendor due diligence report by first building an understanding of the business’s entire value chain from sourcing and processing to sales, marketing, and distribution. Then, having completed a thorough value chain analysis, the PwC team was able to identify ESG areas such as food safety and quality, animal welfare and biodiversity that were material considerations in terms of sustainable value creation and preservation.

After a comprehensive search and competitive process Minerva Foods Australia (MFA), a joint venture between South American based Minerva S.A. and Saudi Arabian based SALIC, was chosen as the successful bidder. ALC continues as part of a multinational protein player and management shareholders will continue to be involved in driving further expansion in the business.

The combination of ALC and MFA uniquely complements the businesses' current operations, as it will improve penetration in niche markets and expand ALC’s portfolio of products with greater added value. ALC will allow MFA to execute their strategic direction, as it maximises commercial opportunities, operational synergies, reducing risks and contributing to the consolidation strategy in the animal protein export market.

The acquisition means that the ALC business now continues as part of a multinational protein player and management shareholders will continue to be involved in driving further expansion in the business.

As the deal progressed, it became apparent to our client and the entire deal team that sustainability was one of the top agenda items for potential bidders. ALC’s upfront investment in an ESG vendor due diligence was highly valuable in addressing bidder's questions about the company's sustainability related performance. As a result, the ALC team was rewarded with a more streamlined and time efficient deal process.

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