SPC Global gains ASX foothold in $342m merger with Original Juice Co and Nature One Dairy

Original Juice Company, which is currently valued at $53 million on the ASX, has announced separate purchase agreements with SPC Global, which was formerly known as SPC Ardmona, and Nature One Dairy in a move it says delivers “increased scale, diversification, significant operational synergies and a platform for further growth”.

The deal will give SPC Global a 69.2 per cent stake in the merged entity and create a business with revenue of more than $400 million and EBITDA of more than $29 million in FY25.

SPC chairman Hussein Rifai and SPC managing director Robert Iervasi will become chairman and global managing director respectively of the merged group.

The acquisition values SPC Global – one of Australia’s largest producers of packaged fruit, tomato-based products, baked beans, spaghetti and ready-made meals – at almost $240 million.

This is a significant premium to the $40 million paid for the business by the Shepparton Partners Collective in 2019 when it bought the business from Coca-Cola Amatil.

Under the agreement, Original Juice Company plans to undertake a one-for-10 share consolidation which at the last trading price of 18c per share will value the new shares at $1.80.

The Melbourne-headquartered SPC Global is being issued 133 million new shares, which at $1.80 per share values SPC at $239.4 million.

Original Juice Company is paying $50 million for Nature One Dairy (NOD) which comprises $44 million in shares at $1.50 each and $6 million in cash.

Following the merger, The Original Juice Company’s existing shareholders will own 15.5 per cent of the merged entity and Nature One shareholders will hold 15.3 per cent, with SPC Global the balance.

The deal remains subject to Original Juice Company shareholder approval at a meeting to be held in November.

Jeff Kennett will retire as  The Original Juice Company's chairman once the deal is finalised after two years in the role.

“The agriculture industry is a core pillar of our national identity in Australia and the backbone of many regional towns across the country,” says Kennett.

“We should be supporting businesses like OJC, SPC and NOD to continue to thrive in their mission to support local growers, employ Australians in our processing plants and produce iconic healthy products for consumers, both in Australia and abroad. I am excited about the prospects of the combined business.”

Since SPC was sold by Coca-Cola Amatil (CCA) in 2019, The Original Juice Company notes that it has “significantly streamlined operations and leveraged the existing successful SPC products to expand the go-to market opportunity”.

Rifai, the SPC chairman, says the merger aligns with a long-term vision to transform SPC into “a global leader in the food and beverage sector”.

"Since acquiring SPC from CCA, our strategy has been to firmly establish ourselves as a leader in both the Australian and global markets. Building a strong foundation in our home market is vital for sustainable growth and success," he says.

"Our immediate focus is on solidifying SPC’s position as a domestic market leader. This is the essential first step before executing our broader global strategy, which targets key international markets, particularly in Asia, where we see significant growth opportunities."

Rifai notes that SPC is positioned to capitalise on increased demand for premium, high-quality food and beverage products across the region.

"We are confident that this transaction, backed by our strategic investments, will solidify SPC as a globally recognised brand while driving long-term value for our stakeholders," he says.

SPC, which was established as a farmers’ co-operative in Shepparton in 1917, owns the SPC, Ardmona, Goulburn Valley, ProVital, Pomlife, the Good Meal Co and Street Eats brands.

The company has undertaken a significant transformation since being acquired from Coca-Cola Amatil, growing through a series of acquisitions.

“Proud of our 100-year-plus history and our Shepparton roots, SPC looks forward to working with the OJC (The Orange Juice Company) team to accelerate growth and leveraging the combined platform to enhance distribution of our products,” says SPC’s incoming managing director Robert Iervasi.

“The addition of Nature One Dairy also allows us to diversify and reach more consumers every day through our international channels.”

The Original Juice Company’s CEO Steven Cail describes the merger as a “transformational moment” that provides significant production capability to create a market leader in food and beverage production.

“The strategy has always focused on setting up the business for future growth and synergies, and I am extremely excited about what the future holds for OJC,” he says.

Nature One Dairy’s CEO Nick Demopoulos sees the merger as a prime opportunity to be part of potentially one of Australia’s largest food companies.

“NOD aligns very nicely with the SPC’s care business and its desire to expand into the Asia,” he says.

“Utilising the combined business skill base, we can produce high quality products at a reduced costs and take other products of the combined business into Asia.”

The Original Juice Company plans to raise $1 million through a priority share offer priced at $1.50 per share to support the transaction.

This is being supplemented by funding offers from a consortium led by “a leading Australian non-bank lender” to provide a working capital debt facility for the business to fund the integration of the businesses.