AUSTRALIA – Keytone Dairy, leading dairy manufacturer in New Zealand and Australia has entered into a binding agreement to acquire Australian UHT drinks manufacturer for US$15.5 million (AUD 22.6 million).

The acquisition will be funded through capital raising as part of the plan to scale and diversify its business in the health and wellness segment, which offers attractive growth opportunities.

The 100% Omniblend buy involves a placement of up to $8 million to institutional and sophisticated investors and a $10 million share purchase plan, both being offered at $0.43 per new share.

With the deal, Keytone targets to expand into the health and wellness sector in China by leveraging on the company’s existing distribution platforms in the market.

“I am thrilled with the acquisition of Omniblend and the opportunities it brings to Keytone,” said James Gong, Keytone CEO.

“It offers a significant and complementary infrastructure platform for growth whilst enhancing the ability of the collective business to maximise the offering to our customers, being proprietary brand customers as well as our private label clients.

“Keytone will not only be able to leverage its clean, green, pristine, New Zealand provenance and credentials, but also the highly complementary and robust Australian food safety standard conditions.

“These credentials are invaluable as we continue to penetrate our core markets, in particular China.”

Founded in 2008, Omniblend is a leading Australian manufacturer of dry powder and long-life UHT drink products serving the health and wellness companies.

The firm employs 84 people operating across four sites in Melbourne, Victoria and also creates formulations for its clients as well as for its own proprietary products.

For Keytone, the acquisition expands its revenue base through a diversified range of value-added products and services such as whey protein, sports nutrition, nutraceuticals and ready-to-drink long life UHT products.

With a focus on increasing its presence in the Chinese market, the firm recently signed a deal to manufacture and supply a range of milk powders for the Walmart-owned Sam’s Club stores in the country.

“We believe that the combination of Keytone’s existing Asia and China sales channels, export-oriented brand and capital reserves, with Omniblend’s scale, breadth of product range, highly automated manufacturing facilities and proven customer relationships will produce substantial cross-sell synergies,” said Keytone chairman Peter James.