As revealed by Street Talk on Financial Review Sunday, less than a year after Warrnambool Cheese & Butter’s red-hot auction, victor Saputo, its main rival Murray Goulburn, Bega Cheese and the like expect insolvency firm PPB Advisory to launch UDP’s sale.
An information memorandum (IM) is expected to be released today, with a December deadline set for indicative bids.
The major milk processors are likely to line up against private equity firms, whose interest in the sector was renewed when Australia signed a free trade agreement with China a fortnight ago.
While UDP’s revenue and earnings will not be known until the IM is released, early indications are the business could be worth between $70 million and $100 million.
UDP is an independent milk processor, with operations in Victorian towns Poowong and Shepparton, and South Australia’s Murray Bridge and Jervois. The company processes 200 million litres a year, or 4% of the domestic milk market. It makes UDP about one-fifth the size of Saputo -controlled Warrnambool Cheese & Butter.
The major processors would consider it a strategic bolt-on and as access to milk at a time when dairy production is stagnant and milk supply is failing to keep up with consumer demand. Australian producers are also looking to tap into Asian markets.
UDP is being sold out of receivership. Lender Rabobank took control of the milk processor earlier this month, after the company’s Chinese owners failed to stump up additional capital to support the business. Rabobank appointed PPB as receiver.
An information memorandum (IM) is expected to be released today, with a December deadline set for indicative bids.
The major milk processors are likely to line up against private equity firms, whose interest in the sector was renewed when Australia signed a free trade agreement with China a fortnight ago.
While UDP’s revenue and earnings will not be known until the IM is released, early indications are the business could be worth between $70 million and $100 million.
UDP is an independent milk processor, with operations in Victorian towns Poowong and Shepparton, and South Australia’s Murray Bridge and Jervois. The company processes 200 million litres a year, or 4% of the domestic milk market. It makes UDP about one-fifth the size of Saputo -controlled Warrnambool Cheese & Butter.
The major processors would consider it a strategic bolt-on and as access to milk at a time when dairy production is stagnant and milk supply is failing to keep up with consumer demand. Australian producers are also looking to tap into Asian markets.
UDP is being sold out of receivership. Lender Rabobank took control of the milk processor earlier this month, after the company’s Chinese owners failed to stump up additional capital to support the business. Rabobank appointed PPB as receiver.