Synlait plans to sell Dairyworks and Talbot Forest Cheese

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Synlait has announced it intends to sell Dairyworks, its cheese products division, and Talbot Forest Cheese, a related consumer business unit. Selected assets of New Zealand-based firm Talbot Forest Cheese were acquired by Synlait in 2019 for a price between NZD 30 million (approx. $20.1 million) and NZD 40 million (approx. $26.7 million). Meanwhile, the milk nutrition company acquired Dairyworks – also based in New Zealand – for NZD 112 million (approx. $71.1 million) in 2019 as it looked to expand in Australia. Should a divestment occur, the proceeds will be used to pay down debt. Synlait said the divestment of Dairyworks and Talbot Forest Cheese will enable it to focus solely on growing the “highest margin segments” of its B2B advanced nutrition and foodservice businesses located in Dunsandel and Pokeno, New Zealand.

Synlait CEO, Grant Watson, commented: “Dairyworks is an excellent business. It delivers cheese products to various channels under a portfolio of well-known household brands. Despite having extremely strong capability across consumer, brand, customer and procurement, Dairyworks is not core to Synlait’s diversified growth strategy and does not leverage our core right to win competencies in advanced nutrition and foodservice.” He added that the company needs to focus on the “business units where have a clear right to win”. The intended divestment of Dairyworks and Talbot Forest Cheese will enable Synlait to “help deliver against an increasingly focused strategy,” Watson concluded. Investment banking firm Jarden has been engaged to advise on the divestment. Dairyworks CEO, Tim Carter, said: “Synlait has enabled Dairyworks to build its growth aspirations over a short period of time. We now need to transition to having a greater reach globally, and this requires an owner who will continue to help us unlock further export markets, while continuing to grow and support the great, core market we have developed here in New Zealand and Australia.”