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Thursday 17 June 2021

$30m and counting – Christchurch PE firm makes debut food investment

10th June 2021 By Bridget O'Connell | | @foodtickernz

A Christchurch private equity firm has invested $30m in its debut deal in the food sector – and signalled there are more purchases in the pipeline.

SIO bought Original Foods for $30m.

The South Island Office, which was founded by partners Rob Farrell, Sam Rofe, James Stringer and Tom Elworthy in 2019, led a deal to buy the 30-year old family-owned baked goods manufacturer Original Foods Baking Co for a club of around 10 equity shareholders – including SIO.

The $30m purchase closed at the end of 2020 and saw SIO’s portfolio broaden from commercial property into food. Its first major investment was developing Christchurch’s former temporary library site on Peterborough and Colombo streets into a 4000 square metre office, but Farrell said it was now targeting more food investments and an agricultural land play.

“We have continued in this space and are now looking at an additional investment into the food sector,” he said.

Farrell described it to the Ticker as “a complementary business in food manufacturing,” adding that SIO was currently under exclusivity.

“We are also investigating land-use change opportunities within the Canterbury Plains. We see massive change happening in land-use and while it carries risk, risk means opportunity. Additionally, we see it as a progressive move which is necessary.”

The Original Foods Baking Co was established by Jane Mayell and Mike Sproule in 1991 and has grown to become one of New Zealand’s leading wholesale baked goods manufacturers, supplying supermarkets and foodservice distributors across New Zealand, as well as contracts into Australia.

Since March last year it has been led by chief executive Anthony Honeybone, the former boss of the government agency created to handle the earthquake claims of collapsed Christchurch insurer AMI, Southern Response. According to the Companies Office, Honeybone has a stake in the business via the SIO deal.

Original Foods’ product range included over 100 kinds of cakes, brownies, muffins, slices and bites, made largely from local ingredients and produced daily at their factory in Wigram.

SIO said Original Foods had been delivering “sound year-on-year growth and returns” and as the new owner it would continue to support the management team and staff – tallying more than 140 people – to deliver on Mayell’s and Sproule’s “vision of producing delicious, home-baked style goods for customers everywhere, and retaining its New Zealand ownership”.

Tom Elworthy added that the team at Original Foods were “the ultimate professionals and their passion for baking is evident in every aspect of the business”. 

“There are a number of unique strings to Original Foods’ bow that we will continue to focus on which will ensure ongoing growth in both the domestic and export sectors, creating even more jobs here in Christchurch and further afield,” he said.

Murray & Co acted as financial advisor on the sale of Original Foods to SIO.



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