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Friday 03 December 2021

F&B helps pump record Q3 M&A

25th November 2021 By Staff Reporter | | @foodtickernz

A handful of heavyweight FMCG-related takeovers helped support a record number of mergers and acquisitions in New Zealand in the third quarter, according to PwC.

FountainVest Partners purchased Auckland-based pet food company Ziwi for $1.5bn in Q3.

The professional services firm reported in its M&A Quarterly Update that a record 54 deals were completed or announced in the three months from July to September, topping the previous high of 47 deals in the second quarter of 2021.

PwC said the persistent low interest rate environment had led to reduced cost of capital and higher valuations, creating more sellers and a strong appetite for merger and acquisitions from buyers.

“Activity has likely been buoyed by deals that were put on hold throughout 2020 coming back to market. Deals have also been brought forward due to uncertainty surrounding the business environment as we continue to navigate the impacts of Covid-19,” PwC said.

After a subdued start to 2021 M&A has rocketed to record levels

It noted local buyers were strongly represented completing 37 of the 54 deals announced or completed during Q3, and of the 17 cross-border M&A deals almost half of that activity came from Australia. 

Notable FMCG activity in the third quarter included Chinese private equity firm FountainVest Partners’ $1.5bn purchase of Auckland-headquartered pet food company Ziwi, and A2 Milk’s purchase of a 75% stake in Southland dairy processor Mataura Valley Milk for $268.5m.

Indevin Group’s $190m purchase of wine company Villa Maria, Hume Pack-N-Cool’s takeover of New Zealand Kiwifruit, and Seeka buying Orangewood for $6.6m also made the Q3 list.

Domestic buyers drive Q3 activity

PwC published the M&A Quarterly Update for the first time in Q2, reporting a then-record of 47 deals of which nine took in food, petfood, agriculture or agritech, following only 11 deals in Q1 and subdued activity in 2020 at the hands of border restrictions and Covid-19 uncertainty, PwC said.

The Q2 activity included another notable private equity pet food acquisition with KKR snapping up Christchurch’s Natural Pet Food Group.

In pure F&B plays, the Q2 period included Arnotts’ acquisition of cracker company 180 Degrees, coffee company Allpress’s takeover by brewing giant Asahi, posh tonic company East imperial’s reverse takeover by Bermele, which saw it list on the London Stock Exchange, and the Hart family food business Walter & Wild’s purchase of ice cream. maker Emerald Group.



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