Deal for the future: Original Juice Company, SPC, Nature One Dairy

The Original Juice Company has entered a binding merger implementation deed and share sales agreement to acquire SPC Global and Nature One Dairy. OJC says the deal delivers “increased scale, diversification, significant operational synergies, and a platform for further growth”.

The combined business is expected to deliver more than $400 million in revenue and earnings before interest, taxes, depreciation and amortisation of $29 million in FY25. In FY24, SPC recorded $271 million in revenue, NOD $46 million, and OJC $49 million.

It will operate as three business units be listed on the ASX, with OJC’s code changing to SPG.

OJC said it would issue 133 million shares to the shareholders of SPC as consideration for the transaction, and up to 29 million shares and cash of up to $6 million to Nature One Dairy shareholders.

The combined business has received funding offers from a consortium led by a leading Australian non-bank lender in relation to a working capital debt facility to provide the new business with sufficient liquidity to meet its working capital needs and fund integration of the businesses to “ensure the realisation of synergies expected from the transaction”.

Once completed, which is expected to be November, OJC, SPC and NOD shareholders will hold 15.5 per cent, 69.2 per cent and 15.3 per cent of the business.

The empire strikes back

At the press conference announcing the deal, OJC chair Jeff Kennett likened the merger to Star Wars’ empire fighting back.

“The decision today gives us an opportunity to recognise the importance of farmers and those employed in our manufacturing and distribution system. For me, it is a very important moment. In one sense, it’s the empire fights back against those overseas organisations that are buying our agricultural land and manufacturing companies.

“There is no doubt in my mind that the demands of those to our north, whose eating habits are changing all the time, will increasingly look towards Australian products if we can, in fact, grow organisations like this,” Kennett said.

Kennett said the deal was not for today but for the future.

“We believe in the products; we believe in their innovation. If you’re doing something for today, you’re standing still and that’s not what this is about. If this wasn’t about the future, we wouldn’t be going through this process,” he said.

The trifecta

SPC has been running for more than 100 years and is the largest producer of fruit, tomato, baked beans and spaghetti processing, packaging, and canning in Australia. Its brands include SPC, Ardmona, Goulburn Valley, ProVital, Pomlife, the Good Meal Co, and Street Eats.

OJC specialises in chilled fruit and vegetable juices. Founded in 1988, it produces juices, fibres, infused fruits, and fruit waters for domestic and international markets. It uses a range of processing technologies, including counter current extraction (CCE) technology that was developed in conjunction with CSIRO to extract juice from fruit and vegetables. Its processing facilities are currently located in Mill Park, Victoria.

And Nature One Dairy manufactures and sells infant formula, nutritional formula and milk powder products. It was founded in Australia and is registered in Singapore, with markets in Australia, China and other Asia Pacific countries.

NOD CEO, Nick Demopoulos, said, “This is a great opportunity to be part of what will be one of Australia’s largest food companies. NOD aligns very nicely with the SPC’s care business and its desire to expand into the Asia. Utilising the combined business skill base, we can produce high quality products at a reduced costs and take other products of the Combined Business into Asia.”

NOD’s international market presence will provide the platform for growth across the combined business through product diversification and access to the Asian distribution market.

Leadership

Former Asahi Beverages CEO, and currently a director on SPC’s board, Robert Ievasi, has been announced as managing director. Hussein Rifai, chair of SPC, will chair the new company.

Iervasi said the combined business will enable expanded operations here and overseas, with “significant synergy potential” between SPC and OJC.

“Proud of our 100-plus year history and our Shepparton roots, SPC looks forward to working with the OJC team to accelerate growth and leveraging the combined platform to enhance distribution of our products.

“The addition of Nature One Dairy also allows us to diversify and reach more consumers every day through our international channels,” Iervasi said.  

OJC CEO, Steven Cail, and NOD CEO, Nick Dimopoulos, will stay with the business to ensure a successful transition.

Cail said the merger was a “transformational moment” that would create significant production capability to create a food and beverage producing market-leader.

“The strategy has always focused on setting up the business for future growth and synergies, and I am extremely excited about what the future holds for OJC. The OJC team is excited to join the 100-year legacy of SPC and contribute to taking the combined business forward in its next phase of success,” Cain said.  

OJC chair, Jeff Kennett, announced he would be retiring from the role once the transaction was completed.

“I have been honoured to serve as Chairman of OJC since December 2022. The agriculture industry is a core pillar of our national identity in Australia and the backbone of many regional towns across the country.

“We should be supporting businesses like OJC, SPC and NOD to continue to thrive in their mission to support local growers, employ Australians in our processing plants and produce iconic healthy products for consumers, both in Australia and abroad. I am excited about the prospects of the combined business,” Kennett said.  

OJC CEO, Steven Cail, said, “This is a transformational moment for OJC, bringing our premium portfolio of juice products and processing technology together with SPC’s iconic brands and the powdered milk business of Nature One Dairy, creating significant production capability to create a food and beverage producing market-leader.

“The strategy has always focused on setting up the business for future growth and synergies, and I am extremely excited about what the future holds for OJC. The OJC team is excited to join the 100 plus year legacy of SPC and contribute to taking the combined business forward in its next phase of success.”

Pivotal moment for SPC

SPC chair, Hussein Rifai, said the deal was “a critical step in advancing the global strategy that has guided SPC since its divestment from Coca-Cola Amatil (CCA)”.  

“Our goal is to create ‘better, healthier food for the future.’ Since acquiring SPC from CCA, our strategy has been to firmly establish ourselves as a leader in both the Australian and global markets. Building a strong foundation in our home market is vital for sustainable growth and success.

“Our immediate focus is on solidifying SPC’s position as a domestic market leader. This is the essential first step before executing our broader global strategy, which targets key international markets, particularly in Asia, where we see significant growth opportunities,” Rifai said.

“With rising demand for premium, high-quality food and beverage products across Asia, SPC is strategically positioned to capitalise on its strengths in innovation, sustainability, and product excellence. We are confident that this transaction, backed by our strategic investments, will solidify SPC as a globally recognised brand while driving long-term value for our stakeholders.”

Private equity group, Shepparton Partners Collective, acquired SPC in 2019 for $40 million from Coca-Cola Amatil, a steal compared to the $490 million CCA paid for it in 2005. The Collective was a joint venture between The Eights and Rifai’s investment firm, Perma Funds Management, which owns 58 per cent of the company. Andrew Cohen, a non-executive board member for the new company, is a partner in Perma Funds and specialist advisor for The Eights.  

At the time, Rifai told Food & Drink Business that to build SPC into the global agribusiness the company wanted to be – “the Nestlé of Australia” – it must have a strong growth strategy.

“There is no silver bullet to achieve that. Our growth strategy is to acquire or enter new categories and develop international markets,” he said.

In the five years since, the company has undergone some major changes including streamlining operations and launching new brands. In the first four months it installed a new CEO, reintroduced an apprenticeship program, and sold IXL and the Kyabram factory.

It formed a JV with Döhler in 2020 to develop its ingredients business, which at the time contributed around 10 per cent of turnover. It also acquired a majority stake in frozen food manufacturer, Kuisine Co and its ready meal brand The Good Meal Co, as it sought to build its existing health brand ProVital portfolio and expand into aged care, home care, hospitals and other support services.  

The following year it launched SPC Care, a dedicated nutritional health care company. It took a stand when it came to Covid vaccinations, completed a $111 million raise in 2022, and started developing new products, some more successful than others, and rebranding. The launch of its frozen Street Eats brand saw SPC build a facility in Auburn, Western Sydney and employ 100 people.

Late last year it launched a localised capital raise for the Goulburn Valley community with a $15-20 million target.