Bega Cheese Ltd is on buying spree

Acquisition of Koroit facility in Western Victoria: Bega Cheese Ltd.’s (ASX: BGA) stock moved up by 3.7% on July 18, 2018 after the company agreed to buy a dairy processing facility at Koroit in Victoria state from Saputo Inc’s local arm for A$250 million. The acquisition price includes the average inventory, which will be fully funded by new and existing bank debt facilities. The Koroit Facility has a processing capacity of approximately 300ML of milk into bulk and retail butter, commodity and retail milk powders. BGA and Saputo Dairy Australia (SDA) have signed a Transition Services Agreement and a Milk Supply Guarantee Agreement under which SDA is required to guarantee supply of 300ML of milk per annum until 30th June 2020. However, the transaction is subject to ACCC approval. Moreover, the acquisition of the Koroit Facility will provide BGA a significant presence in Western Victoria, support the continued growth of the core dairy business and will cater to the company’s domestic and export customers with an expanded range of products. Additionally, this acquisition is expected to generate an annualised EBITDA of $20m assuming the current annual intake of 300ML. After acquisition, the Koroit Facility will be integrated into Bega Cheese broader network of milk processing facilities, which may take until FY21 to complete the integration. Meanwhile, BGA stock has risen 17.20% in three months as on July 17, 2018  and is trading at a P/E of 8.39x.


The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s