Murray Goulburn (MG), Australia’s largest dairy foods company, has agreed to sell its 25.26% stake in food testing business, Dairy Technical Services Limited (DTS), to a Consortium comprising Bureau Veritas Group and AsureQuality Limited.
DTS was founded in Melbourne in 1954 to provide independent, analytical services to the food industry. The company has four major shareholders, including MG, The Warrnambool Cheese and Butter Group, The Fonterra Group and AsureQuality.
Once the acquisition is completed, DTS will be operated by the Consortium which will provide best-in-class testing capabilities to Australian food manufacturers, including MG.
MG said the sale was expected to be completed by the end of May 2016.
“The divestment of MG’s interest in DTS is expected to result in a one-off profit before tax on sale of $18 million in the financial year ending 30 June 2016,” the company said in a statement to the ASX.
“The full impact of the sale was factored into MG’s forecast Available Weighted Average Southern Milk Region Farmgate Milk Price advised as part of its first half year results release on 29 February 2016, given discussions regarding the DTS divestment were well advanced at that stage. Going forward, the earnings impact of the divestment is immaterial.”
Murray Goulburn manufactures a full range of dairy and nutritional products such as cheese, milk powder, butter and fat, drinking milk and liquid milk products, nutritionals and value-added products, such as infant formula.
The company supplies the grocery, foodservice and ingredients channels domestically and around the world, particularly in Asia, with its flagship Devondale, Liddells and Murray Goulburn Ingredients brands.