United Dairy on a quest to find a suitor


United Dairy Power, Australia’s largest privately owned milk supplier, has been exploring different options to expand its business in the past year and is now looking to sell part of the company to an Australian dairy investor.

Image credit: freedigitalphotos By: graur razvan ionut
Image credit: freedigitalphotos By: graur razvan ionut

“We wish to remain Australian owned,” United Dairy Power’s General Manager Darryl Cardona told DataRoom.

“Consolidation of the dairy industry globally is continuing, you only have to look at Warrnambool Cheese and Butter.”

Cardona refused to comment on emerging speculations as to which companies were interested in buying stakes in United Dairy and rubbished the rumours saying Manassen Foods, a unit of China’s Bright Food Group Ltd, was interested in acquiring the Melbourne-based company.

“We’ve had different approaches by different companies over the years,” says Cardona.

He also refused to disclose any financial details regarding United Dairy and dismissed the report made by an investment bank which stated that the company has made $125 million from sales in 2011.

Mr Cardona declined to comment on the company’s valuation, although potential buyers have estimated the company to be worth somewhere in the region of $30 to $40 million based on its cash flow.

According to the news article  on the Australian, United Dairy has failed in its previous attempts to sell stakes to interested parties due to concerns over maintaining contracts with dairy farmers.

On top of that, the company’s two factories, at Jervois and Murray Bridge in South Australia, are not held in highest regard because they are not situated in a prime dairy catchment, although Mr Cardona strongly disagrees with this notion.

“There’s 800 million litres of milk in South Australia and over half of it comes back to Victoria for manufacturing,” he said.

United Dairy was established in 1999 and is run by founder partner Tony Esposito. The company not only buys milk, but also provides transport and logistics services as well as manufacturing facilities. Its dairy products include cheddar, the Caboolture brand of mozzarella cheese, butter and whey powder, to name just a few.