ALLIED Mills Australia has been sold to private equity firm Pacific Equity Partners (PEP) for $190m, according to an announcement today from GrainCorp – one of the miller’s former owners.
GrainCorp owned 60% of Allied Mills, with joint venture partner agricultural commodities company Cargill Australia owning the other 40%, with the total price paid by PEP reported to be $190m (pre-tax and transaction costs).
GrainCorp managing director and CEO Mark Palmquist said along with Cargill Australia, GrainCorp had been joint investors in Allied Mills for more than 15 years.
“This transaction is consistent with our strategy to proactively manage our portfolio to improve returns,” he said.
“The interest shown by PEP to acquire full control of Allied Mills provided us with an excellent opportunity to realise the value in Allied and create balance sheet flexibility for the future.”
GrainCorp CFO Alistair Bell said the sale created an opportunity to realise value, reduce gearing and improve returns.
“The funds of $190m will provide flexibility as we approach our peak gearing and remain available for other redeployment opportunities,” he said.
GrainCorp is a major exporter of grain, operating seven bulk export grain elevators in eastern Australia, with container packing facilities at Brisbane and Geelong.