Coca-Cola Amatil has announced completion of the sale of the SPC fruit and vegetable processing business to Shepparton Partners Collective for $40 million.
Taking into account forecasted working capital balances, working capital adjustments to the sale price and costs of disposal, Amatil says it is expected to record a profit on sale of approximately $14 million.
The sale agreement, announced in early June, also includes a four-year earnout structure which, subject to business performance, could result in up to an additional $15 million of sale proceeds at that time.
Due to the realisation of recognised deferred tax assets, Amatil says its ability to frank dividends will be “significantly impacted” in the short to medium term.
A ‘much-loved’ part of Amatil
Group Managing Director of Coca-Cola Amatil Alison Watkins says with the completion of the sale of SPC, Amatil will continue to focus on being a beverages powerhouse.
“SPC has been a much-loved part of our portfolio since 2005, and we’re confident it has a bright future in the hands of its new owners,” Ms Watkins said.
“Shepparton Partners Collective recognises the value of SPC’s brands, the opportunities for innovation and category growth in Australia, and its export potential.”
“On behalf of Amatil, I thank everyone at SPC for their commitment to the business and wish them well in continuing to grow their domestic and international markets.”
Since acquiring the SPC business in 2005, Amatil says it has invested around $250 million including in technology, operational and energy efficiencies, and new equipment.
A $100 million co-investment program from 2014 to 2018 also modernised SPC’s tomato and snack cup production, says Amatil, and introduced a new aseptic fruit processing system and pouch line at the Shepparton site.
The sale comes one year after SPC celebrated its 100th year of operating.