Metcash has entered into agreements to acquire three businesses – one in grocery and two in hardware – for a total of $558 million.
The largest of the three is the acquisition of Superior Food Group, Australia’s third-largest food services distribution business, for $412.3 million. The other two acquisitions are Adelaide-based Bianco Construction for $82.2 million and Wangaratta-based Alpine Truss for $64 million.
The purchases will be funded via a fully underwritten institutional placement of $300 million, as well as $278 million from existing cash and available debt facilities.
Doug Jones, CEO of Metcash Group, said the acquisitions will deliver further diversification and resilience to the group and will provide Metcash with an even stronger growth trajectory.
“The acquisitions unlock substantial shareholder value and build on our track record of disciplined and accretive capital allocation.
“The acquisitions provide a range of benefits for both Metcash and our network customers, which will allow us to continue Championing Successful Independents in support of thriving local communities, which is at the heart of everything we do.”
On the Superior Foods acquisition, Jones said Metcash is the logical owner of the company, and the acquisition cements Metcash as the largest wholesaler and distributor of food to independent businesses in the country.
“Superior Food provides a compelling opportunity to expand in an attractive and adjacent growth market through an industry leading player with an established national platform for future growth. The combination of the two businesses unlocks diversification benefits, procurement savings, range expansion and extends our purpose of championing successful independents.”
Superior Food’s founder and current CEO, Craig Phillips, will continue to lead the business, which will operate under the Metcash Food pillar.
“Superior Food has achieved significant growth, evolving into a national foodservice provider of scale with the loyal support of our staff, customers, and suppliers. Metcash’s capabilities and focus on supporting independents uniquely places them to continue our growth. We are proud of our past and excited about the bright future with Metcash,” said Phillips.
The two hardware acquisitions will form part of Metcash’s Independent Hardware Group (IHG) division.
“The acquisition of the Bianco Construction Supplies and Alpine Truss businesses are both strategically and financially attractive and follow our successful track record of consolidation in the fragmented Hardware market.
“The addition of these two businesses support our Independent Hardware Group’s ‘Whole of House’ strategy and will enable us to further increase the proportion of materials we provide over the course of a house build, and extend our supply network across South Australia, the Northern Territory, Victoria and Southern New South Wales,” explained Jones.