PZ Cussons to acquire Australian organic baby food producer Rafferty’s Garden

UK-based consumer goods manufacturer PZ Cussons has agreed to acquire Australian organic baby food producer Rafferty’s Garden from private equity firm Anacacia in a £42.2m all-cash deal.

This move by PZ Cussons comes after the Australian Competition and Consumer Commission (ACCC) opposed US-based food giant HJ Heinz’s proposed acquisition of Rafferty’s Garden in June.

Rafferty’s Garden is a leading nutritious baby food brand in Australia with approximately 40% share of the wet baby food market, as well as a growing share in the infant dry and snacks market.

The company is in the early stages of development to begin exports to countries such as Indonesia and Thailand, and all its manufacturing operations are outsourced to third parties.

Rafferty’s reported £22.5m in revenues and earnings before interest, taxes, depreciation, and amortisation (EBITDA) of £3.5m for the year ended 30 June 2012.

As of 30 June 2012, the company had gross assets of £12.5m.

PZ Cussons stated that its distribution capabilities in countries such as Indonesia and Thailand and its Cussons Baby brand will maximise the geographic expansion of Rafferty’s Garden.

PZ Cussons chief executive officer Alex Kanellis said that the acquisition of Rafferty’s Garden marks the company’s entry into the food and nutrition category in Asia-Pacific and the addition of another leading brand to its portfolio.

“This leading position together with an exciting pipeline of new products provides the platform for further growth within Australia,” Kanellis added.

Rafferty’s Garden managing director Michael Tinkler said: “PZ Cussons is a great fit for our business and we are looking forward to working with them to service our existing stakeholders as well as expand the business internationally.”

This deal follows a series of acquisitions in the infant formula market – in June, Campbell Soup acquired organic baby food producer Plum Organics, and in May US-based Hain Celestial acquired baby food firm Ella’s Kitchen, while French dairy firm Danone agreed to acquire a majority stake in US baby food producer Happy Family.

Headquartered in Manchester, England, PZ Cussons has leading brands in personal care, homecare, electrical goods and food and nutrition, and operates across Europe, Asia-Pacific and Africa.

The company’s well-known brands in Australia include Morning Fresh, Radiant, Duo, Imperial Leather, Original Source and St Tropez.