Bega Cheese Ltd (ASX: BGA) just announced to the market that it is spending $250 million to acquire Saputo’s Dairy Australia’s Koroit dairy processing facility.
Bega Cheese is one of Australia’s largest dairy businesses, supplying cheese under the Bega brand and also owns the Vegemite brand.
The processing facility is located at Koroit in Western Victoria and currently processes around 300 mega litres of milk into bulk and butter, commodity and milk powders.
Bega Cheese will pay $250 million, which includes average inventory, which Bega will fund with debt. The company thinks it will generate EBITDA (click here to learn what EBITDA is) profit of $20 million at the current milk intake with room for growth.
“The Koroit Facility will provide us with a significant presence in Western Victoria and operational flexibility with our other milk processing sites,” Bega Cheese’s CEO, Mr Paul van Heerwaarden, said.
“Importantly the acquisition will support the continued growth of our core dairy business and provide domestic and export customers with an expanded range of products. We welcome the 108 employees of Koroit to Bega Cheese.”
The Bega share price was trading 0.35% lower Thursday morning, according to Commsec.
DId you know: In 1945, Warren Buffett took $1,200 he made in business and bought 40 acres of farm in Nebraska. He was 14. Buffett was a millionaire by his late 20’s but ‘only’ worth $300m at his 50th birthday. Now he is a $US84 billion investor.
That means he made 99% of his wealth after turning 50!
How does a 50-year-old do that when the world seems to be falling apart? Download the free Aussie investing ebook, “What Buffett’s Investing Checklist Can Teach Aussie Investors“ when you join the free Rask Group Investor Club Newsletter. You’ll get insights into the 4 steps Buffett uses to pick his investments.
