Firm advises on $500m agribusiness deal

A firm has acted on a $500m capital raising and restructure for a major Australian dairy company.

Firm advises on $500m agribusiness deal
Herbert Smith Freehills has advised major dairy company Murray Goulburn on its capital restructure and capital raising, worth $500m.

Murray Goulburn, owner of Devondale and Liddells brands and the country’s largest dairy food company, established a unit trust in the restructure which listed on the ASX on 3 July this year, raising $437.7m with an additional $62.3m raised through two supplier share offers.

Melbourne partners Tim McEwen and James Crowe led the Herbert Smith Freehills advisory team.

“We are delighted to have been involved in such an innovative, complex and transformative transaction,” said McEwen.  “It was a pleasure to work with such a dedicated and passionate team at Murray Goulburn who were so committed to ensuring that the company has the opportunity to continue to grow for the benefit of its suppliers, investors and the Australian dairy industry.”

The company will use the funds for growth investing in key projects and further developing its large supply chain network.

"This transaction has delivered to Murray Goulburn $500 million of capital to grow its business domestically and internationally while remaining a 100% farmer controlled cooperative," McEwen said.  "Murray Goulburn has adopted a new capital structure that creates a strong alignment of interest between its suppliers and the unitholders in the MG Unit Trust and which will enable Murray Goulburn to achieve sustainably higher milk prices and generate returns for its shareholders and the unitholders."

Macquarie Capital (Australia) Limited acted as Sole Lead Manager of the capital raising and Macquarie and Lazard Australia acted as financial advisers to the Capital Structure. 

"We expect that the agribusiness sector will remain a strong focus of investors, as there is a recognition of Australia’s strong agricultural sector across a number of primary industries and a desire for investors, particularly international investors to obtain an exposure to the sector," said McEwen.

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