As of Tuesday, March 24, the newly created United Malt Group, the fourth largest malting group in the world, will be listed as a separate business on the Australian Securities Exchange (ASX). GrainCorp shareholders last Monday voted 99.5 per cent in favor of splitting the grain business from its global malting operations.
However, timing of the listing on the ASX could not be worse, since the total stock market has collapsed in the last weeks as a result of the coronavirus outbreak. United Malt stock will presumably begin trading at the bottom of intended range which is around the AUD 5 (USD 2.92) to AUD 6 (USD 3.51) mark. This implies an enterprise value of AUD1.7 billion (USD 0.99 bn) and a 17 times price-to-earnings multiple. Every GrainCorp shareholder will receive one United Malt share for every GrainCorp share. GrainCorp announced to retain 10% of all shares which will provide a modest, but useful, extra income stream, and can be liquidated if needed at a later date (inside.beer, 24.2.2020).
Former GrainCorp chief executive Mark Palmquist will take the helm at spinoff United Malt. Robert Spurway, the former chief operating officer at New Zealand dairy giant Fonterra, is taking over from Mark Palmquist and is about to lead newly restructured GrainCorp. The company will continue to operate its bulk handling sites in Australia and North America, seven seaboard grain terminals, oilseed processing operations in Victoria, plus overseas processing and trading offices from New Zealand to Singapore, India, China and Eastern Europe.
United Malt has 13 malt processing plants in USA, Canada, Australia and Great Britain. In addition, the company operates in all of its markets craft beer supply companies like the Country Malt Group in USA, Cryer Malt in Australia and Brewers Select in the UK. Those companies supply through several warehouses the local craft and home brewing community with malt, hops and other material needed in the daily brewing process.
ses the local craft and home brewing community with malt, hops and other material needed in the daily brewing process.