Trading of United MaltGroup’s (UMG) ordinary shares was halted today on Australian Securities ExchangeASX following a potential change of control transaction. As reported by the Australian Business Review, French cooperative InVivo Group which has snapped up family-owned Groupe Soufflet in a USD 2.5 billion deal in 2021 (inside.beer, 6.5.2021) has launched a buyout proposal for UMG.
Shares in UMG closed on Friday at AUD 3.34 with its market value at AUD 1.02bn (USD 677,000 million). The valuation of UMG has suffered a lot in the last years. After going public in March 2020 with a share price of AUD 4.10, the price had fallen to AUD 2.85 in October last year and recovered since to the current AUD 3.34. However, UMG is understood to be staring at a bid worth AUD 4.80 to AUD 5 a share, or a 40 to 45 per cent premium to the last close.
UMG, advising by Macquarie Capital, and Goldman Sachs-advised Malteries Soufflet have been in confidential talks for the past year or longer.
The deal would bring together the number two and number four in the global malt market and forge the world's largest malting group with an annual production volume of about 3.6 million tons of malt. Next comes only the current number one, Boortmalt, with about 3 million tons of malt a year, followed by Malteurop with about 2.3 million tons.
With Grupe Soufflet owned by InVivo Group, Boortmalt owned by Axereal and Malteurop owned by Vivescia, all leading maltsters are in the hands of French cooperatives.
Thierry Blandinières, InVivo's ambitious CEO, had already announced in December 2021 his intention to double the capacity of the malt division within 5 years. (inside.beer, 9.12.2021) Three months ago, he did the first small step by acquiring Belgium oldest malthouse Castle Malting (La Malterie du Château) with a capacity of about 40,000 metric tons. (inside.beer, 2.1.2023) The planned takeover that became known today would bring Thierry much closer to his goal of a yearly production of about 4 million tons of malt.
UMG as it is known today exists only for three years. Australia’s GrainCorp announced in 2019 to spin off its malting business in a separate company and list it on the ASX (inside, 4.4.2019) Finally in 2020, when the spin off took place, (inside.beer, 22.3.2020) GrainCorp retained a 8.5% share in its former malting division which operated by that time 13 malt processing plants in USA, Canada, Australia and Great Britain. In addition, UMG operated in all of its markets craft beer supply companies including the Country Malt Group in USA, Cryer Malt in Australia and Brewers Select in UK.
Next to GrainCorp, biggest investors in UMG are currently Australian pension funds ART, Hostplus and Aware Super, Ethical Partners Funds Management, L1 Capital and Yarra Capital.
In October 2022, UMG’S CEO Mark Palmquist submitted his resignation with plans to retire during fiscal year 2023 saying he believes it’s the right time for a new Chief Executive to lead UMG for the next period of its development.