McCain Foods Australia is looking to sell its Sara Lee frozen baked goods and desserts business, according to an October 13 report in the Sydney-based Financial Review. The paper said that Rothschild Australia’s investment bankers have been engaged to identify parties that may be interested in acquiring the operation, which produces and distributes a wide assortment of products including cheesecakes, tray cakes, puddings and other desserts as well as Danish pastries, muffins, waffles and croissants.
The Financial Review, quoting from a flyer sent to prospective buyers, stated that the Sara Lee brand commands a 53% market share of the Australian and New Zealand frozen desserts trade, and that sales generated during the 2020 financial year amounted to $96 million. Earnings before interest, tax, depreciation and amortization reportedly exceeded $15 million.
The Sara Lee production plant north of Sydney, which is said to be currently running at 50% capacity, has a replacement value of over $160 million.
McCain Foods Australia bought the Kitchens of Sara Lee (KOSL) frozen bakery enterprise from Hillshire Brands in 2012 in a deal valued at AUD $82 million (approximately $85 million). The purchase encompassed KOSL’s manufacturing, marketing, distribution and exporting of frozen desserts as well as its licensing rights to the Sara Lee trademark in connection with the bakery business in Australia and other countries within the Pacific Rim region.
Commencing operations in Lisarow, New South Wales in 1971, Sara Lee has been supplying the Australian foodservice market for almost five decades. It ranks among the largest users of fresh produce in Australia; using large quantities of butter, eggs, cream and cheese, in addition to substantial amounts of flour, fruits and sugar.