Wang Zongnan, chairman of Bright Food, said in an exclusive interview with this reporter that Australia will become a landing platform for overseas mergers and acquisitions.
Eight months of merger and acquisition war
Signed a confidentiality agreement with the target company, and the other party agreed to open the database. Manason's business channels span retail business, catering services, industrial exports and other fields, of which private brand sales account for about 78% of the total sales, and agency brands account for about 22%.
Wang Zongnan introduced that on February 20th, 20 10 10, CHAMP Private Equity Fund planned to sell its shares in Manason. After preliminary communication and preliminary financial analysis, Guangming team signed a confidentiality agreement with the target company, and the other party agreed to open the database. But in Wang Zongnan's view, the real acquisition negotiations began in April this year. At the beginning of April, Guangming team and relevant intermediaries conducted a preliminary due diligence on Manason. On April 29th, based on the preliminary due diligence, Guangming issued a non-binding offer to Manason, demanding the exclusive period of the project.
On May 23rd, Manassen agreed to give the project an exclusive period and allowed Guangming to conduct in-depth due diligence. In June, the project was approved by Guangming Group, and Nomura Securities was officially hired as a financial consultant.
In July, Guangming went to Australia twice to discuss the transaction price and legal documents, and the two sides finally reached an agreement in August.
The two sides were once deadlocked on issues such as price. Previously, CHAMP had offered a high price of $636 million. In the end, the two sides reached an agreement after several rounds of repeated negotiations, with an overall valuation of 530 million Australian dollars or 562 million US dollars.
Tong Kang, managing director of China Investment Banking Department of Nomura Securities, said that the final price is based on comparable transactions and comparable companies.
Through management incentives and other trading mechanisms, the existing management has been left behind.
Prior to this, Bright had made five mergers and acquisitions with CSR Australia, United Biscuits UK, Canasi USA, Xinlian Dairy New Zealand and Uno France, and only Xinlian Dairy New Zealand succeeded. The remaining four times, either take the initiative to give up or have no choice but to go out.
In Wang Zongnan's view, under the background of global assets entering the inflation channel and the continuous appreciation of RMB, it is the general trend for China enterprises to go abroad to M&A and for emerging markets to integrate into mature markets. As far as food enterprises are concerned, there will be huge market demand in the next 5- 10 years, but on the other hand, because domestic food safety problems cannot be solved in a short time under the existing industrial structure, China food enterprises are required to form a whole industrial chain through mergers and acquisitions. At present, Shanghai Tobacco and Sugar Group, owned by Guangming, is the main operating platform for its overseas mergers and acquisitions, and also the main body of this acquisition.
Wang Zongnan believes that "this is a fortune, let us bid farewell to the vulgar era." The bid also let it know the differences and risks of financing schemes in different parts of the world. Take the United biscuits in Britain as an example. Because it was later found that there was a risk of providing for the aged, I finally chose to give up.
"We summed up five sentences: in line with strategy, synergy, controllable risk, reasonable price and excellent team." Wang Zongnan also said that through previous experience, Guangming has formed a wide network of relationships with international financial circles, investment circles, law firms and local governments, and formed a system for judging the value of projects.
Tong Kang revealed that the success of the transaction was, first, the exclusive negotiation was made clear from the beginning, and second, the existing management was left behind through trading mechanisms such as management incentives. Being able to enter the China market is also an important point to gain management support.
The remaining 25% of Manassen shares will continue to be held by current shareholders, including Roy Manassen, funds managed by CHAMP and other senior executives of the company.
Integration policies and issues
"This is really a bigger test."
Prior to this, many China enterprises faced a series of problems such as management, talent and cultural integration after overseas acquisition, and the cases of integration failure were endless.
"This is really a bigger test." Wang Zongnan said that in the future, Manason can cooperate with Tang Yan Guangming in brand and production interoperability, integration and introduction of high-end products, international procurement, raw material supply and business model replication.
"We will distribute Manason's products through our channel in China and use Manason's distribution channel in China to sell Australian food." Wang Zongnan said, "We will also introduce a good access model to China." The gross profit of Manasen's distribution agency business reaches 30%, while the average gross profit of Chinese enterprises is only about 65,438+00%.
Australia, which has sugar, wine, tropical fruit resources and a relatively open investment environment, is the focus of bright overseas mergers and acquisitions. Wang Zongnan said that Guangming hopes to further integrate Australian food resources and industries on the premise of rapidly acquiring Manas's existing resources and markets. At present, Guangming is looking for M&A projects related to sugar, wine and dairy products in Australia.