The Original Juice Co. Unveils Strategic Merger with SPC and Nature One Dairy
THE ORIGINAL JUICE CO. LTD (OJC) Share Update October 2024 Thursday 24th
The Original Juice Co. Announces Major Merger with SPC and Nature One Dairy
The Original Juice Co. Ltd (OJC) has announced a significant merger with SPC Global Limited and Nature One Dairy, marking a strategic move to expand its scale and diversify its product offerings.
Instant Summary:
- OJC announces merger with SPC and Nature One Dairy.
- Expected combined annual FY25 revenue of over $400 million.
- OJC to be renamed SPC Global Holdings Ltd.
- Proposed re-listing on ASX under the ticker 'SPG'.
- Directors unanimously recommend voting in favor of the merger.
Details of the Proposed Merger
On 2 October 2024, The Original Juice Co. Ltd (OJC) revealed its plans to merge with SPC Global Limited and Nature One Dairy. This merger is expected to significantly enhance OJC's scale and diversify its product offerings, with an anticipated combined annual FY25 revenue exceeding $400 million.
The merger involves OJC acquiring 100% of SPC's issued share capital and the powdered milk business of Nature One Dairy. This strategic move is expected to result in material synergies and operational efficiencies, leveraging SPC's production facilities and Nature One Dairy's market presence.
Strategic Rationale
The merger aims to create a leading player in the Australian food and beverage market. SPC is renowned for its iconic brands in packaged fruit and tomato-based products, while Nature One Dairy is a key player in the powdered milk sector. The merger is expected to provide OJC with enhanced production capacity and a more diversified product base, reducing susceptibility to seasonal and weather-related risks.
Impact on Shareholders
Upon completion, existing OJC shareholders will hold 15.75% of the merged entity, with SPC and Nature One Dairy shareholders holding 69.15% and 14.75%, respectively. The merger will result in a consolidation of OJC's shares on a 10-to-1 basis, facilitating a more appropriate capital structure moving forward.
Next Steps and Approvals
The merger is contingent upon shareholder approval, with a virtual meeting scheduled for 22 November 2024. The directors of OJC unanimously recommend that shareholders vote in favor of the resolutions necessary to proceed with the merger. If approved, the merged entity will be renamed SPC Global Holdings Ltd and re-listed on the ASX under the ticker 'SPG'.
The merger is expected to significantly enhance OJC's market position, providing access to SPC's established brands and production capabilities. The diversification into powdered milk through Nature One Dairy could stabilize earnings and reduce seasonal vulnerabilities. However, the dilution of existing shareholders' stakes and the need for successful integration pose potential challenges.
Investor Reaction:
Analysts view the merger as a strategic fit, likely to enhance OJC's competitive position in the market. The potential for increased scale and diversified product offerings is seen as a positive, although the integration process will be closely monitored by investors.
Conclusion:
Investors are encouraged to participate in the upcoming shareholder meeting to vote on the proposed merger. The strategic benefits of the merger, including enhanced scale and diversification, position OJC for long-term growth in the competitive food and beverage sector.