AFTER doubling its size in the past week, GrainCorp is to ditch the private equity company name, United Malt Holdings (UMH), from public profile and focus on the four maltster brand names it has just bought in its $757 million acquisition of UMH.
GrainCorp has confirmed completion of the UMH purchase from the joint American-Australian private equity investment companies, Castle Harlan, based in New York and Champ Private Equity in Sydney.
The deal gives it ownership of the Canada Malting Company, Great Western Malting (USA), Bairds Malt (UK), and Australia's Barrett Burston Malting, effectively transforming the eastern States grain handler and marketer into an international agribusiness operating across four countries.
GrainCorp managing director, Mark Irwin, said the move was a special occasion in the 93-year history of the grower-built grain business, with around half the company's earnings now set to be derived from barley and wheat processing.
GrainCorp also owns 60 per cent stake of big Australian flour miller, Allied Mills.
"The acquisition means GrainCorp has a much more stable and diversified earnings base, and from that base we will focus on providing long term earnings and value growth for shareholders," Mr Irwin said.
It also gives GrainCorp a market value on the Australian Stock Exchange exceeding $1 billion, making it the world's fourth largest commercial malt producer and brings its workforce numbers up to about 1400 permanent staff in four countries.
The UMH group was established as a multinational malting business three years ago when local maltster, Barrett Burston, was merged with Great Western Malting, the Canada Malting Company, and a 60 per cent stake in the UK's Bairds Malt - businesses previously owned by US food giant, Conagra, and South Africa's Tiger Brands.
The remaining 40pc of Bairds Malt was added to the package in 2007, giving the group, now to be know as GrainCorp Malt, revenues of about $400 million and malt throughput capacity of one million tonnes a year from 14 plants.
GrainCorp Malt's business division will be headed by former UMH chief executive officer, Jim Anderson.
But to ensure the brand strength of the four companies was maintained and strong relationships with customers and suppliers were fostered,
Mr Irwin said the individual brand names and brand identities of the four malt businesses will be retained and promoted.
This was particularly important in building confidence with barley growers, he said.
To complete the UMH buy up, GrainCorp has just raised around $600 million through the issue of new shares at $6.50 each.
Eligible shareholders were offered nine new shares at $5.65 for every 10 GrainCorp shares held, with 58 per cent of retail clients and 95pc of institutional clients taking up their entitlement.
About 47 million new shares were added to GrainCorp's register last week.
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