Castle Harlan, Champ Complete Sale Of UMH To GrainCorp
Published:16-November-2009
By Staff Reporter
UMH production capacity to increase 14% by early 2011
Castle Harlan, a private equity firm based in New York, and its partner, Champ Private Equity of Australia, have completed the sale of United Malt Holdings (UMH), a producer of malt for the distilling and brewing industries which was acquired by the duo three years ago.
Castle Harlan and Champ sold the company to GrainCorp, a bulk-grain handler and trader in Australia. The price of the buy-out was $655m. UMH is headquartered in Omaha, Nebraska. It has four independently operated malting companies: Great Western Malting in the US, Barrett Burston Malting in Australia, Canada Malting in Canada, and Bairds Malt in the UK.
The two firms had acquired UMH in September 2006 from Conagra Foods, a US-based company, and Tiger Brands of South Africa. The two companies reportedly invested a total of $90.54m in equity, approximately 55% from Castle Harlan Partners, and 45% from Champ.
David Pittaway, senior managing director at Castle Harlan and the firm’s lead negotiator on the UMH transaction, said: “UMH had been regarded as a commodity grain processor, but we transformed it into a specialty processor of malt, producing malt to the exacting specifications of our customers. As a result, UMH became the number 1 or 2 supplier to breweries in quality ratings, and customers were willing to enter into long-term agreements for exactly fulfilling their needs.”
In the UK, Mr Pittaway said, “We changed our focus from large breweries to distillers of scotch whisky, who now account for more than 50% of sales, up from 20% just a few years ago.
“And we are expanding our production capacity, with a new malt house that has come on line in Scotland that was built for the needs of the distilling industry and another under construction in Brisbane that will begin operating next year to meet increased demand from Southeast Asia. The company expects to increase its production capacity by 14% by early 2011.”
