PERTH: Buderim Group Limited (Company) has received an indicative, non-binding offer from Global Foods Group Pty Ltd to acquire company’s combined ginger and tourism business assets (Ginger Division) for $8.3 million gross value.

Buderim’s strategic focus is on consolidating the group’s global leadership position in food markets in which it chooses to operate, and new markets where there is strong consumer demand. These markets currently include the confectionery ginger, premium macadamias, branded specialty food products and agri-tourism in support of these markets.

The Company announced in 2018 that it would conduct a strategic review of its Ginger Division. The purpose of the strategic review was to identify growth opportunities in the ginger business (particularly for ginger products), the cost of pursuing those opportunities (including capital expenditure requirements) and whether there were potential alternatives to that use of capital that could better enhance shareholder value. The review also considered an orderly realisation of the Ginger Division assets.

Based on the market feedback, the Company has decided to engage with Global Foods on a non-exclusive basis and to provide due diligence access and commence negotiations of definitive legal agreements to implement the Proposed Transaction, subject to receipt of a superior proposal.

Announcing the Proposed Transaction, Chairman Guy Cowan said: “The Ginger Division has been the origin and heritage of the Company and while over the last three years the Board has worked together with management to return the Ginger Division to profitability, we believe that by separating the Macadamia and Ginger businesses there is a better future for both organisations.

“During its next phase of growth, the Ginger Division will require significant capital investments to continue its proud and long history.  “At the same time, following the strategic review, the Board believes that the Company’s macadamia business has an opportunity to become a dominant brand on a global scale. Achieving this will require much focus and we believe this pruposal is in the best interest of all shareholders.

“Focusing investment in the Company’s macadamia business is more likely to produce higher returns than a comparable investment in the Ginger Division. Accordingly, while the Ginger Division has returned to profitability, there are few synergies with the macadamia business. Ginger’s future growth and pathway to improved realms lie therefore with an owner that can provide the investment to make it happen.

“We are therefore pleased to have received an attractive offer for the ginger business from Global Foods. Mr George Vasili, the principal shareholder of Global Foods, is a long-term supporter of the Company, and has a relevant interest of 15.86 percent in the Company’s share capital.

“Following the Proposed Transaction, George has indicated to us that he intends to invest materially in the Ginger business in its new form as a privately-run business, to grow and expand that business with a view to ensuring its longevity well into the future,” said Mr. Cowan. George Vasili, Executive Chairman of Global Foods, said “As a long-term substantial shareholder in the Buderim Group, I support the proposed new direction contemplated by the Board and I intend to remain a shareholder in the Buderim Group.

“Global Foods is a successful Australian family owned and operated food importing and processing business that has great synergy with the Ginger Division. We are in a unique position to invest the required capital and expertise to enable the Ginger Division to continue into the future and for the Company to profitably grow with a renewed focus on the macadamia business”.

Mr. Cowan said that on successful completion of the demerger, the Company would concentrate on becoming a dominant player in branded macadamia products, and explore other potential opportunities in health and plant based protein food product markets. “To reflect this new focus, as part of the approvals required to implement the Proposed Transaction, the Company intends to seek shareholder approval to change its name to Health and Plant Protein Ltd’ (HPP),” said Mr. Cowan.