ICONIC Western Australian food manufacturer Mills and Wares has been sold to Sydney company Keith Harris & Co for about $10 million in cash.
The sale is part of a succession plan for Perth’s Bailey family, which has owned the Bailey Bakery business since 1984 and bought Mills & Wares from Arnott’s in 1992.
As part of the succession plan, Terry Bailey will continue as general manager of Mills & Wares’ WA operation while Alex and Scott Bailey will be offered positions within the business.
The value of the acquisition was not disclosed, however Keith Harris & Co said it would undertake a share placement to raise $10.5 million.
"The funds raised will assist with the purchase of Mills & Wares," it said in a statement.
Mills & Wares was established in 1898 and has become a well-known market leader in the manufacture and sale of cakes, biscuits, dessert and puddings.
As well as selling across Australia, primarily through supermarkets, Mills & Wares has also moved into the export trade.
Mills & Wares is the second major acquisition in the past year by Keith Harris & Co, which purchased 63 per cent of Adelaide baking business Balfours last December.
Keith Harris director Don Taig said the result would be a distinctly Australian, broad based national bakery business.
"In South Australia and Western Australia, Balfours and Mills & Wares respectively have achieved iconic status but pursued greater manufacturing efficiencies and looked to larger markets," Mr Taig said.
"Their respective expansion into the national market is what attracted our attention."
In the six months to January 31 2004, Keith Harris & Co nearly doubled sales to $25 million.
However, it incurred a loss of $188,000 compared with a profit of $1.4 million in the previous corresponding period.
The company says this reflects the seasonal nature of Balfours’ earnings and higher than expected start-up costs of a new Indonesian flavour and fragrance joint venture.
Keith Harris & Co is a listed company with the majority shareholding held by diversified investment company Washington H Soul Pattinson.
