GrainCorp demerges into two companies

An Australian grain trader GrainCorp announced its intention to demerge its global malting business. The proposed demerger would result in two independent ASX-listed companies — MaltCo and New GrainCorp.

GrainCorp CEO, Mark Palmquist, said: “Our Portfolio Review made clear that these businesses have different characteristics and would benefit from operating separately. A demerger would provide both MaltCo and New GrainCorp with increased flexibility to implement independent operating strategies and capital structures and allow them to attract investors with different investment priorities.”

MaltCo will be the world’s fourth largest independent maltster with malting houses in the United States, Canada, Australia, and the United Kingdom. MaltCo also operates Country Malt Group, a leading craft malt distribution business in North America. In FY18, MaltCo generated EBITDA of USD 170 million.

New GrainCorp will be an integrated global agribusiness with grain handling, storage, trading and processing operations in Australia, New Zealand, North America, Asia, Europe and Ukraine, focused on grains, oilseeds, pulses, edible oils and feeds. New GrainCorp’s storage and logistics infrastructure assets comprise 145 country receival sites, with 20 million tonnes of storage capacity and seven bulk grain export terminals. The assets comprising New GrainCorp generated FY14-FY18 average EBITDA of ~$125 million before corporate costs.

In July 2018, GrainCorp opened a trading office in Kyiv, Ukraine, consistent with the business’ strategy of diversifying its grain and oilseeds origination footprint.