Working with knowledge
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info exchange
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What's NewS Issue 2 March 2000 "J
One of the buzz words for Rl in recent years has been 'knowledge-driven', but
what do we actually mean by that? Around the network, we have a number of
people who are acknowledged experts in their field. One is Gordon Butland for
the poultry sector. We wanted to find out how this expertise works in practice
and in the process found a fantastic M&A deal done by our people in Sydney with
Butland's support.
Major change
Ambitious plan
Obviouscredentials
Integral player
k
Exceptional deal
Think big was
clearly the buzz W - -JfiB
word for Elise Taylor,
Tim Mahony, Jim
Swinburne of our X
Sydney office when
they started talking to ^H
Bartter Enterprises Hl
about growth opportu- ^H^|
nities. In a unique
departure front the
more usual M&A deal,
which big player
takes over a smaller
one, Bartter with our support actually
turned the tables and acquired a much
larger company in its core poultry
business. Now the deal has been closed,
and Bartter insists that they couldn't have
done it without us.
As always with great deals (and usually
even more so with the ones that got
away), there is more to the Bartter-
Steggles transaction than a simple acquisi-
tion. To understand the impact of this
deal you have to know a lirtle about the
industry in Australia and about our role
as a dedicated F&A player. According to
Taylor, the Australian poultry industry has
undergone major technological and
structural changes in the last 10 years.
'We've seen this sector expand front a
virtually backyard type of operation to a
highly capital-intensive business. These
changes helped Bartter progress rapidly
from a table egg operation to the only
vertically integrated processor in the
Australian market.'
Obviously, this rapid evolution did not
escape the notice of the two biggest
Turning the tables in Australian poultry. The
deal team: Jim Swinburne (left), Tim Mahony,
Elise Taylor, and Ab QiHhaus. Unfortunately,
Gordon Butland was on his travels by the time
the picture was taken....
players - Steggles and Inghams. Steggles
was owned by the Goodman Fielder
Group (GF), but wasn't performing to
potential, although it did rank number
two in the sector. In 1998, GF suggested
merging Steggles with Bartter but was
declined. But it started Bartter thinking
and they came up with an ambitious plan
to acquire Steggles - GF agreed in prinei-
ple, but creative financing was needed
to transform an aspiration into a done
deal. This is where Taylor and the team
along with sector specialist Gordon
Butland came in.
'Front the very beginning, Rabobank was
seen as a key component in this transac
tion,' confirms Taylor. 'Basically, the
company acknowledged that it we didn't
participate, then it wouldn't happen.' The
addition of sector specialist Gordon
Butland to the already strong team was,
she says, essential at a number of levels.
'As an expert, Gordon was able to bring a
considerable antount of credibility to the
table. Bartter's management valued
working with someone who had such ob-
vious credentials in the market - the cliënt
didn't have to waste energy in a very tight
time environment explaining how their
business works. Gordon's support in the
transaction process reassured the cliënt
that their assumptions and projections
were valid.'
In addition, Butland's expertise
was also solicited by the cluster of
tier I banks, including BNP, Bank
of Western Australia and Colo-
nial State, that participated in the
ensuing syndication - which was
also Rabo Australia's first as lead
manager. Once the deal was
closed, Butland has continued
to support Bartter and it appears
likely that he may be involved as
a consultant in the future, thus
further establishing Rabobank
as an integral player in the company's ac-
tivities. Says Butland, 'The combination of
effective banking and other assistance,
together with indepth knowledge of the
industry, diversifies our role as a bank. We
believe this is what makes RI unique, and
the cliënt clearly appreciates the fact that
one institution can provide all its needs.'
Although this particular deal was finalized
some time ago, the Sydney team is still
buzzing, not least because it represented
something of a milestone in the market.
The acquisition of Steggles meant farnily-
owned Bartter moved into the second slot,
increasing its market share from 8 to
30%. It is now only around 2% behind
the leader, Inghams. But in the meantime,
Bartter is working to apply its lowest cost
producer expertise to the Steggles opera
tion to achieve substantial synergies and
introducé its culture.
The Rabobank team - including financial,
legal and sector specialists - which worked
with Bartter to achieve this exceptional
deal believes 'that this transaction has
changed the nature of the industry in
Australia'. Concludes Elise Taylor,
'and we were very much an integral part
of that change.'
