Famous Australian food brand SPC is writing the next chapter of its remarkable story as it targets new local and overseas markets on the back of dynamic leadership and smart financing.
The growth plans of fruit and vegetable processor SPC will warm the hearts of many Australians who grew up eating the company’s much-loved canned baked beans, spaghetti and tomatoes.
Based in the Goulburn Valley region of Victoria since 1917, the iconic brand has a new ownership team with plans to turn SPC into a global food company after buying it from Coca-Cola Amatil in June 2019.
In early 2020, the COVID-19 pandemic led to a surge in orders from Woolworths, Coles and other outlets for its canned and packaged-food products.
Shepparton Partners Collective chairman Hussein Rifai says the SPC team is well placed to deliver for Australians.
“We’ve been absolutely running crazy 24-7 trying to accommodate the demand,” Hussein says. “We’re here to serve Australia. That’s our community, that’s our family.”
Done deal
Shepparton Partners Collective is a joint venture between Perma Funds Management and private equity firm The Eights.
Hussein says the new ownership team understands the growth potential of SPC and has the skills and ambition to unlock trapped value in the business. “Right now we see great opportunities,” he says.
SPC chose to work with ScotPac to help capture these opportunities, and one of the smart choices SPC made to secure its financial future has been to leverage the value of its plant equipment and receivables’ ledger using ScotPac Debtor Finance and Asset Finance.
On the back of a leveraged buyout financing deal involving Perma Asset Management, The Eights, finance broker Lumley Finance & Loans and ScotPac, SPC now has the financial security to put its expansion plans into practice.
Lumley Finance & Loans Director Justin Hatfield is an expert in business finance and has advised so many Australian medium-sized enterprises on the best way to fund growth. He recommended ScotPac as a financial partner for the transaction because of its trusted products and proven record over 30 years.
“I defer to ScotPac as far as those buyout transactions are concerned,” he says. “Their team are at the top of their game, so that makes life a lot easier.”
Reflecting on the SPC deal, Justin says complex transactions demand strong financial skillsets and the ability to understand the real requirements of each business. It is often hard these days”, he says, “to find bankers with a strong understanding of debtor finance and balance sheets. But ScotPac is able to train their people to understand that.”
Hussein says SPC asked a lot of ScotPac during the takeover phase.
“We told them that we wanted this whole thing done in an unusually short timeframe, and I thought the answer was going to be ‘go away, you must be crazy’. But they put the pedal to the metal and started working with us 16 hours a day and they instructed the lawyers to run as fast as we could run. On the day of the settlement they were there shoulder to shoulder with us.”
Funding security
ScotPac has come on board to assist with SPC’s everyday financial requirements by providing a multi-million dollar Debtor Finance facility that acts as a line of credit linked to and secured by outstanding accounts receivable, helping to ensure strong cashflow for SPC.
An Asset Finance facility means SPC can leverage the value of hundreds of millions of dollars that Coca-Cola Amatil invested in plant technology and equipment before the sale. “We’re a very asset-rich business and there’s plenty of security there,” according to Hussein.
SPC also recently gained approval for an Export Finance facility, to quickly release valuable working capital from its export activities.
While SPC has experienced some tough times in the past, when it came to providing finance ScotPac understood the value of the business and the brand, including its strong balance sheet and blue-chip clients such as Woolworths and Coles.
ScotPac could see the opportunities that lay ahead. The partnership gives SPC the benefits of the agility of a smaller financier but with the trust that comes from ScotPac having served SMEs for decades. Most importantly, Hussein says in ScotPac the business has a debt-financing partner that understands its goals.
“At ScotPac, the people actually make the effort to understand what you do.”
Hussein said that fruit and vegetable production can be very seasonal, and ScotPac went the extra mile by stepping up to assist SPC with additional funding to help manage this issue. “They went a million miles an hour and came good for us,” he says. “Every single time we have leaned on them they have been there as partners for us.”
Growth on the horizon
With a bright future built around secure cashflow, SPC is an iconic Australian brand that is on track to take its traditional packaged fruit and vegetable products – plus a planned range of ready-to-eat meals and, possibly, chilled or frozen food items – to new Australian and export markets.
SPC is aiming to be the Nestlé of Australia and is delighted that it has found in ScotPac the right partner to fund SPC’s ambitious goals.