Milk producer Wattle Health Australia Ltd. has reached an agreement to amend the structure of its acquisition of infant dairy products maker Blend and Pack Pty. Ltd. from Hong Kong-based Mason Group Holdings Ltd.
Wattle Health already has a 5% stake in Blend and Pack and is proposing to acquire 75% of the business, raising its ownership to 80%.
Under the amended deal, Wattle Health will pay Mason up-front cash of US$10 million, issue US$15 million worth of fully paid ordinary shares in Wattle Health at an issue price of 40 Australian cents apiece, and make a deferred payment of US$30 million over a five-year period with an interest rate of 3.33%.
In the previous agreement, Wattle Health agreed to an up-front payment of US$30 million and a deferred payment of US$25 million to Mason.
The Australian company said its board believes the new structure of the transaction terms will lead to a better outcome for shareholders as it is still for the same consideration of US$55 million but requires less cash payment up-front. Mason agreed to take equity for a portion of the up-front payment in the form of voluntary escrowed Wattle Health shares.
The deal is subject to shareholder approval, with the deadline set for Feb. 29.