Synlait’s Dairyworks divests Deep South ice cream brand to Talley Group

Synlait Milk subsidiary Dairyworks has announced the divesture of its Deep South ice cream brand and associated operations to the New Zealand-based food company Talley Group.

Financial details of the deal have not been disclosed by either company.

The move is said to be part of Synlait Milk’s strategy to streamline its portfolio and primarily focus on its cheese business.

Synlait CEO Leon Clement said: “The decision to divest the Deep South brand and its operations reflects Synlait’s intention to increase value in line with our strategy.”

The deal will be effective from 12 November 2020.

Deep South is more than a four-decade-old company, which was acquired by Dairyworks in 2016.

In March this year, New Zealand’s dairy processing company Synlait received approval from the Overseas Investment Office (OIO) for acquiring a stake in Dairyworks.

Established in 2001, Dairyworks produces cheese, butter, milk powder and ice-cream products at its manufacturing facility in Christchurch, New Zealand.

It offers its cheese and butter products under various consumer brands, including Rolling Meadow and Alpine, which it distributes to supermarkets in New Zealand and Australia.

Dairyworks CEO Tim Carter said: “The sale of Deep South enables Dairyworks to focus on our core business, explore new market opportunities, and deliver strong shareholder value.

“Dairyworks is going through a period of rapid expansion in our core categories of cheese, speciality cheese, yoghurt, and convenience butter.

“While Deep South is a successful part of our current portfolio, ice cream is not our core business. The brand has strong growth potential for business more focused on ice cream.”

Last May, New Zealand-based dairy co-operative Fonterra confirmed the sale of its Tip Top ice cream business to global company Froneri in a deal valued at N$380m ($250m).

Fonterra’s latest move comes as it looks to cut down its portfolio and focus on global markets.