Herbert Smith Freehills has advised Murray Goulburn Co-operative Co. Limited (Murray Goulburn) on the implementation of a transformative new capital structure and successful A$500 million capital raising (Capital Structure).

Murray Goulburn is Australia’s largest dairy foods company, supplying dairy foods and products domestically and internationally with its flagship Devondale, Liddells and Murray Goulburn Ingredients brands. 

Murray Goulburn’s new Capital Structure involved the establishment of a unit trust (MG Unit Trust), a special purpose funding vehicle, which listed on the ASX on 3 July 2015. The initial public offer (IPO) of units in the MG Unit Trust raised A$437.7 million, with an additional A$62.3 million raised through two supplier share offers in Murray Goulburn.

The funds raised by the MG Unit Trust have been invested into Murray Goulburn to provide unitholders with an economic exposure to Murray Goulburn equivalent to the economic exposure of shareholders in Murray Goulburn. The Capital Structure includes a profit sharing mechanism which aligns the interests of suppliers and unitholders, with each benefitting from an increase in milk prices. Following the IPO Murray Goulburn remains 100% dairy farmer owned and controlled.

The Capital Structure also involved the establishment of a Shareholder Trading Platform (STP), a private trading platform allowing Murray Goulburn’s shareholders to buy and sell their shares at the prevailing unit market price.

The funds raised will be used to invest in key projects to achieve Murray Goulburn’s growth and value creation strategy of delivering world leading manufacturing and supply chain capabilities to better connect with domestic and international customers.

The implementation of the Capital Structure was two years in the making and highlights the strength of Herbert Smith Freehills’ market leading corporate and equity capital markets team and its broader capabilities. Melbourne based partners Tim McEwen and James Crowe led the transaction. Tim and James were supported by senior associate Nick Golding and solicitors Peter Moh and Lauren Faba and Executive Counsel, Marita Batty, as well as a number of other specialists, including head office advisory experts Stefanie Wilkinson and Amy Henderson, banking experts Daniel Brealey, Jon Evans and Tim Monahan and financial services experts Ewan MacDonald and Jim Graham.

Tim McEwen said, “We are delighted to have been involved in such an innovative, complex and transformative transaction. It was a pleasure to work with such a dedicated and passionate team at Murray Goulburn who were so committed to ensuring that the company has the opportunity to continue to grow for the benefit of its suppliers, investors and the Australian dairy industry.”

James Crowe said, “We wish Murray Goulburn every success as it operates under its new capital structure and look forward to continuing to work with them as a key client and important player in the Australian and international agribusiness sector.”

Macquarie Capital (Australia) Limited acted as Sole Lead Manager of the capital raising and Macquarie and Lazard Australia acted as financial advisers to the Capital Structure.