GrainCorp has entered into a $350 million deal to sell its bulk liquid terminals business.Credit:Rob Homer
It now faces a deadline because the $350 million sale is subject to certain conditions,including that GrainCorp not enter into a change of control transaction,or alternative material transaction before May 10.
The $350 million deal under which GrainCorp would sell its bulk liquid terminals business to privately-owned business ANZ Terminals (the business is not associated with ANZ Bank) also remains subject to approval from the Foreign Investment Review Board and Australian Competition and Consumer Commission.
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GrainCorp said the $350 million price represented a multiple of about 13 times of its Australian Liquid Terminal's business earnings before interest,tax,depreciation and amortisation (EBITDA) forecast for fiscal 2019.
The liquids include canola oil,sunflower oil and other agri commodities,as well as chemicals,petroleum and hydrocarbons.
GrainCorp signalled on Monday that the liquid storage business had evolved substantially in recent years and was increasingly storing chemicals and petroleum,and that the growing emphasis on this sector meant that the operations had become non-core.
A spokesman for LTAP declined to comment on the deal. LTAP has been doing due diligence since December,but is yet to make a final offer for GrainCorp.