Agreed, this has nothing to do with capturing the manufacturing margin and is all about the politic's, namely supporting their key distribution partner in China by paying a premium for a loss making asset. I mean an EV of $385mil for a build of ~$250mil dryer with all the bells and whistles to make infant formula but its basically only doing commodity powder? MVM was bleeding money and if CAHG needed out then they would have been lucky to sell a chunk at $200-$250mil EV... luckily they had an opportunity to turn the screws on a strategic partner.
Yes, well aware that A2 has the volumes re infant sales to make this less of a dog... but operating an infant dryer is not an easy gig, this will drag on their profits and A2's EPS growth for the next 5-7years.
I love this company, it's a fantastic NZ success story and I truly hope one day they attain a similar standing to Danone or Nestle... but I believe they could have gone about this in a better way.
Agreed, this has nothing to do with capturing the manufacturing...
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