Australia’s TasFoods plans to divest its Pyengana Dairy business to focus resources on strengthening its poultry division.
The ASX-listed poultry, cheese and pet-food group has entered a non-binding option agreement with major shareholder MSC ATF AgFood Opportunities Fund.
In a stock exchange filing today (11 August), TasFoods said the option could see the Pyengana Dairy artisan cheese business sold to the Fund’s AgFood & Associates for A$2m ($1.3m) plus inventory.
The option, which is non-exclusive, allows TasFoods to seek alternative buyers through a marketing programme set to begin today.
AgFood & Associates has also indicated it is open to partnering with other interested parties in Pyengana Dairy, according to the filing.
Acquired in 2017 to diversify TasFoods’ portfolio, Pyengana Dairy has struggled to meet performance targets under the group’s capital management framework.
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By GlobalDataTasFoods added that the “current company structure is not the appropriate vehicle to develop and scale up” the brand. A sale would give Pyengana Dairy “the best possible opportunity” to expand under new ownership in both domestic and export markets, it said.
Sale proceeds would be used to strengthen TasFoods poultry supply chain.
The planned disposal follows a push into poultry with the A$1.3m acquisition of Redbank Poultry in December 2023 via TasFoods subsidiary Nichols Hatchery.
If exercised before mid-September, the Pyengana Dairy transaction is expected to complete by 31 October, subject to shareholder approval in mid-October.
TasFoods will manage the business during the transition under a paid service agreement.
Located in north-east Tasmania, Pyengana Dairy has been producing traditional cloth-bound cheddar for more than 130 years.
TasFoods said it will continue exploring “all possible strategic initiatives including partnerships, increased vertical integration and complementary asset utilisation options” to maximise shareholder value.
The company previously sold its Shima Wasabi spices business to Hillwood Berries in 2023 as part of a brand streamlining exercise.
