Australia’s TasFoods has acquired Tasmania’s Redbank Poultry, a deal the company said will provide supply-chain “security”.
TasFoods is paying A$1.3m ($841,025) for Redbank Poultry’s plant, equipment and assets, as well as a further A$1.1m for its product inventory. The business, based in north-west Tasmania, is engaged in poultry rearing and supply.
In a filing with the Australian Securities Exchange today (18 December), TasFoods said it will fund the deal from the A$11m raised in August from the sale of the Betta Milk and Meander Valley Dairy brands to the Bega Group.
The purchase of Redbank Poultry was carried out through the company’s wholly-owned subsidiary Nichols Hatchery, which sits within its Nichols Poultry business unit supplying chicken under the same brand name.
TasFoods also manufactures cheeses through Pyengana Dairy and in October entered the pet-food category with the launch of the Isle & Sky line of treats for dogs and cats.
“The acquisition of Redbank marks the next stage of our evolution to create a fully integrated poultry business,” TasFoods said.
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“The acquisition of Redbank will enhance TasFoods supply-chain security whilst providing numerous operational elements, including creating an end-to-end poultry agricultural operation through the entire value chain.”
Redbank Poultry’s employees will be retained, although TasFoods did not provide numbers. The acquired business was set up in 1986 and was previously the exclusive supplier to Nichols Poultry.
“The Redbank acquisition will enhance the financial performance and stability of the Nichols Poultry business,” TasFoods added. It is expected to contribute around A$800,000 annually to EBITDA.
“On completion of the acquisition, Nichols Poultry and Nichols Hatchery will form a vertically integrated poultry business supplying premium chicken to the domestic market, significantly improving the foundations of the business for future growth,” TasFoods said.
Nichols Poultry generated first-half revenue of A$22.4m, an increase of 17% over the corresponding period.
For the TasFoods group, revenue was A$38.2m, up 11.8%. The dairy segment brought in A$15.5m, 5% higher than a year earlier.
EBITDA turned to a A$1.1m profit versus a A$1m loss. Losses in net income narrowed to A$3.8m from a A$5.4m loss.