Australia’s TasFoods has agreed to sell its Pyengana Dairy business as part of a previously announced strategy to strengthen its presence in poultry processing.
The artisan cheese business will be sold to Research Corporation Pty Ltd. and Associates, which includes the MSC ATF AgFood Opportunities Fund, a TasFoods’ shareholder.
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In a stock exchange filing today (25 September), the group, which is also involved in pet-food production, said the sale proceeds will be used to pay down debt.
The transaction is valued at A$2m ($1.3m), including A$1.7m in cash and up to A$300,000 in TasFoods’ shares held by AgFood, plus inventories.
TasFoods added that some of the proceeds will be used to “strengthen” its poultry supply chain.
“It is our view that the divestment of Pyengana Dairy to Research Corporation Pty Ltd and Associates provides the premium brand and artisan award-winning products with the best possible opportunity to achieve its full potential of scaling-up under new ownership as part of the business unit’s growth strategy nationally and into export markets overseas,” TasFoods said in the filing.
The move finalises a process that began in August following a strategic review by the company.
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By GlobalDataAcquired in 2017 to diversify TasFoods’ portfolio, the company said at the time that the “current company structure is not the appropriate vehicle to develop and scale up” the cheese business. A sale would give Pyengana Dairy “the best possible opportunity” to expand under new ownership in domestic and export markets, it said.
TasFoods added today that it had received no other expressions of interest or further offers aside from Research Corp. and AgFood.
The transaction is subject to shareholder approval, with an extraordinary general meeting (EGM) to be scheduled in the coming weeks, likely in November.
TasFoods will continue to manage Pyengana Dairy under a paid monthly services agreement with the new owners to ensure operational goals are achieved and to assist with its growth plan.
Post-transaction, Research Corporation Pty Ltd and AgFood will collectively retain 12.94% of TasFoods shares, the filing confirmed.
