TasFoods Limited has reached an agreement to acquire the business assets of Redbank Poultry, a broiler and breeder facility located in northwestern Tasmania, Australia.
Upon completion of the acquisition, Nichols Poultry and Nichols Hatchery – two separate TasFoods subsidiaries, will form a vertically integrated poultry business, supplying chicken to the Australian market.
Redbank Poultry was established in 1986 to provide broiler chicken stock to Nichols, and is currently the sole supplier of day-old chicks to Nichols, Redbank’s exclusive customer.
TasFoods, in a filing with the Australian Securities Exchange, stated that purchasing Redbank Poultry is part of the process for Nichols to become a fully integrated poultry business, enhancing TasFoods’ supply chain security.
The planned purchase price is AU$1.25 million for the plant, equipment and associated assets, plus AU$1.1 million for the final valuation of inventory at completion. TasFoods will primarily use funds it obtained from the Betta Milk/Meander Valley Dairy sale to fund this acquisition. The company has also entered into a short-term financing agreement for the remainder of the needed funding.
In addition to the acquisition deal, TasFoods entered into a five-year lease agreement for the growing sheds and associated infrastructure.
Current employees will be transferred to TasFoods entities.
