Tasmanian food company TasFoods has agreed to buy unlisted Tasmanian milk company Betta Milk for $11.5 million in cash.
“This is a transformational acquisition for TasFoods that will enable us to leverage our resources and facilities,” TasFoods executive chairman Shane Noble said on Monday.
“Betta Milk has excess production capacity presenting multiple avenues for growth within Tasmania, other states and export markets.”
Betta Milk has a recently upgraded export-accredited processing facility in Burnie and distribution centres in Launceston and Hobart.
It processes about 10 million litres of milk each year, has a 17 per cent market share of Tasmanian fresh milk sales and made $16.4 million in net revenue last fiscal year.
While little known in the mainland the brand is iconic in Tasmania, and Mr Noble pledged it wouldn’t disappear.
“TasFoods will continue to support the Betta Milk brand in the Tasmania market where it has a strong and loyal following,” he said.
TasFoods will fund the acquisition with cash on hand and an $8 million rights issue at 12 cents per share.
Betta Milk was started as a cooperative by 35 dairy farming families in Burnie in 1956 and is now owned by 70 shareholders – second and third-generation members of those families.
At 1252 AEST, TasFoods shares were up 1.5 cents, or 12 per cent, to 14 cents.