Australia’s TasFoods has bolstered its supply chain security through the acquisition of Redbank Poultry in Tasmania, as announced by the company.
TasFoods is set to invest A$1.3 million ($841,025) in acquiring Redbank Poultry’s plant, equipment, and assets, with an additional A$1.1 million allocated for the purchase of its product inventory. The company, located in north-west Tasmania, is actively involved in poultry rearing and supply.
In a filing with the Australian Securities Exchange on December 18, TasFoods said it would finance the deal with the A$11 million raised in August from the sale of the Betta Milk and Meander Valley Dairy brands to the Bega Group.
Redbank Poultry was acquired by the company’s wholly-owned subsidiary, Nichols Hatchery, operating within the Nichols Poultry business unit, which supplies 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.
“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 specific 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 projected 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.
In the first half, Nichols Poultry recorded revenue of A$22.4 million, marking a 17% growth compared to the corresponding period.
The TasFoods group reported revenue of A$38.2 million, reflecting an 11.8% increase. The dairy segment contributed A$15.5 million, representing a 5% rise compared to the previous year.
EBITDA shifted to a profit of A$1.1 million from a loss of A$1 million. Net income losses reduced to A$3.8 million from a A$5.4 million loss.