TasFoods, based in Australia, is strategically divesting its Pyengana Dairy business to concentrate on fortifying its poultry division.
The ASX-listed group, which encompasses poultry, cheese, and pet food sectors, entered a non-binding option agreement with its major shareholder, MSC ATF AgFood Opportunities Fund.
According to a stock exchange filing dated August 11, TasFoods will consider selling the Pyengana Dairy artisan cheese business to the Fund’s AgFood & Associates for A$2 million (approximately $1.3 million) plus inventory.
This non-exclusive option empowers TasFoods to pursue alternative buyers. A comprehensive marketing program will commence today.
AgFood & Associates has also expressed a willingness to collaborate with other interested parties regarding the Pyengana Dairy sale, as detailed in the filing.
Originally acquired in 2017 to diversify TasFoods’ offerings, Pyengana Dairy has struggled to meet performance benchmarks within the group’s capital management framework.
TasFoods asserts that the current structure is ill-suited for developing and scaling the brand effectively. A sale aims to provide Pyengana Dairy with “the best possible opportunity” for growth under new ownership in both domestic and export markets.
Proceeds from the sale will be allocated to bolster TasFoods’ poultry supply chain.
This planned divestiture follows TasFoods’ strategic move into poultry, highlighted by the A$1.3 million acquisition of Redbank Poultry in December 2023 through its subsidiary Nichols Hatchery.
If executed before mid-September, the Pyengana Dairy transaction is expected to finalize by October 31, pending shareholder approval in mid-October.
TasFoods will oversee the business during the transition period under a paid service agreement.
Situated in north-east Tasmania, Pyengana Dairy has a long-standing history of producing traditional cloth-bound cheddar for over 130 years.
TasFoods remains committed to exploring “all possible strategic initiatives including partnerships, increased vertical integration, and complementary asset utilization options” to maximize shareholder value.
Earlier this year, the company divested its Shima Wasabi spices business to Hillwood Berries, as part of a brand streamlining exercise.