Australia’s TasFoods has announced the acquisition of Tasmania’s Redbank Poultry, a deal that the company believes will bolster its supply-chain security. TasFoods has agreed to pay A$1.3m ($841,025) for Redbank Poultry’s plant, equipment and assets, in addition to a further A$1.1m for its product inventory. The acquisition is expected to provide numerous operational benefits such as creating an end-to-end poultry agricultural operation through the entire value chain.
The company disclosed that the purchase of Redbank Poultry was carried out through its wholly-owned subsidiary Nichols Hatchery, which forms part of its Nichols Poultry business unit. TasFoods affirmed that it will fund the acquisition using the A$11m raised in August from the sale of the Betta Milk and Meander Valley Dairy brands to the Bega Group.
TasFoods also expressed confidence in the ability of the acquisition to enhance the financial performance and stability of the Nichols Poultry business, with an expected annual contribution of around A$800,000 to EBITDA. The company highlighted that the move will create a fully integrated poultry business, supplying premium chicken to the domestic market and significantly improving the foundations of the business for future growth.
Moreover, TasFoods announced that Redbank Poultry’s employees will be retained, with the acquired business expected to enhance the financial performance and stability of the Nichols Poultry business. Redbank Poultry, established in 1986, was previously the exclusive supplier to Nichols Poultry.
In terms of financial performance, Nichols Poultry recorded first-half revenue of A$22.4m, a notable increase of 17% over the corresponding period. This contribution helped push the TasFoods group’s revenue to A$38.2m, representing an 11.8% increase. The company’s dairy segment brought in A$15.5m, 5% higher than a year earlier. Additionally, EBITDA turned to a A$1.1m profit from a A$1m loss, with net income losses narrowing to A$3.8m from a A$5.4m loss.
In conclusion, TasFoods is confident that the acquisition of Redbank Poultry will enhance its supply-chain security and lead to improvements in the financial performance and future growth of its poultry business. This strategic move is part of the company’s efforts to create a fully integrated poultry operation and further solidify its position in the food and beverage industry.
