TasFoods Sells Pyengana Dairy to Focus on Poultry Processing
TasFoods Limited (ASX:TFL) has finalized an agreement to sell its Pyengana Dairy business to Research Corporation Pty Ltd and Associates, including the MSC ATF AgFood Opportunities Fund (AgFood). This move is part of a strategic shift to strengthen TasFoods' presence in the poultry processing sector. The sale follows a strategic review initiated in August.
Details of the Transaction
The artisan cheese business will transfer ownership for a total value of A$2 million ($1.3 million). This includes A$1.7 million in cash and up to A$300,000 in TasFoods shares held by AgFood, as well as the value of inventories. The proceeds from the sale will be utilized to reduce the company's debt with NAB and to bolster its poultry supply chain.
Strategic Rationale and Future Plans
TasFoods believes that the divestment will provide Pyengana Dairy with the necessary resources to scale up and achieve its full potential under new ownership. The company aims for growth both nationally and in export markets. The sale agreement finalizes a process begun earlier this year. TasFoods had acquired Pyengana Dairy in 2017 to diversify its portfolio.
Shareholder Approval and Operational Continuity
The transaction is contingent upon TasFoods shareholder approval, which will be sought at an Extraordinary General Meeting (EGM) to be scheduled in the coming weeks, likely in November. Post-transaction, Research Corporation Pty Ltd and AgFood will collectively retain 12.94% of TasFoods shares. TasFoods will continue to manage Pyengana Dairy under a paid monthly Services Agreement with the new owners, ensuring operational goals are met and assisting with the business's growth strategy.
No Other Offers Received
TasFoods has confirmed that it received no other expressions of interest or further offers aside from Research Corporation and AgFood. The company continues to explore other strategic initiatives including partnerships, vertical integration, and asset utilisation and divestment options to enhance shareholder returns.
