SYDNEY: TasFoods Ltd has successfully completed its due diligence to acquire the milk processing assets and brands of The Betta Milk Co-Operative Society Limited. The cost of the acquisition will be approximately $11.2 million in cash.
TasFoods will launch its previously announced non-renounceable rights issue at an issue price of $0.12 per new fully paid ordinary TasFoods share to raise approximately $8 million on Thursday, 20 June 2019. The proceeds of the offer will be used to partially pay for the Acquisition, as well as to fund the costs of the Rights Issue.
The acquisition of Betta Milk’s milk processing assets (and brands) will strengthen TasFoods’ existing dairy business and is expected to lead to significant revenue opportunities and operational synergies. [the_ad id=”31605″]The acquisition will add to TasFoods’ expected positive EBITDA from existing operations in FY2019. Betta Milk, established in 1956, processes approximately 10 million litres of milk each year and has market shares of 17% of Tasmanian fresh milk sales and 37% of branded milk sales.
In FY2019,the Betta Milk business is expected to deliver net sales revenue of approximately $16.7million and a normalised EBITDA of approximately $800,000 before synergy benefits and growth opportunities are realised, excluding one-off integration costs.