Betta Milk, Meander Valley Dairy purchased by Bega Group for $11m
Two homegrown Tasmanian success stories are set to enter the fold of Bega Group, which has become a significant player in the state’s dairy industry since a previous acquisition in 2021. See the businesses that have been acquired.
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Homegrown Tasmanian dairy brands Betta Milk and Meander Valley Dairy are set to be acquired by national dairy giant Bega Group for $11m, under a new plan announced to the stock exchange on Monday.
As part of the transaction, ASX-listed TasFoods Ltd, which acquired Meander Valley Dairy in 2015 and Betta Milk in 2019, would also grant Bega a “perpetual, royalty-free licence” to use the Pyengana Dairy brand – another business in the TasFoods portfolio – for milk and cream products Australia-wide.
The acquisition is conditional on competition watchdog ACCC not objecting to the sale, and the satisfactory transfer of relevant assets, licences, intellectual property, employees and material supply contracts.
The sale price is less than what TasFoods paid for the businesses: it purchased Betta Milk for $11.5m and Meander Valley Dairy for $2.1m.
TasFoods chief executive Scott Hadley said the transaction would allow the company to grow its poultry division, spearheaded by the Nichols Poultry brand, and Pyengana Dairy’s premium cheese business.
“It is pleasing that Bega, an iconic Australian company with a strong heritage in both the dairy sector and Tasmania, has chosen to add Betta Milk, Pyengana milk and Meander Valley Dairy to its stable of brands,” Mr Hadley said.
“We are confident that the Betta Milk and Meander Valley Dairy business, its customers and employees will continue to thrive under the custodianship of an equally proud, Australian-owned group in Bega.
“The transaction allows us to sharpen our focus on delivering organic growth across Nichols Poultry and Pyengana cheese, while continuing to identify and evaluate strategic and financially compelling opportunities in adjacent, high-growth food and beverage sectors to create sustainable value for our shareholders.”
Bega chief executive Pete Findlay said the company was “delighted” to add the new Tasmanian brands to its portfolio.
“We recognise the quality in the Betta Milk, Meander Valley Dairy and Pyengana milk brands,” he said.
“Betta Milk is a fantastic regional brand that has been a household name in Tasmania for over 65 years and acquiring these brands supports our ambitions to become a great Australian food company.”
Bega’s transaction with TasFoods follows on from its 2021 takeover of Lion Dairy and Drinks, which netted it Hobart’s Lenah Valley processing plant among other national assets.
Shares in TasFoods spiked more than 9 per cent following the announcement, which was also accompanied by the release of its half-yearly financial results.
TasFoods made a statutory half-yearly loss of $3.81m from revenue of $38.2m, an improvement on the comparable results in H1 2022.
Meander Valley Dairy and Betta Milk are not the only brands TasFoods has divested itself of recently.
Shima Wasabi, which TasFoods acquired in 2016, was offloaded to Hillwood Berries for $700,000, resulting in a $1.1m loss on sale.
‘Reset’ for TasFoods after years of unprofitability
TasFoods’ chief executive Scott Hadley says the sale of Meander Valley Dairy and Betta Milk to Bega Group, announced to the stock exchange on Monday, represents a company “reset”.
Money from the $11m sale, should it be approved by competition watchdog ACCC, would be used to pay off TasFoods’ outstanding debt and “reset the balance sheet,” Mr Hadley told the Mercury.
“Then we’ll look at where we go to next.”
TasFoods, founded in 2015, is yet to turn a profit – something Mr Hadley hopes to change under his stewardship.
“With our two main business units, dairy and poultry – it’s well publicised that farmgate milk prices have gone up 30–40 per cent in the last 18 months,” he said.
“With poultry, the main input is wheat, and wheat’s gone through the roof, driven predominantly by the war in Ukraine.
“We’ve done a lot of work to simplify the business, but it does make it challenging.”
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Originally published as Betta Milk, Meander Valley Dairy purchased by Bega Group for $11m
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