- Pure Foods Tasmania (PFT) will purchase the Daly Potato Company for $1.8 million
- Daly Potato Company is a family-run potato business in Marion Bay, Tasmania
- To complete the purchase, Pure Foods will issue shares to the value of $1.4 million, but these will be escrowed in three equal tranches
- The company will also take on approximately $300,000 in debt, which Daly Potato currently holds
- It will also pay the Daly family $100,000 in cash during settlement
- This settlement is expected to complete by October 30, however, the company believes it will be completed before this
- On the market this afternoon, Pure Foods Tasmania is up 1.68 per cent and is trading for 60.5 cents per share
Pure Foods Tasmania (PFT) will purchase Daly Potato Company for $1.8 million.
The purchase will be made through a mixture of cash and shares and is subject to a number of conditions, including final due diligence.
Additionally, Pure Foods has agreed to an additional investment to support ongoing product development.
To complete the purchase, Pure Foods will issue the shares to the value of $1.4 million, but these will be escrowed in three equal tranches and released over intervals of 12, 24 and 36 months.
The company will also take on approximately $300,000 in debt which Daly Potato currently holds— primarily accrued from the business' main plant and equipment costs. Pure Foods will also pay the Daly family $100,000 in cash during settlement. Pure Foods has also offered Susie Daly a minimum three-year employment contract.
An additional payment of $250,000 is required to support the launch of new products.
The 'sunset' clause for the settlement is October 30, however, the company believes the deal will be completed before this.
Daly Potato Company
The Daly family has been growing potatoes in Tasmania for over 30 years. Situated in Marion Bay, Pure Foods says the farm boasts the perfect conditions for growing the staple vegetable. In 2019, the Daly family was crowned 'Farmers of the Year.'
The Daly Potato Company was founded in 2016 by Gerard and Susie Daly, with a view to add value to their potato farm. Their daughter, Ruby, produces vodka using unmarketable potatoes, under the brand name Hellfire Bluff.
The company produces premium potato salads which are sold under major supermarket chains like Woolworths, Coles and Metcash.
Over the 2017 financial year, sales topped $211,000; they've since grown to $2 million.
On the market this afternoon, Pure Foods Tasmania is up 1.68 per cent and is trading for 60.5 cents per share at 12:50 pm AEST.