Under the deal, Australian Dairy Farms will obtain stock necessary for ongoing trade and the intellectual property of Flahey’s Nutritionals for the launch of a new range of infant formula products.
Flahey’s Future contains essential vitamins, minerals, protein, carbohydrate fats, and pre-biotic fibre and is said to be relatively new to the Australian market.
The product is gradually expanding its presence in the market and is currently available in major retailers across the country, including Chemist Warehouse, Chemist Outlet, Blooms the Chemist, Priceline, Soul Pattinson, and Pharmacist Advice stores.
As part of the deal, Flahey’s Nutritionals principal Chris Flahey will join the Australian Dairy Farms as sales and marketing director, and will hold responsibility for the execution and transition to a fully branded business.
Flahey’s Nutritionals is also developing a wide range of infant formula products.
For this acquisition, Australian Dairy Farms has agreed to pay A$1.5m ($1.09m), which includes A$400,000 ($291,280) cash and 6,875,000 AHF-stapled securities in four tranches.
Australian Dairy Farms CEO Peter Skene said: “Bringing Flahey’s Nutritionals into our company is a major further step in Australian Dairy Farms Group’s overall strategy of transitioning from a conventional basic producer of low-value products to a premium-differentiated branded business.
“The acquisition represents the first step for us in entering the organic formula market. The organic market is less inclined to be affected by commodity pricing.”
Skene further added that the company is planning to enter the Chinese market in the future.
The sales of infant formula in the country are growing at 9% per annum, while the organic infant formula sales are growing at 46% per year.
