The co-op confirmed that it reached agreement with Donegal Investment Group plc to acquire Robert Smyth & Sons Limited, which trades as Smyths Daleside Animal Feeds.
On completion of the deal, Fane Valley will pay Donegal €17.25m (US$19.47m) in cash for the business. Smyths recorded a turnover of €35.5m and profit before tax of €1.9m in the year to end of August 2018.
Smyths supplies branded and non-branded feed products for the ruminant and monogastric sectors across the north and northwest of Ireland. It will continue to trade under the Smyths Daleside name after the acquisition, and day-to-day operational responsibility will remain with local management and staff.
Fane Valley, as part of the deal, also acquires a Smyths' subsidiary business, trading as Burke Shipping Services Ltd, which is located in Lisahally Port and provides port agency, warehousing and customs clearance services to clients in respect of imports and storage of agricultural raw materials, coal, glass and other bulk cargo materials.
Trevor Lockhart, CEO, Fane Valley Group, said the acquisition, which is subject to approval from Ireland’s Competition and Consumer Protection Commission, presents an opportunity for the co-op to extend its catchment area for the supply of animal feed products and nutritional services. It also demonstrates its commitment to the future of livestock production in the region, he said.
Fane Valley, which supplies dairy, beef, sheep, pig and poultry feed, has a feed production site in Newry; a significant refurbishment of that facility in 2014 allowed for higher throughputs. In 2010, Fane Valley invested £18m in a new feed mill in Omagh, in Tyrone.
March this year also saw that Northern Irish co-op buy Irish duck producer, Silver Hill Foods, based in Monaghan. It had an existing relationship with the premium duck producer in that it has been its duck feed supplier for 20 years.
Silver Hill Foods produces ducks, largely for export markets in the UK, the EU and Asia. Fane Valley said the Irish company's management would stay in place.