Donegal to sell milk arm for €21m
Published 01/11/2011 | 05:00
DONEGAL Creameries is to sell its milk processing and retail business in a deal worth up to €21m.
The businesses will be sold to co-op Connacht Gold for €13.5m in cash, with another €7.4m due if the two divisions hit certain performance targets by the end of next year.
The sale comes as little surprise, with talks having gone on since at least late August.
The company also sells farm supplies and general hardware. Last year, the businesses had turnover of €69.3m, with net profits of €1.85m.
The size of the deal surprised some market watchers, who had previously estimated the businesses would be worth between €10m and €13m. In a statement, Donegal's MD Ian Ireland said: "Donegal have been a keen supporter of the need to develop a long-term sustainable future for the dairy industry in Ireland and we believe that the sale of our milk business to our neighbouring milk processor will enhance the future for all stakeholders in our milk business."
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