A mid Wales agricultural company has completed a multi-million pound deal to acquire a poultry feed firm.

The Wynnstay Group, which is based in Llansantffraid, has bought poultry feed supplier Humphrey Feeds and its associated business, Humphrey Pullets Ltd, for £9.5 million.

The company says the acquisition will be earnings enhancing and extend its geographic reach.

Gareth Davies, chief executive of Wynnstay Group PLC, said: “We believe that this will be an excellent acquisition for Wynnstay. Humphrey is a long-established, family-owned business, with an 85-year history, which prides itself on ‘advancing poultry performance’.

"It makes a highly complementary addition to the group and should be capable of being readily integrated.

“The acquisition will significantly extend our trading footprint in the south of England, enlarge our market share of poultry feed, a key target sector for us, increase our feed manufacturing capacity, and bring additional farmer customers.

Humphrey Feeds and Pullets is based in Hampshire and was established in 1932.

It supplies poultry feed, and point-of-lay pullets to farmers, mainly in the south of England, and manufacturers in the region of 110,000 tonnes of poultry feed annually from a facility in Twyford, Hampshire, as well as having an unused facility in Calne, Wiltshire, which is set to be redeveloped as part of the deal.

Mr Davies added: “Looking further out, with the redevelopment of the Calne manufacturing facility into a ruminant as well as poultry mill, there is scope to drive additional significant long-term trading benefits.”

A deferred consideration of up to £2m may become payable dependent on the achievement of certain performance targets, a spokesperson for Wynnstay added.

In order to fund the acquisition, the company is entering into a new £12.5m revolving credit facility.

In the year ended February 28, Humphrey generated revenue of £39.5m and an adjusted pretax profit of £1.2m.

The business will continue to operate as Humphrey Feeds and Pullets, now as a subsidiary of Wynnstay Group Plc, with Neil Richardson remaining as managing director and Martin Humphrey continuing in the role of sales director.

Mr Richardson said: “There will be no change in the day-to-day operation and management of the business, and customers will see no change in the excellent products and service they provide, it is very much ‘business as usual’.

"We will continue to operate out of Twyford in Hampshire, with the manufacturing of feed continuing until the Calne site is fully redeveloped, to a state-of-the-art facility, which is anticipated being fully commissioned in 2024.”

Mr Humphrey added: “The poultry sector continues to consolidate with the increased demands of retailers and packers. Therefore, it is essential we continue to develop as a business, ensuring we invest in new technology, product development and operational efficiency, to achieve this we require a like-minded investor.

"As a subsidiary of Wynnstay Group Plc, we will be able to capitalise on the strengths of both businesses and further strengthen our brand, ensuring that we remain a market leader for advanced poultry performance, for many years to come.”

The deal was facilitated by the team at HSBC UK.

Sian Williams, relationship director at HSBC UK, commented: “A major contributor to the economy, poultry makes up half of the meat consumed across the UK.

"We’re delighted to provide Wynnstay with funding to enable this strategic acquisition, increasing its geographic footprint and production capacity in this important part of our agricultural economy.”