Shares in hay supplier Wingara Ag have soared more than 25 per cent after the company struck a deal that will almost double its production capacity.
Wingara said the acquisition of a controlling stake in Pyrenees Hay Processing Co-operative. would increase capacity from 50,000 metric tonnes a year to more than 90,000 MT.
The investment in Pyrenees Hay, which includes the acquisition of assets and capital expenditure set aside for plant and storage improvements, will be $5.5 million.
Pyrenees Hay is located in Avoca, Victoria, and grows, processes and exports premium quality Australian oaten hay.
It is located 100 kilometres south west of Wingara Ag's existing facility in Bendigo.
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Wingara said the acquisition would improve its security of supply and broaden the company's product base by adding large bale size to its product line.
" The proposed acquisition will expand Wingara's reach of high-quality oaten hay across northern and w estern Victoria," it said.
Wingara expects to produce 12,500 to 15,000 MT at Pyrenees Hay in the coming 2016/2017 season.
Combined, Wingara and Pyrenees Hay hope to sell 37,000 to 42,000 MT in the 2016/2017 season, which Wingara says will increase group earnings.
Shares in Wingara gained seven cents, or 28 per cent, to 32 cents.
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