Canadian firm Saputo has entered an agreement to acquire the Speciality Cheese Business of Lion-Dairy & Drinks in Australia for A$280m ($197m).

Lion-Dairy & Drinks is a subsidiary of Japanese company Kirin.

The Speciality Cheese Business operates two manufacturing facilities located in Burnie and King Island, Tasmania, with a workforce of nearly 400 people.

As per the terms of the agreement, the purchase price will be paid by Saputo using cash on hand and available credit facilities.

“For the 12-month period ended on 31 December 2018, the business generated revenues of approximately A$192m (C$135m).”

The Specialty Cheese Business is engaged in the production and distribution of a range of speciality cheeses under various Australian brands, including South Cape, Tasmanian Heritage, Mersey Valley and King Island Dairy.

For the 12-month period ended on 31 December 2018, the business generated revenues of approximately A$192m (C$135m).

The acquisition of the Specialty Cheese Business is expected to further enhance Saputo’s Australian Dairy Division, as well as diversify its product offering by adding and complementing its current activities.

Completion of the deal is subject to foreign investment approval and clearance by the Australian Competition and Consumer Commission. It is expected to take place in the second half of this year.

In May last year, Saputo acquired the activities of Australia’s Murray Goulburn (MG).

The transaction was announced in October when Saputo agreed to acquire the Australian co-operative for C$1.29bn ($1bn) on a debt-free basis.

MG is engaged in the production of a wide range of dairy foods, including cheese, butter, milk powder, dairy beverages and a portfolio of ingredient and nutritional products, such as infant formula.