Shares of National Milk Records Plc (ST: NMP) nearly doubled today after Associated British Foods plc (LON:ABF) said it would buy the agricultural information technology service provider.

What does Associated British Foods acquire?

The food processing giant agreed to pay £48 million ($59.7 million) in cash for National Milk Records.

AB Foods hopes the acquisition will enhance its agri-food business. Inside it pers conferenceJose Nobre – Head of AB Agri said:

NMR is a high quality business, complementary and augmenting our dairy strategy. This will enable us to offer products that provide greater value, efficiency and profit to dairy farmers.

AB Agri employs around 3,000 people in 80 countries and works with more than 2,000 dairy farms in the UK. ABF ended mostly unchanged on Tuesday.

What’s up with the National Dairy Records?

The deal values ​​each NMR share at 215 pence, roughly an 87% premium over the previous close. AB Foods estimates this transaction will close in the third quarter of 2023.

The stock news comes about a month after National Milk Records reported a more than 15% increase in its quarterly profit. According to Trevor Lloyd, president of the dairy technology company:

ABF will accelerate and reduce risk to NMR’s ability to realize its strategic objectives, streamlining industrial processes to ensure UK dairy products’ long-term sustainability, efficiency and profitability.

Associated British Foods plans to finance this transaction with cash. It had net cash before lease obligations of £586 million at the start of March.