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Lark Distilling To Acquire Kernke Family Shene Estate In $40 Mln Cash, Share Deal

Lark Distilling Co. Limited (LRK), a distiller of single malt whisky, on Monday said it has inked a binding deal to acquire Kernke Family Shene Estate Pty Ltd, the owner of the Pontville Distillery and Estate, to build a new one million liter distillery on the acquired land and to boost its exports.

The total consideration for the acquisition is $40 million, which comprises $38.5 million in cash and $1.5 million in Lark shares to be issued to the vendors, the Hobart-headquartered Lark Distilling said in a statement.

"In order to fund the acquisition, Lark is undertaking an equity raising of approximately $53 million comprised of a fully underwritten unconditional placement of $46.5 million and a non-underwritten conditional placement of $6.4 million," the Australian company added.

A total of 10.6 million new fully paid shares are expected to be issued, representing about 16.8 percent of issued capital. The directors of the company are highly supportive of the acquisition and intend to subscribe for $6.4 million worth of shares via the Conditional Placement, subject to shareholder approval being obtained at Lark's annual general meeting.

The estate and distillery are located 30 minutes north of Hobart at Pontville and includes 40 acres of land and buildings, a 130,000 liter distillery, a cellar door, eight bond stores, a working cooperage and the historic stables and homestead.

Pontville is expected to be Lark's third working distillery in Tasmania, alongside its Cambridge and Bothwell sites and aims to contribute to the in-house production of 576,000 liters of Lark whisky each year.

Lark at Pontville is scheduled to commence distilling from February 2022, with its cellar door open to the public from this date. "All whisky distilling, product innovation and development will continue to be led by Lark's Master Distiller Chris Thomson and his team," Lark noted.

In addition, Lark has commenced planning for the construction of a new one million liter greenfield distillery on the Pontville site, expected to be commissioned in 2023.

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