Bridge of Allan-based Graham’s The Family Dairy have bought Glenfield Dairy in Fife from First Milk for an undisclosed sum.
The deal for the Cowdenbeath plant is part of Graham’s wider growth strategy.
First Milk said it would help their profitability and deliver a more sustainable business for their farmers.
The takeover allows Graham’s to expand their product range, explore new developments and support the dairy industry across Scotland.
The Glenfield site produces cottage cheese, quark and sour cream, which will continue to be produced when Graham’s take charge of the business with all employees next week.
Graham’s produces milk, block and spreadable butter, cream, cheddar cheese, and has recently launched low-fat yogurt and luxury ice-creams.
Robert Graham, managing director, said: “This is an exciting acquisition as it allows us to extend our product range for customers and consumers.
“In addition, this deal presents great potential to explore further new product development going forward.”
He added: “We plan to bring these principles to Glenfield as they become part of the Graham’s family. We’re delighted to be expanding the business on home turf and will continue to be mindful of future growth opportunities.”
Mike Gallacher, chief executive of the previously loss-making First Milk, said: “The sale of Glenfield Dairy follows a full strategic review by the board over the summer. It will allow us to focus even more closely on our core businesses in hard cheese and liquid brokering.
“This is already starting to drive improvement with the business moving into a positive operating profit at mid-year, consistent with the phasing of our turnaround plan.
“We are confident that this focus will deliver improved milk prices and a more sustainable business model for our farmer shareholders.”
He said the deal is good for Glenfield employees, customers and consumers. Glenfield fitted well with Graham’s other dairy operations and the sale would protect employment at the site.
Graham’s has grown through three generations of dairy farmers to become one of Scotland’s most notable food and drink successes, since setting up in Bridge of Allan in 1939.