Longtable Group has bought Melbourne hipster creamery St David Dairy for $15.25 million.

The dairy is based in Fitzroy, an inner-city suburb known for fixie bicycles and backyard farms, and sell a range of butter, milk, yoghurt and milk to city cafes.

The deal is split $12.25 million in cash and $3 million in scrip to founder Ben Evans. Half is escrowed for a year and the other half for two years.

Escrow is a period when shares cannot be sold.

Longtable (ASX:LON) is raising $15 million at 70c a share from institutional and professional investors to fund the deal.

Having bought organic-biodynamic dairy producer B.-d Farm Paris Creek when it was still Primary Opinion last year, the latest purchase extends Longtable’s reach into the cafe market.

“This acquisition provides Longtable with a quality beachhead into the Victorian milk market and diversifies our customer base to include a range of Australia’s best restaurants and cafés,” said Longtable managing director Laura McBain.

Longtable has been contacted for comment.

The company’s shares were flat at 74c at the open.

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