Torridge Vale now has control of milk production, processing and distribution for 70% of its members milk.
Products will be distributed throughout the south of England and into the Thames Valley/ M25/west London area.
Pensworth Farms will benefit from Torridges investment, which will fund growth and safeguard its future, says the company.
“There is great synergy between our businesses, with quality, service and flexibility being key to each one,” said chairman, Mark Pearse.
The combined turnover is expected to exceed 20m. Torridge Vale has 46 producer members delivering 30m litres of milk a year.
It was established in 1996 and markets a range of milks and creams under the Torridge Vale and Definitely Devon brands.