Green light for kiwifruit merger
Kiwifruit companies Satara and EastPack will merge next week after Satara shareholders gave it the green light.
Yesterday afternoon's second, crucial vote in Te Puke in favour of the merger followed an earlier ballot, when a Satara interest group narrowly voted the merger down by 0.2% below the required 75% threshold at a meeting late last month.
It was approved by a majority of 88% of a Satara interest group.
The EastPack shareholders and the four other Satara interest groups were not required to vote again as they had already indicated overwhelming support for the merger.
The vote means the merger is now unconditional and will take effect on March 20. EastPack will be the name of the merged company and Satara will delist from the NZAX.
A trading halt on Satara shares came into effect at 5pm yesterday, when the shares were trading at 5.8c.
Satara and EastPack both operate in the post-harvest kiwifruit space.
The enlarged entity is expected to pack 25-27 million Class One trays of kiwifruit this year, representing about 27%-30% of New Zealand's production.
Satara chairman Hendrik Pieters and EastPack chairman Ray Sharp say the Psa virus has reduced New Zealand volumes by 22% in the last two years and is one of the key drivers of the merger.
“The merger provides the ability to fully utilise some of the industry’s most modern, efficient packing and coolstore sites to maximise returns to grower shareholders in these difficult times,” the pair say in a statement.
Growers’ fruit will be packed at facilities in Opotiki, Edgecumbe, Te Puke, Katikati and Northland.
Two of the existing Satara sites will be mothballed but will be redeveloped with new plant and equipment when kiwifruit volumes increase.
“The decision to merge these two companies is a logical and pragmatic business decision endorsed by both companies’ shareholders,” say Messrs Pieters and Sharp.
Key merger facts:
• EastPack is the name of the merged company.
• Chairman is Ray Sharp, CEO is Tony Hawken.
• Current Satara directors Hendrik Pieters and Mike Maltby will join the EastPack board.
• 25-27 million Class One trays expected to be packed in 2013.
• Accounts for 27%-30% of New Zealand kiwifruit volume.
• Packhouse and coolstore sites in the Bay of Plenty and Northland.
• Two Satara sites will be mothballed until volumes lift.
• Employs 250 fulltime employees and more than 2000 seasonal staff.
• Turnover >$130 million.
• Satara will delist from the NZAX.