Turners & Growers [NZX: TUR], the fruit marketer controlled by Germany's BayWa, has agreed to buy Hawke's Bay-based Apollo Apples for as much as $44.1 million as it looks to meet growing global demand.
The Auckland-based company will pay $36.05 million up front for the apple grower, packer and exporter, and cool store operator, and will pay up to $8 million in the following four years if performance targets are met, T&G said in a statement. Apollo founders Bruce and Ross Beaton will stay with the business for at least the next four years.
T&G also agreed to pay $1 million for a half-stake in Apollo Foods, a small processed apple foods business, with the Beatons keeping the other half.
The deal is part of T&G's growth strategy to help its ENZA unit meet global demand for southern hemisphere supply, it said.
"The acquisition demonstrates our commitment to further invest in the NZ apple industry, improve grower returns and increase NZ apple exports," T&G chief executive Alastair Hulbert said. "We need to serve the demand of a greater number of export customers and markets."
T&G returned to profit in 2013 after two years of losses when it wrote down the value of its orchards, with higher volumes, price increases, greater access to new markets and customers in Asia helping to boost its export earnings.
The deal is subject to Overseas Investment Office approval and certain material contracts, which T&G said will likely be satisfied within four months.
T&G's shares, of which BayWa owns about 73 percent, were unchanged at $1.90 yesterday, and have gained 8.6 percent this year.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Veritas share price plunges after result
- Airways signs big US air traffic deal after reporting record year
- Sir Bob Jones' company buys landmark Wellington building
- Property developer David Henderson claims judicial bias in appeal over tax convictions
- Manufacturing in China: the key lesson from Kiwi startup’s flame-out, US startup’s success
Most listened to
- Airways's Ed Sims says the growth in air traffic management will be hard to sustain
- In Editor's Insight, Nevil Gibson watches Auckland's four "true blue" mayoral candidates step out in Takapuna
- Cameron Officer on Singapore’s driver-less taxi in Car Torque
- In Editor's Insight, Nevil Gibson looks at Phil Goff, who at a forum in Takapuna spoke of the need to reduce population
- Meridian CEO Mark Binns on the Tiwai smelter and generation options