Chevalier International Holdings, the Hong Kong-listed multinational conglomerate, has announced it has acquired a controlling stake in one of Australia’s largest fresh produce grower-packer-marketers, Moraitis Group.
In a statement to the Hong Kong Stock Exchange, Chevalier, which has diverse business interests ranging from cars to construction, confirmed the transaction worth A$211.82m was completed on 8 April.
Asiafruit understands that Chevalier’s investment gives the conglomerate a 60 per cent shareholding in the Australian company, with Moraitis management acquiring a further 8 per cent. The remaining 32 per cent of the business will be retained by existing shareholders, namely Catalyst Investment Managers and the Moraitis family.
Jeff Jackson, CEO of Moraitis, told Asiafruit that the Moraitis management team would now run the business independently with investment from Chevalier as a majority shareholder.
Founded 55 years ago by family patriarch Nick Moraitis, Moraitis has evolved to become a leading supplier of fresh produce to the Australian retail market with interests in production, processing and packing through joint ventures and alliances. Its annual revenue has doubled over the past five years, reaching A$490m in the year-ending 27 June 2012.
In its Stock Exchange announcement, Chevalier said it planned to boost Moraitis’ market share and product penetration in Australia as well as exploring opportunities for export of Australian produce to mainland China.
The company also plans to use Moraitis as a platform to provide investment, farm management and distribution services for investors looking for agricultural opportunities in Australia.
In the medium- to long-term, Chevalier said it aims to replicate Moraitis’ vertically integrated business model and skills in farm management and retail supply chains to expand in China’s fresh produce industry.
Chevalier has an existing relationship with China Resources Enterprise, which operates one of China’s largest supermarket chains.
Jackson said the deal would greatly strengthen the Moraitis business moving forward.
“The investors have a very keen interest in our business model, and they’re very keen on increasing their investment via Moraitis into the agricultural, farm management and distribution space,” he told Asiafruit. “The funding from our shareholders has an investment theme around growth, be it investing in more farms, consolidating our distribution model or taking our business model and exporting it into China via their relationships with major retailers there.”
Jackson said the negotiations were 'complex and time-consuming', with the transaction 'running its course over the past three calendar years'. That partly owed to the number of separate interests involved in the transaction, but he added that 'the result was excellent for all (parties involved)'. The acquisition also includes all of the Rennie assets in Australia.
The deal faced no problems securing Foreign Investment Board approval, according to Jackson, who hailed it as a key win for the horticulture business in Australia. “This is a phenomenal opportunity for the infusion of new, sticky capital that comes in and invests in permanent improvements in infrastructure, plantings and technology.”
