Seeka is eyeing its third amalgamation in the space of 12 months, after entering into an agreement with Gisborne-basedpost-harvest operator NZ Fruits.
Under the proposed deal, NZ Fruits shareholders will be offered Seeka shares and cash for their shares.
Seeka chief executive Michael Franks said the deal will enable Seeka to service the Gisborne region.
“Gisborne is experiencing tremendous growth in kiwifruit production, with our industry relying on Gisborne growers to provide quality kiwifruit at the start of each export season. We are excited by the opportunity to invest in the Gisborne region and provide local growers with a world-class service,” said Franks.
“This is a NZ$21m investment by Seeka. The consideration will be paid half in cash and half in Seeka shares issued at NZ$5.25 per share.”
The amalgamation is conditional on Seeka completing due diligence by 17 December (2021) and requires NZ Fruits shareholder approval. The deal is anticipated to be completed by early February (2022).
“The amalgamation of NZ Fruits, which needs capital investment for capacity expansion, with Seeka is a positive move for the (Gisborne) region,” said NZ Fruits chair Trevor Lupton. “Seeka has a proven track record in expanding their service offering and delivering competitive returns to its growers.”
Seeka completed similar acquisition deals with fellow post-harvest operators Opotiki Packing and Cool Storage (OPAC) and Orangewood earlier this year.
“This amalgamation further cements Seeka’s regional growth strategy and complements our existing heartland and Northland business,” said Seeka chair Fred Hutchings. “Seeka expects the amalgamation to be accretive to shareholders upon full integration, with the bigger business generating material efficiencies, synergies and cost savings that will benefit all stakeholders.”
