Seeka wants approval for $60m deal to buy kiwifruit rival

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There is further consolidation in New Zealand’s kiwifruit industry with grower and post harvest operator Seeka aiming to take over OPAC – Ōpōtiki Packing and Coolstorage.

Zespri expects a lift in gold kiwifruit production next year.

Many OPAC orchards grow high value gold fruit that produce early in the season, Seeka chief executive Michael Franks says. Photo: AFP / Monty Rakusen / Cultura Creative

The Bay of Plenty-based company is asking growers for approval for the acquisition.

The move will result in there being just two significant post-harvest players remaining in the region – Te Puke-based EastPack and Katikati-based Seeka.

The $60 million deal will increase Seeka’s fruit volume by 25 percent, or 8 million to 8.5 million trays of kiwifruit.

Chief executive Michael Franks said the move was prudent with many OPAC orchards growing high value gold fruit that produce early in the season.

“One of our strategic platforms is to be bigger in kiwifruit. That’s our foundational fruit (avocados are the other main crop) and one of the large remaining geographical areas and major growing areas for kiwifruit is the East Cape around to Gisborne,” he said.

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Franks said operational staff at OPAC would not be affected by the takeover but there would be other changes over time.

For growers, the deal should mean more money.

“That’s our intention – to deliver more returns from the fruit they grow and of course we’ve got more ability to invest in more automation in the big ticket items that drive labour out, or that makes us more efficient as an operator,” Franks said.

The offer is subject to the approval of 75 percent of OPAC’s shareholders who will vote at the company’s annual meeting on 13 April, and 50 percent of Seeka shareholders at the annual meeting on 16 April.

OPAC’s chairman Tony de Farias said the amalgamation brought together two companies with a long relationship and similar ownership structures.

“Many OPAC shareholders and growers are also shareholders in Seeka. The board of OPAC recommends the deal to shareholders believing the enterprise value of $59m to be fair, with good opportunities for growth and synergies. The combined group will deliver efficiencies, new technology and grower support,” he said.

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The boards of Seeka and OPAC have unanimously recommended the amalgamation.

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