Sanford Ltd has confirmed it has entered into a conditional agreement with fellow New Zealand company Pacifica Seafoods for the acquisition of Pacifica’s Greenshell mussel and Pacific oyster businesses for NZD 85 million (€48.4 million/$65.2 million).
The announcement follows a prior agreement, announced earlier by the firm regarding the investment.
The condition relates to the pre- arranged funding arrangements becoming unconditional by Wednesday 17 November 2010, said the firm.
Under the agreement, Pacifica Seafoods businesses and assets to be acquired include the control of more than 70 marine farms, 400 hectares of water space and 800 mussel longlines together with lease, share and contract farming operations that include a further 130 hectares of space and 300 mussel longlines.
The investment also includes a 40% interest in an approved 2,695-hectare mussel farm development opportunity in Pegasus Bay near Christchurch, a large and modern mussel and salmon processing facility in Christchurch, 10 marine farm servicing and harvesting vessels and a number of properties near the Marlborough Sounds and in Christchurch as well.
Sanford will as well acquire Pacifica’s interest in a co-operative marketing company which markets mussels in China under the ‘Pure New Zealand Greenshell Mussels’ brand (Sanford already has a 35% interest) and approximately 295 employees (during peak season).
Sanford MD Eric Barratt said the acquisition of the Pacifica Seafoods business is highly complementary with Sanford’s existing aquaculture business and follows on from the firm’s acquisition of marine mussel farms from Sealord in 2009 and is totally consistent with Sanford’s aquaculture strategy that the firm outlined in May this year.
Barratt added that the acquisition will combine New Zealand’s two largest Greenshell mussel businesses and will consolidate Sanford’s position as New Zealand’s foremost aquaculture producer and exporter.
The acquisition also offers significant potential synergy benefits for Sanford, particularly in terms of export marketing and further processing automation, he added.
The acquisition is expected to be completed on 30 November 2010, subject to the satisfaction of the remaining conditions. As previously announced, Sanford has already received clearance for the acquisition from the Commerce Commission.
Sanford will fund the acquisition using a new three-year debt facility provided by its existing banks. The acquisition is expected to be earnings accretive for Sanford in the current financial year. Sanford was advised on the acquisition by First NZ Capital and Chapman Tripp.
