Seeka has today announced the purchase of the Northland post-harvest assets and orchards owned by T&G as a going concern.
The acquisition is an important step in our growth strategy. Northland is a very good kiwifruit growing area and strengthens our position with our foundation product. Also Northland has an important and expanding supply of avocados.
As part of the acquisition, Seeka will purchase approximately 253,000 Zespri shares at a value to be determined by an agreed formula on 30 April.
The Kerikeri post-harvest will also be acquired from 30 April, and will operate nearly all year round handling kiwifruit, avocados and citrus providing services to both the orchards acquired below, orchards retained by T&G and external growers who supply T&G. Seeka will pack Northland citrus exclusively for T&G, who has the right to sell the fruit.
The orchard assets include approximately 78 hectares of kiwifruit and we have purchased the orchards on crop off basis with the revenue from the 2018 harvest accruing to T&G. Seeka will acquire the orchards on 30 June and pay for them at that date or when we are able to get title. And Seeka has arranged for a lease to be in place to cover us should we get access to the orchards earlier or title be delayed.
The facilities will be rebranded to Seeka Kerikeri, and all staff who work in the acquired business will be offered employment at Seeka at no less favourable terms than they received prior to the acquisition.
We will be working through the handover in the coming weeks with integration teams welcoming the Kerikeri business and people to our business, and introducing them to how our systems work. It is our intention to have one business in Northland so our current post-harvest, orcharding and grower support people in Northland will merge with the acquired Northland business.
The deal is subject to the approval of the Overseas Investment Office, if required.
My thanks to the due diligence team. They have delivered excellent effort and long hours at a time when they were already busy with the harvest. The hard work starts now as the operational managers take the job over from here.
You can get more information from Seeka’s website as the announcements will be posted there, or from the NZX, where you can find all announcements under our stock code, SEK.
If you would like any more information, please talk to Kim McFadden.
Kind regards,
Michael
Seeka Key
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