New Zealand produce firm Turners & Growers has acquired vertically integrated apple supplier Apollo Apples in a deal that could value the group at as much as NZ$31.15m (US$26.79m).
T&G has agreed to pay NZ$36.05m cash on completion, plus an additional amount equivalent to the group’s working capital, which stood at NZ$7.1m at the end of December. Up to NZ$8m more could be paid over the next four years, depending on whether Apollo hits certain performance benchmarks, T&G said.
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Apollo saw a “strong” 2013 apple season and in the year to 31 December the group reported sales of NZ$50m and EBIT of NZ$6.3m. The transaction includes Apollo’s fixed assets, which have a value of NZ$57m.
T&G said the deal was part of its growth strategy to meet the “global demand for southern hemisphere supply”.
Alastair Hulbert, T&G CEO, commented: “We need to serve the demand of a greater number of export customers and markets.”
In a related agreement, T&G will take a 50% stake in a “small processed apple foods” business, Apollo Foods Ltd. The company will pay NZ$1m for the shareholding in the firm, which was established by Apollo founders Bruce and Ross Beaton.
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