Costa Group Holdings (ASX:CGC)
, a leading grower, packer and marketer of fruits and vegetables, has entered into a binding agreement to acquire 2PH Farms, the largest citrus grower in northern Australia. 2PH's properties are located in central Queensland, and 2PH is a leading breeder of seedless and seeded mandarins.
The upfront funding requirement is approximately $219 million, to be funded by a renounceable entitlement offer of $190 million and existing debt facilities. The transaction is expected to complete by late July 2021.
In July 2023, Costa will pay an additional $31 million for the purchase of 2PH's "Conaghans" property, where a new citrus crop is being planted.
Costa Group CEO Sean Hallahan comments: "There are a number of strategic benefits and alignments... which include greater export supply to key Asian export markets, production scale, increased variety offering... access to a proven 30-year proprietary breeding program, expanded geographic footprint and extended season timing."
2PH has an established brand presence in Asia, and its season commences in mid-March, the earliest citrus season in Australia. The deal will give Costa an exclusive licence to the Amorette and Phoenix seedless varieties from 2PH's breeding program.
Shares in Costa Group Holdings (ASX:CGC)
closed at $3.40 yesterday.