Comvita is set to buy New Zealand Honey from the New Zealand Honey Producers Co-operative, which it says will help address growing supply constraints.
The acquisition also secures production capacity and exposure for Comvita in the South Island; historically Comvita has sourced honey mainly from the North Island, it says
"By purchasing New Zealand Honey Limited and partnering with New Zealand Honey Producers Co-Operative, we are able to combine export initiatives and leverage Comvita's international distribution and premium brand image," says Comvita CEO Brett Hewlett.
New Zealand Honey Producers Co-Operative’s Chairman Barney Sundstrum says it shares Comvita's view that there's merit in consolidating manufacturing and marketing functions in the industry for economies of scale.
“The proposed transaction with Comvita ticks all the relevant boxes, giving existing and future co-operative members greater exposure to the benefits of premium markets," he says.
The New Zealand Honey Producers Co-Operative, based in Timaru, was established in 1981 and is owned by 70 beekeeper shareholders, with the majority in the South Island.
The buy cost $12.3 million, subject to a working capital adjustment, paid in $7.3 million cash and $5 million in Comvita shares. The shares are to be held in Escrow and released to New Zealand Honey Producers Co-Operative annually over six years.
The acquisition is expected to be completed mid June.
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