Greenheart Group has signed a conditional deal to buy Northland Forest Managers (1995) for $1.5 million as the Hong Kong-listed owner of Northland's Mangakahia forestry estate looks to expand its New Zealand interests.
Greenheart said it entered into an agreement to buy all the shares in Kerikeri-based Northland Forest Managers, which oversees 19,000ha of plantation forest in Northland. Greenheart is the forest manager's biggest client.
"The forest management service company is a well-established business with the prerequisite know-how, experience and professionalism in plantation operation," Greenheart said. "The company believes the acquisition will increase the group's presence in New Zealand and expects that the experienced forest management team will assist greatly with the possible expansion of the group's plantation business in New Zealand and to other regions in the future."
Greenheart told the Hong Kong exchange it was in talks about a potential acquisition, to explain a 24 per cent spike in its share price. The shares last traded at HK64c.
The deal is expected to be completed five days after the conditions are met or February 1, whichever is later.
Northland Forest Managers is co-owned by managing director Nick Kingsford and business manager Liz Kingsford. In September, Greenheart said its New Zealand business experienced a sharp decline when prices for radiata pine fell to US$23.30 ($35.05) per cubic metre from US$33.70 in the six months ended June 30, 2015.
Greenheart's New Zealand business accounted for about 89 per cent its HK$297 million ($57.6 million) of first-half revenue.