Veritas Investments Limited has completed a deal to purchase the Nosh Food Market business and assets from Nosh Management Limited.
Nosh Food Market is a market-style concept in food shopping and the chain currently has a store in Mount Maunganui as well as Glen Innes, Greenlane, Mt Eden, Ponsonby, Constellation Drive and Matakana.
Veritas is an NZX-listed investment company focusing in the food and beverage sector.
All conditions of the deal, including Nosh shareholder approval, have been met to the satisfaction of Veritas and all Nosh staff have been offered ongoing employment.
Nosh put Tauranga expansion plans on hold in the middle of last year, at the time Paul Lucas, the father-in-law of then Nosh chief executive Hayden Syers, injected capital into the business and bought the shares of co-founder Clinton Beuvink.
"Our ambition was always to own more stores, but we certainly haven't had any discussions with Veritas about that," said Nosh Mount Maunganui owner Jamie Blennerhassett. "The management in Auckland will be looking to bed themselves down and sort out the issues that they have up there," he said.
"Until then, nothing changes, but down the track who knows? For now it's largely the same as what it's been for the last 12 months where everything's on hold."
Michael Morton, a director of Veritas Investments, said the acquisition would not affect the Mount Maunganui store because it was a locally owned franchise. However, he said that Veritas' experience in franchising meant the new owners expected to be able to offer a high level of knowledge and service to franchise holders.
The deal is Veritas' third acquisition in 16 months after acquiring the Mad Butcher franchisor business in May 2013 and a 50 per cent holding in Kiwi Pacific Foods in December 2013. Veritas recently announced it had met profit forecasts and declared increased dividends.
Veritas chairman Mark Darrow said the company was delighted to have Nosh under the Veritas umbrella and excited about its huge potential.
"The search for an executive to run Nosh is already under way. In the interim our Mad Butcher CEO Michael Morton will be hands-on in the Nosh business and will handle the transition period and important first steps of improving the business model to give Nosh renewed energy."
Mr Morton said the response and support from Nosh staff, suppliers and business partners had been amazing.
"We appreciate there is a lot of work ahead to reinvigorate the business but I am very confident we can achieve this relatively quickly. We are already working on a number of changes and innovations that will ensure Nosh has the best stores in the growing food market sector."
Details of the transaction
• The Nosh business has been acquired for $1.77m, approx. $1.0m below net tangible assets
• $0.5m of the purchase price payable has been retained for 90 days and is subject to various warranties and completion balance sheet verification
• Veritas has agreed to meet all of Nosh's trade creditors
• Veritas is not assuming any Nosh bank or debenture debt
• The acquisition and expected working capital requirements have been funded by a facility of up to $5.0 million with ANZ Bank.