Moa Brewing Company buys Savor Group's Auckland bars and restaurants

Savor Group's Ostro restauant. Photo / Supplied

NZX-listed brewer Moa is buying one of New Zealand's largest bar and restaurant businesses - Savor - in a cash and share deal worth $13 million.

Moa said the move would almost triple its revenue and take the group into sustainable profitability.

The deal, which will require a rights issue, is conditional on shareholder approvals.

Moa said one of its key strategies was to ensure its brand could successfully access valuable on-premise venues across New Zealand.

"In recent months the business has secured three significant pourage deals and this acquisition further adds to meeting the objectives of this strategy," the company said in a statement.

Savor Group is an Auckland-based hospitality venture with a collection of bars and restaurants such as Ostro, Seafarers, Ebisu, Azabu, Fukuko and Las Vegas.

This week Savor Group extended its footprint, opening three new eateries and a central bar in Sanford's new Auckland Fish Market on North Wharf, next to what will become the new Americas Cup village.

Moa expects the acquisition to be accretive to earnings with a contribution of $3.6m EBITDA in its first full financial year.

The purchase price will be satisfied via a combination of 60 per cent cash and 40 per cent 40 Moa shares, to be issued at a 20-day volume weighted average price before settlement.

The parties have agreed to an additional payment of $5.4m payable in 12-24 months' time if mutually agreed growth strategies are delivered.

This payment will also be satisfied by the 60/40 formula.

Moa shares were at 41c in early afternoon trading, giving the company a market cap of $24.7m. The stock is down 25.45 per cent this year. The money-losing brewer says it is on track to break even in six-months.

"Over the coming years this platform should enable Moa's brands to strengthen their presence through these venues and for new initiatives to be developed to further create value and to leverage the significant experience of the newly formed team," the company said.

Moa would continue to pursue pourage agreements for its brands outside its own hospitality venues.

Savor Group founder Lucien Law will become a director of Moa and will work across the hospitality venues, the Moa Brand, as well as developing new concepts.

Long-time shareholder of Savor Group and business partner Paul Robinson will join Law on the board of Moa as an executive director.

Moa last month reported a net loss of $1.39 million against a loss of $1.49 million in the previous corresponding period.

The deal is conditional on shareholder approval, confirmation of finance and receipt of third party consents in late February 2019.

A shareholder vote will likely be in early February next year, which will then be followed by a rights issue.

The deal is planned to be funded by a mix of bank debt, new equity and the rights issue and aims to settle by the end of February 2019.

Moa listed in November 13, 2012, at around $1.32.