T&G Global has agreed to buy Freshmax Group's domestic New Zealand business for $30 million, the same day that it warned profit would more than halve.
The fruit exporter said it wants to strengthen its New Zealand produce business with the acquisition. The price is on a debt free and cash free basis, and the deal is subject to several conditions, including Commerce Commission approval, T&G said in a statement to the stock exchange.
T&G will take on three Freshmax market sites in Auckland, Wellington and Christchurch and distribution services throughout New Zealand, Freshmax said in a statement.
The sale does not include any of Freshmax's pipfruit, international, Australian or intellectual property holdings.
Freshmax chief executive Murray McCallum said the sale will free it up to focus on export growth, including the potential for further investment across its core categories and IP.
T&G Global chief executive Gareth Edgecombe said "this acquisition demonstrates a strong commitment to our domestic business on which we were founded 122 years ago and signals the importance of having a vibrant home market for our Kiwi-based company with a global footprint."
T&G is controlled by Germany's BayWa, which owns about three-quarters of the stock. The shares were unchanged at $2.97 when trading opened.
Separately, T&G warned calendar 2019 profit would be between $2m and $4m, less than half the $8.3m reported in 2018. That included restructuring costs, revised holiday pay entitlements, and new lease accounting standards.
When reporting its first-half result in August, the company had said the outlook for the rest of 2019 was better than in 2018, and that the benefits of restructuring should start appearing.
Today, it said its trading results were stronger as its international trading business offset inclement weather hampering the New Zealand apple season.