Scales Corp. sells Whakatu cold store for $151m - OIO approval needed

Whakatu Coldstores is being sold. Photo / File

More jobs could be on the way to Whakatu, if the Overseas Investment Office approves the $151.4-million-sale of a leading New Zealand coldstore business.

NZX-listed agri-business company Scales Corporation announced an agreement on Wednesday to sell its coldstorage businesses, Polarcold Stores Limited and Whakatu Coldstores Limited (now merged under the Polarcold brand) to a multinational corporation.

The sale, for consideration of $151.4 million, is to Emergent Cold, a global cold chain company that recently acquired the Swire coldstorage assets in Australia and Vietnam.

The transaction is subject only to OIO approval and Scales Corp., managing director Andy Borland told Hawke's Bay Today it would be good news for staff at its Whakatu-based coldstore.

"Subject to OIO approval, the staff will still be in the same situation. Nothing will change from that point of view, you will just have a multinational specialist coolstore operator as your owner.

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"They have been very conscious about telling the management they have been dealing with - and us - that they want to grow the business, and so it's not about shrinking, it's very much about buy it and grow it.

"I think this should be a good outcome for Whakatu staff."

Scale Corp's orchard business, Mr Apple, would not be affected by the sale.

"Mr Apple has its own coolstore infrastructure, owned and leased, so it's really a separate business."

A statement from Emergent Cold chief executive Neal Rider said the company was excited to partner with such an "outstanding" management team.

"Scales has built the leading cold storage business in New Zealand through dedicated service to customers, commitment to employees and the highest quality operations. We are excited to partner with this outstanding management team – we look forward to supporting the continued growth and expansion of the business, and its customers, throughout New Zealand and Asia Pacific with Emergent Cold."

Scales Corporation chairman Tim Goodacre said the deal was part of the company's new strategy.

"As highlighted in our annual results announcements, Scales is refreshing its strategy, adopting a greater focus on pure agribusinesses that play well to our strengths.

"In addition to being less aligned with our core strengths, the returns (measured as return on capital employed) from our Storage activities are also lower, relative to our other business divisions and broader opportunities available to the group.

"At this stage there is no intention to return capital to shareholders. Rather, the proceeds are intended to be used to pursue other attractive opportunities in New Zealand agribusiness, both currently and in the future," Goodacre said.