Family-owned Apollo Apples will be sold to Turners & Growers, subject to Overseas Investment Office approval, in a deal potentially worth more than $52 million.

Brothers Bruce and Ross Beaton will remain at the helm of Apollo.

If Apollo reaches performance targets over the next four years a maximum of $8 million could be added to the purchase price.

Turner and Growers will also purchase a 50 per cent shareholding of Apollo Foods for $1 million, to complement Turners & Growers' ENZA Foods.


Turners & Growers CEO Alastair Hulbert said his company has had "a strong growth agenda" since it was taken over by German company BayWa three years ago.

"Their strategy is to grow the fruit division," he said.

Turners & Growers owned ENZA, which had "great synergies" with Apollo.

In the last five years Apollo has grown into an operation exporting 1.4 million cartons of apples to 43 countries.

It has 500 ha of apple orchards in Hawke's Bay and at the height of the season, employs up to 1000 people.

Director Bruce Beaton said Apollo had been looking for a partner to grow the business for two and a half years and was approached by Turners & Growers a year ago.

"This is a fantastic opportunity to continue Apollo's growth strategy," he said.

Ross Beaton said Apollo was keen to capture emerging markets.

"That's where we see our business going and we need some horsepower to get there."

Apollo was skilled at "extracting maximum value from a bin of apples" by finding markets for fruit with cosmetic flaws, Bruce Beaton said.

Mr Hulbert said Apollo's markets for cosmetically-challenged fruit "opens up a whole lot of exciting new customers to us".

The brothers retain no shareholding.

"I'll be an employee for the first time ever," Ross Beaton said.

Pipfruit New Zealand CEO Alan Pollard said the acquisition showed the industry was confident and willing to collaborate for greater returns.

"For us to succeed in all of our international markets we have got to work well together," he said.

"Very clearly for BayWa we are strategically important because we are close to Asia and that is a strong growth area for them. "

The acquisition further embeds BayWa's commitment to New Zealand - it was eyeing South American opportunities before taking over Turners & Growers.

The Apollo purchase price includes an initial payment of $36.05 million for the fixed assets, brands and trademarks, plus an additional amount equivalent to the working capital of the business ($7.1 million at December 31).

Up to $8 million may be paid over four years if growth targets are met. Mr Pollard said they should not be difficult to achieve.

Bruce Beaton said further consolidations of integrated apple businesses were inevitable. Since 1998 the number of orchardists has fallen from 1500 to 400.

Ross Beaton said there was still room for the small operator.