Listing to harvest cash for Mr Apple owner

Scales Corporation, which owns Mr Apple, intends to list on the New Zealand stock exchange. Photo/Glenn Taylor

Mr Apple owner Scales Corporation intends to list on the New Zealand stock exchange as majority shareholder Direct Capital looks to sell down some of its holdings.

The initial public offering (IPO) will be on the NZX Main Board.

Scales is one of New Zealand's oldest companies and has three divisions in horticulture, storage and logistics and food ingredients.

Mr Apple is Hawke's Bay's largest apple producer and the country's biggest apple exporter, employing more than 1000 at the height of the season and about 270 permanent staff.

About 65 per cent of Scales' business is in Hawke's Bay, mainly with Mr Apple which represents about half of Scales' business activities.

Scales owns Whakatu-based Meateor Foods, which collects animal byproducts and exports them to the United States and Thailand in frozen 25kg blocks.

It also owns Liqueo, a bulk storage business with tanks at Napier Port for edible oils, tallow and molasses and Whakatu Coolstores, which has warehouses in Hastings and Whakatu.

It holds a half share in Hastings-based Profruit, which produces apple and kiwifruit concentrate and last year Scales bought a 50 per cent shareholding in Havelock North food exporter Fern Ridge Produce.

Scales, which was once part of collapsed South Canterbury Finance, is currently 84 per cent owned by private equity investor Direct Capital, through its Direct Capital IV and Pohutukawa II funds along with co-investment partners New Zealand Superannuation Fund and ACC, with the balance held by senior management and about 400 external investors.

The IPO will involve a mixture of new shares and any existing shares existing shareholders elect to sell. Direct Capital will no longer have a majority shareholding but intends to retain a cornerstone stake.

Scales managing director Andy Borland said it was "an exciting time for the company" but it had no special plans for the extra funding.

"We are growing all of our businesses across each division with existing growth plans in place," he said.

A prospectus is expected to be available this month and the company expects the shares to be quoted on the NZX Main Board in late July.

First NZ Capital and Deutsche Craigs have been appointed as advisers.

Last month Scales reported a 50 per cent increase in after-tax profit to $20.4 million in the year to December 31, 2013. Revenue increased 17.2 per cent on 2012 to $278.1 million and EBITDA was up 34.4 per cent to $44.4 million.

Scales was founded as a shipping business by auctioneer and trader George Herbert Scales in 1897 after farmers protested against wool freight costs to the UK.