An Australian private equity firm is to inject more than $50 million into the Auckland fruit and produce business Freshmax, as they team up for consolidation on both sides of the Tasman.
Freshmax - which also has operations in Hawkes Bay, Nelson and Christchurch - is the country's largest privately
owned fruit and produce business, with sales of $150 million a year and more than 200 staff.
In a deal with Sydney-based Wolseley Private Equity, a new Australian-registered holding company, Freshmax Pty Ltd, will be formed with a cash injection of between $50 million and $100 million from Wolseley.
The plan calls for the business to achieve annual Australasian sales of $350 million in the next few years in a bid to become a "major player in the Australasian fruit and produce industry".
Wolseley will have a 50 per cent share in the new holding company and Freshmax shareholders will have the other half. The existing management team and the New Zealand workforce will remain in place, with Freshmax continuing to operate out of its Mt Wellington head office.
Freshmax managing director David Smith said yesterday that Wolseley was supported by major institutional investors in Australia.
He said it had approached Freshmax as a vehicle for rationalisation, amid speculation about potential for further consolidation of fruit and produce operations in Australia.
The market across the Tasman was "fragmented" and institutions and equity groups had been looking to invest in the potential for growth.
Woolworths Australia's purchase of Progressive Enterprises in New Zealand represented a fundamental change in the produce distribution market and was also helping to drive consolidation.
Woolworths Australia was looking for supply efficiencies and wanted to do business with companies who could meet higher standards in future.
