Scales Corp sells two apple orchards to Craigmore Sustainables for $34m

Scales has sold two orchards to Craigmore Sustainables. Photo / Supplied

Scales Corp says it has agreed to sell two Hawke’s Bay apple orchards to a fund managed by Craigmore Sustainables for $34 million.

The Te Papa and Blyth orchards cover 186ha.

They were put up for sale in May.

The transaction was subject to approval by the Overseas Investment Office, Scales said.

As part of the transaction, applicable fruit from both orchards will be supplied to Mr Apple — a Scales subsidiary — for packing, storage and marketing under a long-term agreement.

To help with orchard transition, the Blyth orchard would be leased back to Mr Apple until the end of the 2027 season, and Mr Apple would provide short-term management services for the Te Papa orchard, Scales said.

“Craigmore and Scales are strongly aligned in our shared vision to see the New Zealand horticulture industry and the wider community thrive through continued investment and growth,” Borland said.

The sale of the orchards is expected to result in a fall in Mr Apple’s underlying earnings before interest, tax, depreciation and amortisation (ebitda) of $4m in the medium term.

But Scales said today’s sale, combined with the impact of the Bostock transaction, would increase medium-term ebitda by $6m-$8m.

NZX-listed Scales comprises three operating divisions — global proteins, horticulture and logistics.

Craigmore Sustainables works with global capital partners to build and manage farms, orchards and forestry businesses in New Zealand, with assets worth $1 billion under management.

– Staff reporter