Leading New Zealand grower-packer Seeka Kiwifruit Industries will shell out over NZ$3m (US$2.61m) for Auckland-based fruit ripening and delivery services company Glassfields, according to media reports.
Seeka chief executive Michael Franks confirmed the deal will go ahead, telling BusinessDesk his company would pay a fixed price of between NZ$3.75m (US$3.27m) and NZ$6.25m (US$5.44m) for Glassfields, which holds the exclusive rights to import Sumifru bananas, pineapples and papayas from the Philippines.
In a company statement, Seeka said the purchase would be made using a combination of existing cash resources and debt lines. The Te Puke-based firm expects Glassfields will contribute up to NZ$1.25m (US$1.08m) in operating profit over the 2015 financial year.
In March, Seeka announced it was selling its 20 per cent shareholding in kiwifruit cold storage specialist Opotiki Packing and Cool Storage as part of its post-Psa strategy, which has focused on the sale of non-core assets and the reduction of debt. It followed news that Seeka’s net profit had fallen 55 per cent from NZ$5.8m (US$4.8m) in 2012 to NZ$2.7m (US$2.3m) in 2013.
“Kiwifruit is the foundation to our business and this (Glassfields buyout) is more about an expansion into the produce area that can complement our core business,” Franks told TVNZ. “It’s part of putting the company back on to a growth strategy.”
Glassfields will be led by recently appointed general manager Ray Hook, who has previously served as joint chief executive of One Harvest and chief executive of Oolloo Farms. It has operations in Auckland and is also opening in Christchurch.
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