Costa signs agreement for NCF acquisition

Costa Group has emerged as the new buyer for Nangiloc Colignan Farm (NCF).

In a statement issued via the Australian Securities Exchange (ASX) this morning (16 November), Costa announced it had signed a conditional agreement for the acquisition of NCF’s farming operations.

The move comes less than 12 months after rival Australian fresh produce company Nutrano Produce Group signalled its intentions to purchase the leading citrus and table grape producer. Nutrano put its acquisition plans on hold in June, although it remained optimistic a deal could be reached.

Costa said the acquisition was likely to be completed later this year, having entered into transaction agreements with NCF in conjunction with a subsidiary of CK Life Sciences International. Subject to the satisfaction of various conditions, CK Life Sciences will acquire NCF’s farms, which will be subsequently leased to Costa for a period of 20 years.

Located in the premier Sunraysia growing region, NCF’s farms span 567ha, which includes 240ha of citrus (103ha of Afourer mandarins and 105ha of oranges), 204ha of table grapes and 123ha of wine grapes.

Costa CEO Harry Debney said the acquisition opens up growth opportunities not available to the company in the South Australian Riverland, where it produces a large portion of its citrus crop.

“This acquisition and location in the Sunraysia region will reduce reliance on any one region in our portfolio and will also open up additional growth opportunities,” Debney said in the ASX release.

“In particular, with respect to Afourer mandarins and navel oranges this will allow us to further take advantage of export market demand.”

Up to a third of NCF's citrus plantings are less than five years old, while the majority of the farm's table grapes will be sold into export markets.

NCF also has attractive plantings of proprietary table grape varieties, while it is intended over time to convert the wine grape plantings to primarily citrus plantings.

“Over recent years Costa has embarked upon both greenfield growth and M&A activity in the citrus category,” Debney added. “This has been fuelled by expanded favourable export markets and free trade agreements with countries including Japan, South Korea and China.

“In order to further capitalise on this, Costa is trialling several new mandarin, orange and lemon varieties on commercial sized blocks that have market potential with improved attributes including, seedless, high brix (sugar), red flesh and different maturity timing.”