Costa Group has announced it will pursue an initial public offering (IPO) with a potential enterprise value of A$800m to A$1bn.
Frank Costa, chairman of the board of Australia’s largest agricultural group and leading suppliers to Coles and Woolworths, told the Australian Financial Review that the group is also considering a trade sale.
“My preference is for a trade sale but we are also looking at a stockmarket float, which would obviously keep it here in Australia,” Costa said. “But if it was a sale, yes, I would think that the buy would most probably come from overseas, given the size of the company.”
Goldman Sachs and UBS have been appointed as joint-lead managers, with The Land reporting that the investment banks are on a non-deal roadshow of Asia and Australia to raise between A$300m and A$600m.
With some 20 per cent of the group’s produce exported to markets in Europe, North America and Asia, Costa said the company sees growth in overseas markets, particularly in Asia.
"We've certainly been looking at growing more overseas, and taking our nous and people over there to do so," Costa said. "There is a lot more demand coming from Asia for good clean green food and not just from a growing population point of view but also their growing economic power as well."
The family-owned company has been in business since 1888, with 50 per cent of the company sold to US firm Paine & Partners in 2011.
“We had a plan then for a sale within five years and that time is coming up,” Costa explained. “Myself and my brothers are in our seventies, save for the youngest one who is in his sixties, and we haven't seen one individual really emerge from the rest of the family to take control of the business, which is why we sold half to Paine & Partners four years ago and then went with a corporate management structure."