Equity investment to provide New Zealand grower-exporter with capital for growth, expansion and operational efficiency
One of New Zealand’s largest vertically integrated apple producers, Frescho, has announced it has sold a 25 per cent stake to specialist food and agribusiness investor, AGR Partners.
The equity investment will provide capital for growth, expansion and operational efficiency for the business, which exports apples to over 30 countries, including supplying more than half of Japan’s total imported apple volume.
Freshco CEO, Glenn Pool, said Freshco had remained profitable through Cyclone Gabrielle and after consecutive record years is poised for further growth.
He said the commercial transaction would provide capital for growth in volumes, operational processing capability and international in-market investments, adding that importantly, Freshco would remain 75 per cent locally owned and operated.
“This transaction will see AGR Partners take an equity interest in Freshco, reflecting confidence in the growth and quality of our business and in the future of high-quality, vertically integrated apple production in Hawke’s Bay,” he said.
“Proceeds from this transaction will drive growth in new production and enable investment in packhouse automation to efficiently handle growing volumes. It’s a very positive transaction for Hawke’s Bay’s horticulture industry at an important time.”
Freshco has developed four proprietary apple brands and operates across a production footprint of approximately 600ha in Hawke’s Bay, where its major packhouse is located, and Nelson, where 33 per cent of its apples are grown. The company also exports squash and cherries as part of long-standing joint-venture arrangements with local growers and post-harvest operators.
AGR Partners is a US-based specialist food and agribusiness investor that provides long-term capital to businesses across the food and agricultural value chain in the US, Canada, Australia and New Zealand.
AGR Partner, Daniel Masters, said he was particularly impressed by Freshco’s long-standing relationships in core international markets, its vertically integrated operating model and its focus on helping growers and customers succeed.
“AGR has long admired New Zealand’s ability to be globally relevant as a premium supplier across a number of specialty food categories, particularly dairy, horticulture and red meat. New Zealand’s apple sector accounts for only one per cent of global production, but the quality of its supply chain is unique,” Masters said.
“New Zealand achieves yields approximately twice as high as other producing countries due to a range of factors, including capital investments in orchards and favourable growing conditions, while also attracting a clear premium price position in Asia, where New Zealand apples sell for a material premium compared to apples imported from other geographies, owing to their quality, varietal innovation, food safety and traceability.”
He noted that Freshco brings these advantages together.
“We are excited to support the team as it continues to execute its disciplined, long-term growth strategy,” Masterd said
The transaction was facilitated by agri-focused investment banking firm, Lewis Tucker.
James Harty, Lewis Tucker director, said the transaction was an example of continued demand from institutional capital providers for quality, vertically integrated primary production businesses and paid credit to the Freshco management team for its execution of a very deliberate and disciplined market-led growth strategy.
