Seeka to purchase Bridgecool Corporation

Seeka to purchase Bridgecool Corporation

Seeka Kiwifruit Industries Limited is to purchase 100% of Bridgecool Corporation Limited for $13 million in cash, to be settled 1 April 2005 .

Bridgecool is a significant post harvest business packing more than 4.5m trays of kiwifruit, and has a successful and growing avocado business.

Seeka’s purchase of Bridgecool will add significant volume to Seeka’s expanding business base, says Seeka’s managing director Tony de Farias .

“The acquisition of Bridgecool is very significant step in the consolidation of the kiwifruit post-harvest sector,” says de Farias.

“The investment makes a lot of commercial sense for both Seeka and the industry. Bridgecool has good assets, good management and strong links with growers including orchards managed and leased by the company. Seeka’s considerable resources and support will enable Bridgecool to reinforce its position as the pre-eminent kiwifruit post harvest business in the Western Bay of Plenty.

“With Bridgecool’s operations centred in Tauranga and Katikati, and fruit being drawn as far away as South Auckland , the transaction adds a new geographical mix to Seeka’s supply base. Bridegecool has high-quality assets and recently invested in colour computer blemish grading systems similar to those operated by Seeka,” says de Farias.

Under the deal, Mark Yortt, current Bridgecool managing director and shareholder, will stay on for 12 months to assist in the transition of the company. The marketing interests of Bridgecool under the brand “Global Fresh” are excluded from the acquisition.

The acquisition is the third recent investment by Seeka which successfully completed the amalgamation of Eleos Limited, along with acquiring a 20% stake in Opotiki Packing and Coolstorage Limited (OPAC). The combined investments consolidate Seeka’s processing capacity in the kiwifruit industry to just on 25 million trays, representing approximately 30% of the New Zealand industry. The combined group’s total assets will exceed $90 million.

The combined group is expected to offer significant future benefits to shareholders through positive earnings growth and efficiencies of scale. Grower suppliers to all contributing companies will also benefit from rationalisation of supply-chain costs and a focus on the delivery of improved financial benefits to growers.

“I am now looking forward to focusing on delivering the full value potential to Seeka’s shareholders and growers,” say de Farias.

“The opportunities arose relatively quickly and their resolution required the use of bridging finance facilities. The company, however, is planning an equity raising programme in the new year along with other measures aimed at bringing the financial structure into line with appropriate ratios. A full NZX listing will also be considered and a meeting of shareholders is planned for February 2005.”

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