Charlie’s Finds Perfect Match in Phoenix Organics
FOR IMMEDIATE RELEASE
Charlie’s Finds Its Perfect Match in Phoenix Organics
Premium beverage company Charlie’s Group Limited today announced the group’s purchase of popular premium beverage maker and distributor Phoenix Organics Limited, and associated companies, including all of its brands.
In a move Charlie’s CEO Stefan Lepionka says will significantly augment Charlie’s current market capacity, Charlie’s will take ownership of the 19 year-old company that has become one of New Zealand’s most successful beverage companies.
Phoenix Organics produces a range of organic juices and healthy sparkling drinks that are well known as premium café favourites across the country. Charlie’s will now own these brands, plus acquire the company’s west Auckland manufacturing and warehousing facility.
On top of this, the Phoenix Organics deal gives Charlie’s access to a robust route distribution system catering to more than 3,500 premium and super premium cafes, and service stations in New Zealand and Australia. Phoenix Organics has in excess of 540 fridges in New Zealand and Australia.
Lepionka says the Phoenix Organics deal is the most significant move Charlie’s has made to date, but sits in line with the industry consolidation plans the company outlined during listing procedures earlier in the year and reconfirmed at its recent annual meeting of shareholders.
“We have been quite clear that our listing on the NZSX was in part to raise capital for the right acquisition should it present itself,” he says.
“Phoenix Organics is certainly that opportunity. Phoenix Organics and Charlie’s share similar business philosophies on product quality and marketing, and the purchase fulfils our desire to acquire a material business that complements our existing assets, grows our top line profitably and enhances our current capacity in manufacturing and distribution.”
Phoenix Organics head Chris Morrison is pleased the deal has gone ahead with a like-minded company like Charlie’s. Phoenix Organics has been growing at 28% per annum since 2002 said Morrison.”
“We have built our business on honesty, integrity and credibility and in that respect there is no better match than Charlie’s,” he says.
“We are confident that under new ownership, Phoenix Organics will continue to grow its existing markets and pursue opportunities with the same commitment to customers that we have always shown.”
The purchase price for the acquisition under the respective agreements will be satisfied by the payment, of $10 million in cash in two instalments. The first instalment of $8 million is payable on 20 December 2005, and the second payment of $2 million is payable on 28 February 2006.
Roger Gower, chairman of Charlie’s, said “the payments would be met from the Company’s own resources, including calling the recently announced equity loan facility, and an additional underwritten placement of $3.5m shares at a price not less than 12.93 cents per share from selected third party private investors, under the authority granted by shareholders at the annual meeting on Wednesday.”
Gower added “The Phoenix Organics group of companies was a compelling offer and the purchase price reflects the strong and premium market position of the company, its very strong growth profile and the nascent Australian business which seems to have huge potential. The addition of the business to Charlie’s will add significant revenues and further market opportunities here and abroad.
Charlie’s intends to maintain the current Phoenix brands and operation in their entirety, treating its own existing Not From Concentrate Juice and Smoothy offering as a separate entity at this stage. Charlie’s will keep all the staff and management of Phoenix Organics.
Once the acquisition is bedded in the respective organisations will work together to integrate aspects of the operations in a way that maximises the synergies available.
“Phoenix Organics is a well-loved brand and we want that to continue. As for other plans, it really is too early to say,” says Lepionka; who did add “the strengths of the respective companies were in market segments where the other was not as strong. This is a significant acquisition for both companies.”
“What we do know is Charlie’s will always be Charlie’s and Phoenix Organics will be Phoenix Organics. It’s just great to have two market leading brands –in Not From Concentrate and Organics - now in the same stable.