Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Rubicon buys out ArborGen partners for US$29 million

Rubicon buys out ArborGen partners for US$29 million, raises funds from new US investor

By Paul McBeth

June 29 (BusinessDesk) - Rubicon has taken full ownership of forestry biotech firm ArborGen, buying out its partners for US$29 million, having raised money from a new US investor to help fund the deal.

The NZX-listed forestry firm will pay International Paper and WestRock a total of US$14 million today in the first tranche of the deal, followed by a US$5 million payment on Dec. 31 and US$10 million on June 30 next year, it said in a statement. Those second and third tranches are secured against all of Rubicon's ArborGen shares.

Rubicon will partially fund the transaction through a US$12.5 million share placement to US hedge fund Libra Fund and the New Zealand company's biggest shareholder, Knott Partners. The issue will be a small premium to the 21.5 cents the shares last traded at before the announcement, equating to 21.8 cents based on an exchange rate of 72.78 US cents, and will settle at the end of the week. The shares rose 2.3 percent to 22 cents today.

Libra will buy 56.8 million shares, lifting its stake to 18 percent from 7.7 percent, while Knott will maintain its stake at 28 percent. The new shares issued equate to about 19 percent of the company.

"The structure of the deferred purchase price payment schedule, together with the Rubicon US$12.5 million share placement announced today ensures that there will be no demands on the remaining shareholders for equity capital in order to complete this transaction," chairman Steve Kasnet said. "ArborGen has always been core for us - we are a founding partner of the business, and we have for some time been keen to extend our involvement to help the company realise its full potential."

The deal follows Rubicon's scaled back exposure to the Taupo-based wood processor Tenon, where the local business was bought by a consortium including Rubicon, albeit with a smaller stake.

In its first-half earnings review, Rubicon said one of its immediate priorities was to agree with its fellow ArborGen shareholders "the appropriate funding and value extraction plan forward", with the unit seen generating more than US$40 million of annual revenue in the current financial year as rapid growth in Brazil offset a largely flat US market, and broke even on a earnings before interest, tax, depreciation and amortisation basis.

Rubicon and its partners had planned to float ArborGen, raising between US$82 million and US$92 million, but that shelved in 2011, with the owners saying market conditions on Wall Street at the time were too weak.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Auckland Transport: Successful Bridge Repair Opens Two Additional Lanes To Traffic

The opening of two additional lanes on the Auckland Harbour Bridge this morning will help relieve some motorway congestion for motorists heading home to the North Shore tonight. More>>


Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>


Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>


MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>


University Of Auckland: Whale-Watching By Satellite – Follow Their Travels Online

Scientists have successfully attached satellite tracking tags to six New Zealand southern right whales, or tohorā, and are inviting the public to follow the whales’ travels online. Part of a major research project involving the University of Auckland ... More>>

Commerce Commission: Kiwibank Admits System Failures And Agrees To Pay Customers $5.2 Million

Kiwibank has entered into a settlement agreement with the Commerce Commission after reporting that it failed to have in place robust home loan variation disclosure policies, procedures and systems. In a settlement dated 27 August 2020, Kiwibank admitted that ... More>>

Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>


NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>


Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>