Seeka Limited and Opotiki Packing and Cool Storage Limited (OPAC) are to amalgamate in a deal worth $59m.
This transaction will see Paengaroa-based Seeka expand further to be operational in all of New Zealand’s major kiwifruit growing regions.
The Boards of Seeka and OPAC have unanimously recommended the amalgamation.
“The purchase of OPAC is consistent with our strategy and delivers the Eastern Bay of Plenty kiwifruit growing region to Seeka’s operations, a region in which Seeka is already experiencing growth through new orchard developments,” says Seeka chairman Fred Hutchings.
“The transaction is expected to be accretive to shareholders once the combined business is fully integrated.
“Seeka expects the bigger business to generate material efficiencies, synergy benefits and cost savings for the benefit of all stakeholders.”
OPAC shareholders will receive new shares in Seeka at the ratio of 1.4833 Seeka shares for every one OPAC share held, valuing the net assets of OPAC at $33.94m provided OPAC shareholders approve the transaction with a 75 per cent approval required.
Seeka will assume approximately $25.06m of debt as part of the acquisition bringing the total deal to $59m.
“The amalgamation brings together two companies with a long relationship and similar ownership structures,” says OPAC chairman, Tony de Farias. “Many OPAC shareholders and growers are also shareholders in Seeka.
“The Board of OPAC recommends the deal to shareholders believing the enterprise value of $59m to be fair, with good opportunities for growth and synergies.
“The combined group will deliver efficiencies, new technology and grower support.”
The offer is subject to a number of conditions, including approval of OPAC’s shareholders to the amalgamation at a shareholders’ meeting to be held on Tuesday, April 13 and approval by Seeka’s shareholders to the issue of up to 7,042,574 new shares in Seeka at the ASM to be held on Friday, April 16.