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Thursday 20 January 2022

Scales in the frame for $200m Villa Maria purchase

24th March 2021 By Bridget O'Connell | bridget@foodticker.co.nz | @foodtickernz

Agribusiness Scales Corporation has confirmed it is in the running to buy NZ winemaker Villa Maria Estates.

In a statement to the New Zealand stock exchange the apple exporter’s managing director Andy Borland, said it is “participating in the sales process for Villa Maria, but cautions that there is no certainty that its participation will result in any transaction.”

The confirmation came after the Australian Financial Review reported that Scales was leading a pack of suitors vying for the Auckland-headquartered winemaker.

Scales had put an offer of circa $200m on the table, according to the AFR, which also listed French beverage giant Pernod Ricard, Australian wine company Accolade Wines, which owns the local Mud House Wines brand, and US beverage giant Constellation Brands as other parties in the running.

Villa Maria is currently owned by the founding Fistonich family. In November last year chief executive Justin Liddell said the company was exploring raising capital from interested parties who want to support the group’s growth plans.

At the time he said “It’s early days and we don’t want to speculate on who a new investor might be or the nature or extent of the investment. We will work through the options and go from there.”

Since then, the company is reported to have enlisted Swiss investment bank UBS to manage the process which could result in the sale of a strategic stake or outright sale.

It would be the first foray into wines for Scales, which was founded in 1897 as a shipping business and has recently sold off its cold storage interests to focus on horticulture, logistics and food ingredients.

The group, which is 15% owned by China Resources Ng Fung, has a market capitalization of $656m and reported net cash of $97.6m when it announced its full-year results last month, so would be looking at increasing debt or undertaking a capital raise to complete any purchase.

In yesterday’s NZX announcement Borland added: “Scales continues to explore a range of growth opportunities, including acquisitions, and our policy is not to comment on media speculation.”

 

 


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