A prospectus is said to be available for the Costa Group IPO today, according to reports from The Australian and The Australian Financial Review. The company was last week running its IPO roadshow, and owner Frank Costa and CEO Harry Debney were weighing up the options of IPO against an offer from a private buyer. The prospectus will list 60% of the Costa Group shares to raise $600million, according to the report in The Australian and the option has gained favour because an overseas conglomerate interested in the business indicated a deal might take up to 8 months.
The issue of the prospectus was not categorically confirmed by Mr Debney, or Mr Costa, and the international roadshow meetings with investors appears to be continuing. The company has also increased its exports, and opened up off shore farms in recent years in preparation for an eventual sale to a buyer from overseas.
Costa has positioned itself as a dominant grower and supplier, vertically integrated across four categories: berries, mushrooms, citrus and tomatoes generating 75% of its revenue from lower risk protected crops. It is also the only company in the world able to supply blueberries, the world’s fastest growing commodity, 52 weeks of the year from its four farms spread across Australia.
According to the Australian Financial Review a number of Japanese and Chinese buyers had been interested in purchasing the business for around 16 times its forecast earnings before the IPO roadshow began, but were too ‘slow moving’ for the Costa team.