Wet weather continues to weigh heavily on the fortunes of Australia's largest vertically integrated fresh produce company Costa Group, but today it is seeing a spot of sunshine with US-based sustainable food chain fund Paine Schwartz Partners acquiring a 13.78 per cent stake.
During its after-market acquisition yesterday, Paine Schwartz indicated to investors via its broker that it planned to obtain an interest of up to 15 per cent in Costa Group at a price of $2.60 per share.
A notice of substantial holder published this morning indicates new investor spent approximately $161 million on its initial stake, prompting a 9 per cent lift in the CGC share price today at the time of writing.
The investor is however not so new to Costa - under its former name Paine + Partners, it was a majority owner of the company prior to its 2015 initial public offering (IPO) on the ASX, having taken its first equity stake in 2011. Upon listing it held 12.4 per cent, but in 2017 sold enough to be below the substantial shareholder threshold.
The latest investment appears to reflect a broader trend globally of consolidation in the plant genetics space, with fresh produce industry investors, growers and marketers vying for ownership of premium varieties across a wide range of crops, and to a lesser extent improved access to markets and sophisticated farming operations.
In Costa's case, this includes one of the world's leading blueberry breeding programs with varieties such as Arana that are licensed to growers around the globe.
Source: businessnewsaustralia.com
