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Driscoll’s take significant stake in Costa Group

Driscoll's, alongside a consortium led by Paine Schwartz Partners and including British Columbia Investment Management Corporation, has finalized the acquisition of Costa Group. The company's ownership officially changes hands today, after being delisted from the ASX earlier this month.

PSP became a shareholder of the publicly listed Costa on 25 October 2022 after it acquired a 13.78 percent interest. In July 2023, they made a buyout proposal, and in September, Costa Group announced its acceptance of the A$1.5 (978 USD) billion acquisition offer, which they said to align with an updated offer Costa received earlier in the same month, which was a reduction from PSP's original offer presented in July.

In January 2024, Costa's shareholders voted in favor of accepting the offer of AUD3.20 per share, as it was within the valuation range from independent expert Kroll, which valued the shares between $2.62 and $3.28 per share.

Costa was started in the late 1800s by the Costa family in Geelong, Victoria, Australia. It has since expanded its portfolio of fresh produce, including the growing, marketing, and supply of blueberries, glasshouse tomatoes, citrus, avocados, mushrooms, and table grapes. Its production and grower network spans every state of Australia, China, Morocco, and southern Africa. Costa products are sold into numerous countries around the world, including throughout Europe, UK, Asia, and North America.

Costa is active in the development of genetics and new plant varieties, especially blueberries. In 2023, it launched a record four new blueberry varieties.

According to their joint statement, this new ownership arrangement is part of a logical progression of the relationship between Driscoll's and Costa, which began in 2010. The two companies equally own a joint venture in Australia, which is now the leading marketer of blueberries, raspberries, strawberries, and blackberries in the country. Driscoll's also has an expansion program in the Americas using Costa blueberry varieties. In 2016, Driscoll's and Costa formalized a joint venture that oversaw the two companies starting a berry production company in China.

"The Costa team is looking forward to the future and working with its new owners, who, given their extensive background of investing in and operating high-quality agricultural assets, are committed to further building the business's capacity and ensuring its ongoing success," said Costa Group's Interim CEO, Mr Harry Debney.

"We welcome the Costa Group into the Driscoll's family and look forward to deepening our relationship with even more deliberate collaboration across the globe," said Soren Bjorn, CEO of Driscoll's. "This is one of the largest equity investments Driscoll's has ever made, which speaks to the formidable partnership and considerable value we see in the Costa portfolio and the company's long-term future and growth prospects."

To start, Driscoll's and Costa will be working on specific projects to grow the global berry business. Their existing arrangements in China, Australia, and the Americas will also continue to be unaffected.

Over the past few decades, Paine Schwartz Partners has invested $5.7 billion in agriculture and the food supply chain, which includes a prior equity stake in Costa. Its other investments include companies that grow fresh produce, such as Monterey Mushrooms, as well as ag-tech companies, including AgroFresh.

British Columbia Investment Management Corporation is a global institutional investor with $233 billion in gross assets under management. Its investment in agricultural assets includes an ownership stake in Viterra and mushroom and citrus businesses.

For more information:
Michael Toby
Costa Group
Tel.: +613 8363 9071

Solana Tanabe

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