Comvita buys out major honey supplier

Paengaroa based health products company Comvita has signed a $12m sale and purchase agreement with New Zealand Honey Ltd.

Comvita announced this morning it will acquire all the shares of New Zealand Honey Ltd from New Zealand Honey Producers Co-operative Ltd.

The acquisition comprises all of the assets of the Company, including land and honey processing assets in Timaru, honey inventory at settlement and a long term honey supply agreement with New Zealand Honey Producers Co-operative Ltd.

Total sales in 2013 for New Zealand Honey Ltd were $27.3 million.

It produces and sells products under well-known brands Hollands Honey, 3 Bees and Sweet Meadow and is one of the largest exporters of New Zealand honey products.

The purchase price is $12.3 million, subject to a working capital adjustment and will be payable with $7.3 million in cash and $5 million in Comvita shares issued at $3.50 a share.

The acquisition is expected to be earnings accretive per share for Comvita's shareholders and is anticipated to be completed mid-June 2014.