KEY POINTS:
Charlie's Group is spending A$2 million ($2.3 million) to buy and expand the beverage-manufacturing assets of the Australian Gallard and Mirage groups.
Charlie's said today that the move allowed it to expand its juice-processing and bottling in Australia, with long-term security of fruit supply.
The deal was due to be completed in mid to late September.
Charlie's chairman Ted van Arkel said the acquisition underscored the group's "acquisition for growth" strategy.
"Our policy is to acquire companies that fit with the growth and strategic objectives of the group. They must not only give us a long-term earnings stream but also offer a strategic advantage in our market," he said.
The A$681,230 acquisition along with a plant expansion of A$1.3 million allowed Charlie's to manufacture its bottled "not from concentrate" range close to the fresh fruit source more cost effectively on a specialised bottle production line.
Charlie's said it had a two-year relationship with the Gallard family who supplied their citrus for the company's beverages.
The deal with Gallard included a long-term fruit-supply agreement, the lease of a manufacturing site and the purchase of assets enabling the juicing, processing, and bottling of fruit juices and smoothies at Renmark, near Adelaide in South Australia.
Gallard operated out of a 125ha property in the Riverland region by the Murray River, with an average annual output of 6000 tonnes of citrus fruit, including valencia and navel oranges, lemons and limes.
The family would continue to own and operate the Gallard Orchard to supply Charlie's juicing citrus requirements, in an arrangement that would become exclusive over time.
The A$2m total cost to Charlie's would be funded through operating cash flow and an ANZ debt facility.
Charlie's shares were up 0.4c around noon today to 18c. In the past year the price has ranged between 25c and 9c.
- NZPA
