Charlie's completes purchase of Phoenix Organics

Stefan Lepionka

Charlie's today completed its purchase of fellow juice company Phoenix Organics for $10 million.

Phoenix Organics produces a range of organic juices and sparkling drinks.

Charlie's will own these brands, as well as Phoenix's west Auckland manufacturing and warehousing facility.

Chairman Roger Gower said he was delighted to have sealed the deal.

"This sends a clear signal to the other players in the market that we are serious about living up to our potential as New Zealand's number one distributor of premium beverage brands," he said.

The $10 million will be paid in cash in two instalments. The first instalment of $8 million will be paid on December 29, with the remaining $2 million due on February 28 next year.

The purchase will be funded from the company's resources, including calling on its recently announced equity loan facility and a placement of $3.5 million of shares.

Through the purchase Charlie's will get access to Phoenix's route distribution system which caters to more than 3500 cafes and high end retail outlets in New Zealand and Australia.

At this stage Charlie's plans to maintain the current Phoenix brands and keep on its staff and management., but further integration will be looked at down the track.

CEO Stefan Lepionka said Charlie's will now take a few breaths before continuing with consolidation plans in 2006.

"We've launched a whole new range of Charlie's smoothies, added new products and sizes to our juice range, run a new, controversial advertising campaign and bought a fantastic company.

"Now is a good time to take stock," he said

The purchase comes just two months after Charlie's ditched plans to buy speciality juice and smoothie brand Arano.

On September 28, Charlie's announced it had entered into three separate conditional agreements to buy the component businesses and brands associated with Arano. The deal would have cost Charlie's $4.65 million in cash and 6 million Charlie's shares.

Charlie's decided not to go through with that purchase following extended due diligence.

Shares in Charlie's were up 1c at 13c just before midday.

- NZPA