Blue Sky to buy Clover

The deal will give Blue Sky Meats more processing capacity and attract new suppliers. Picture / NZME.

Acquisition will add beef and venison capacity.

Blue Sky Meats, whose shares trade on the Unlisted platform, has agreed to acquire Gore-based Clover Export, adding processing capacity in beef and venison to the range of services it can offer to sheep and bobby calf customers, while attracting new suppliers.

No price was disclosed for the transaction. Chairman Graham Cooney says Clover is about 10 to 15 per cent of the size of Blue Sky in terms of turnover. Blue Sky's revenue was $95.3 million in its 2014 year. More details may be given in the company's annual report after its March 31, 2015, balance date.

Clover's owners include European shareholders and, as part of the deal, Blue Sky has agreed to continue with Clover's horsemeat processing on a toll basis for sale into the European market.

Horsemeat would be a small ongoing business, amounting to about "a day a month", Cooney said. "This acquisition allows us to process all species for our clients."

Buying Clover soaked up existing processing capacity in the New Zealand market and was a better option than building more, he said.

"This purchase effectively removes an export licence holder out of the New Zealand processing scene and therefore assists industry rationalisation."

Invercargill-based Blue Sky ended talks with meat co-operative Alliance Group at the end of 2013 about a possible merger.

In April, two Chinese businessmen based in Auckland bought 11 per cent of the company for $2.33 million, or $1.80 a share, in an off-market share transfer to become the third-biggest shareholder after Lowe Corp and HW Richardson Group.

Blue Sky shares last traded at $1.80 and have gained from $1.20 in the middle of the year.

- BusinessDesk