New Zealand’s agribusiness company Scales Corp Ltd., in its public announcement has unveiled that it will be selling its cold storage business to Emergent Cold for over NZ$ 151.4 million. Reportedly, Scales is divesting its cold storage business, which consists of the Whakatu Coldstores & Polarcold Stores Limited, to better focus on its pure agribusiness.
Tim Goodacre, Chairman, Scales Corporation, revealed that the company has identified its three core strengths: operating fully-vertically integrated agribusiness; adding value through connections to the China market; and involving in businesses with an export focus. He further added that being less aligned to its core strengths, the overall returns from the storage activities are relatively low compared to other business divisions and opportunities presented to the group.
According to Goodacre, the company does not intend to return capital to the stakeholders, however, it will be using the proceeds to pursue other attractive opportunities in the New Zealand agribusiness.
Sources cite that the deal is subject to Overseas Investment Office approval.
For the record, Scales Corp., is a diversified agribusiness group and comprises three main operating divisions: storage & logistics, horticulture, and food ingredients. It is New Zealand’s second biggest exporter of premium apples, behind T&G Global.
Emergent Cold on other hand is a leading player in the cold chain market that provides supply chain services to global retailers and food companies. Operating in Australia & Vietnam, Emergent Cold aims to create a leading global frozen & fresh cold chain network.
Commenting on the deal, Emergent Cold CEO Neal Rider asserted that Scales has established a leading business in the New Zealand cold chain industry and the company is pleased to work with Scales’ outstanding management team to further expand its business in the New Zealand and Asia Pacific markets.
In the recent trading, Scales increased 0.2% to USD 4.76.