PGG sells one business, buys another
By Phil Boeyen, ShareChat Business News Editor
Rural group Pyne Gould Guinness (NZSE: PGG) has sold a loss-making wool scour business for $2 million and bought an Ashburton livestock firm for an undisclosed price.
The Dunedin-based wool scour and wool dump operations have been sold to Southland firm Clifton Wool Scour in a deal that PGG boss George Gould says is a logical move.
"We were minor participants in the wool scour and dumping industries, and losing money in the process. Both industries are competitive and better suited to specialist operators.
"While this transaction is not material with respect to PGG's financial position or performance, the net effect is still positive The sale leaves PGG free to concentrate on wool brokering which is our specialist expertise."
If the company had held onto the businesses Mr Gould said it faced investing significant capital. The alternative was to exit on favourable terms.
"In this context by far the best outcome for PGG clients and shareholders was to sell to a specialist and vertically integrated operator such as Clifton."
Further north the company has purchased Ashburton-based Stapletons Livestock, which it says is a strong and successful independent livestock trading company.
"Whereas Stapletons Livestock had benefited from its independence, its owners, directors and shareholders firmly believed that the client base of both companies will benefit in several ways from PGG and Stapletons Livestock coming together," Mr Gould says.
The acquisition is described as a strategic opportunity to enhance the company's market share.
Comments from our readers
No comments yet
Add your comment: