Tuesday 27th August 2013
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Pukekohe-based vegetable grower Balle Bros Group has acquired potato processor Mr Chips from a unit of Boise, Idaho-based JR Simplot for an undisclosed amount.
The deal will return Mr Chips, which traded on the New Zealand share market from 1993 to 2008 when it was taken private by Simplot Australia, to local control for the first time in five years.
Simplot paid about $71 million for the business in 2008, amounting to about 7.5 times earnings before interest, tax, depreciation and amortisation. Mr Chips had a profit of $5 million in the March 2008 year on sales of about $57 million.
In the year ended Sept. 1, 2012, Simplot Mr Chips had sales of $56 million and posted a net loss of about $22 million including a $17.6 million impairment to goodwill, according to statements lodged with the Companies Office. It made a loss of $22 million a year earlier, on sales of $63.9 million.
Mr Chips processes about 30,000 tonnes a year of French fries and has capacity to process 80,000 tonnes of potatoes. About 40 percent of its output is sold in Australia. For Balle Brothers the purchase renews a relationship that dates back to 1981 as a supplier and as a shareholder of the listed company from 1993. It continued to hold a stake after Mr Chips was taken private, exiting in 2010.
"We see potential further out to add additional product lines and pursue further exporting opportunities," managing director Dacey Balle said in a statement.
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