Sharechat Logo

ArborGen Holdings Limited (NZX: ARB) ArborGen Holdings Announces Sale of ArborGen's ANZ Business

Monday 1st November 2021

Text too small?

ArborGen Holdings Limited (NZX: ARB ) (the Company or ArborGen) has entered into an agreement to sell ArborGen ANZ for NZ$22.25m to Geyser Limited Partnership (Geyser).

The transaction has arisen as a result of the strategic review being undertaken by the Company (as announced on 30 June 2021 https://www.nzx.com/announcements/374791). The Company engaged PwC to assist with the strategic review.

ArborGen ANZ is an operationally separate and significantly smaller operation than ArborGen’s US business. It is forecast to contribute approximately 15+% of Group Revenue in FY’22, but has a lower growth profile compared to ArborGen’s other markets. ArborGen ANZ is currently operating at around its maximum combined productive capacity of approximately 30 million tree stocks per annum in NZ and 5.5 million per annum in Australia, and further expansion of capacity to grow the core forestry and horticulture businesses would require significant additional capital spend. The Board believes that sale proceeds are better deployed in higher growth markets in the US and Brazil.

The Company’s core strategy is to grow the sales of its higher margin proprietary advanced genetic products (Mass Control Pollinated (MCP) and Varietals) in the United States where there is significant identified potential to grow market share and drive advanced genetics adoption. Further investment in the US comes at a time when that business is poised to benefit from decades of investment in developing best-in-class proprietary MCP products, expanding supply through orchards expansions across the US South, and upgrading both industrial and private landowner customers to MCP seedlings. The Company confirms that it continues to be on track to deliver its highest MCP sales year in the US this year with year-to-date MCP sales orders now at approximately 105 million seedlings, 25 million units higher than the prior year. In particular, MCP unit sales to the private landowner segment, where the majority of MCP sales growth will occur are projected to be up over 45% compared to prior year.

Further investment in Brazil comes at a time when ArborGen has grown to become one of the largest commercial suppliers of eucalyptus and loblolly pine seedlings, benefitting from increased recognition of its proprietary advanced genetics, and strong pulp and charcoal markets.

Please see the links below for details

ArborGen Holdings Announces Sale of ArborGen’s ANZ Businesses

Grant Samuel Independent Appraisal Report in Relation to The Proposed Sale Of ArborGen ANZ

Source: ArborGen Holdings Limited

 



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

TWL - Resignation of Chief Operating Officer
NZA - Funding arrangements following Board changes
August 9th Morning Report
August 8th Morning Report
BIF - Potential material valuation increase for the fund
Nominations open for Fonterra Board of Directors' Election
Heartland market update
TGG - Half Year Results 2022
GSH completes acquisition of Viaduct Venue
August 5th Morning Report