AUSTRALIA – Costa Group (ASX:CGC), Australia’s leading horticultural company, announced that it acquired Lankester Avocado orchards and packing operations from the Lankester family.
The strategic acquisition is another step in executing Costa’s strategy to build avocados into the company’s fifth vertically integrated core produce pillar, said Harry Debney, Costa Group CEO.
“Our production and supply period will now span from February to August, bringing us closer to achieving 52 week supply and our ultimate goal to be the number one grower, packer and marketer of avocados,” said Debney.
Lankester Avocados is a grower of high quality avocados with three farms located in the Atherton region of Far North Queensland. The business also undertakes packing and marketing activity for third party growers.
There are total plantings of 130 hectares across the three farms with the season running from February through to June. An additional 60 hectares will be planted over the coming 12 months.
“With the current circa 370 hectares of avocados Costa has in central Queensland and the South Australian Riverland, this acquisition will bring the Company’s total plantings to circa 500 hectares and allow us to continue to build our production scale”, said Debney.
The acquisition agreement has been entered into in conjunction with Macquarie Agricultural Funds Management (MAFM).
Under the agreement, MAFM will purchase the farms and enter into a 20-
year lease with Costa to operate them. This is the second acquisition under an arrangement between the two parties (announced in December 2016) to jointly consider M&A projects.
The Lankester family will remain with the business to perform key management and operational roles.
“The Lankester family have been in the Atherton region for many years and they have built their business into one that has a strong market presence with opportunity for future growth, which Costa found to be an attractive proposition when considering our next avocado investment”, said Debney.
The acquisition is expected be completed by the end of July 2017. – BusinessNewsAsia.com