Purchase eases Comvita's supply constraints

Listed natural health company Comvita has paid $12.3 million for Timaru-based New Zealand Honey Producers Co-operative, which should ease recent supply constraints.

Comvita shares rose 28c, or 8.75%, after the announcement to trade at $3.48.

The co-operative, founded in 1981, is owned by 70 South Island beekeepers, and has the brands Hollands Honey, 3 Bees and Sweet Meadow. It had total sales of $27.3 million in 2013.

The price comprises $7.3 million cash and $5 million in Comvita shares to be released over six years.

Comvita has sourced its honey mainly in the North Island.

Chief executive Brett Hewlett said yesterday the purchase, which is conditional on co-op shareholder approval, would provide ''valuable production capacity'' and boost company exposure in the South Island.

 

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