ArborGen, in which NZX-listed Rubicon has a 31.67% stake, is the largest supplier of seedlings in New Zealand.
It sells up to 25 million trees annually, predominantly in the North Island, and owns five production nurseries, two seed orchards, and a manufacturing facility for the production of radiata varietal seedlings.
Edendale Nursery grows seedings for large corporate forest owners, forest managers, consultants and farm foresters in Otago and Southland, with the capacity to produce up to 10 million seedlings annually.
The acquisition enabled ArborGen to supply customers throughout both the North and South Islands, while Edendale Nursery's customers would benefit from the extensive investments the company had made to develop seedlings with superior genetics for planting in New Zealand's forests, ArborGen's general manager of Australasian operations, Greg Mann, said.
ArborGen was specifically sought by the nursery's owners to take over the business.
Edendale Nursery (Southland) Ltd managing director Ron Hinton said they were very pleased to know the business they had worked so hard to develop since 1987 would continue to grow and develop.
The nursery's land would be leased from the present owners with ArborGen holding an option to purchase the land.
ArborGen Australasia is a wholly owned subsidiary of ArborGen Inc which has its headquarters in the United States. ArborGen operates from 20 locations and produces 350 million tree stocks annually.
Approval for the transaction had been received from the Overseas Investment Office.
The excellent run for forestry prices seems set to end, ASB rural economist Nathan Penny says.
In the latest ASB Commodities Weekly, Mr Penny said the string of record prices had attracted Russian and North American supply back to the Chinese market and that should put a cap on further price rises, if not lead to a fall.