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RNZ News
3 days ago
- Business
- RNZ News
New Zealand's largest mānuka honey producer considers rich lister's takeover bid
Photo: 123rf New Zealand's largest mānuka honey producer Comvita is eyeing a company sale, amid challenging times in the global honey sector. The listed health and wellness company announced on the NZX on Monday morning that its board voted in favour of a bid by Florenz, a subsidiary of investment firm Masthead, to buy the struggling business that just celebrated 50 years in operation. The bid would see shareholders receive a cash price of $0.80 per share, representing an equity value of $56 million and an enterprise value of $119m. The proposed sale would privatise the listed company. The takeover offer came amid extremely challenging times for the company and the wider honey sector in recent years, as international customers stockpiled honey through the Covid-19 pandemic and became increasingly competitive on price. In late July, producer King Honey, that was bought by wellness company Me Today in 2021 for $36m, was put into liquidation and receivership due to the global honey glut , among others. Comvita's performance was marred by recent losses, with the latest an after-tax loss of $77m for the 2024 financial year. It expected to report a further significant loss this financial year next Friday. and while it earned modest profits of between $9m and $13m dollars in 2021 to 2023, it followed further losses in 2020 and 2019. The company restructured, saving up to $15m through 2024/25 by reducing the headcount of its leadership and board of directors, staff by 67 people and closing offices. But Comvita chairperson Bridget Coates said the efforts were not sufficient to strengthen the balance sheet for long-term sustainability. "Comvita has faced ongoing pressure from structural changes in the mānuka honey sector, which continues to face oversupply, price and demand volatility and intense competition (including online)," she said in a statement. "The environment is fragmented, with several participants under financial strain. Industry dynamics require consolidation at pace, but sector leadership demands capital strength, scale and speed, which are not available to Comvita under its current capital structure." Coates said the proposed sale would provide "certainty in a time of sustained challenges" in the mānuka honey sector. She was meeting with shareholders on Monday, who must approve the sale proposal as well as the High Court and an independent advisor for the sale to proceed. A management shake-up this time last year saw then chief executive and managing director David Banfield resign, with board chairman Brett Hewlett taking up his role in the interim, and independent director Bridget Coates appointed as chairperson. Karl Gradon left Taupō-based milk processor Miraka to become chief executive at Comvita, effective from 1 August, just over two weeks before Monday's announcement. The company said shareholders China Resources Enterprise and Li Wang, who together owned approximately 18.3 percent of Comvita shares, supported the transaction. Further details and analysis of the offer would be released to shareholders in October, ahead of the shareholder meeting in November. The new scheme would be implemented in December if all conditions were satisfied. Florenz exported vitamins, supplements, pre-workouts, neutraceuticals and herbal remedies, and the company said in a statement the move to buy Comvita would create "the world's largest seller of mānuka honey products." Owner Masthead's chairman and Christchurch rich-lister Mark Stewart said the fundamentals of Comvita remained strong and it was committed to accelerating its growth. "While Comvita has faced challenges in recent years, the fundamentals remain strong. We believe privatisation - enabling substantial debt repayment, an injection of world-class leadership capability, and a sharper focus on high-value product innovation - will deliver a new chapter of growth." One of its latest acquisitions was Wedderspoon Organic Group it bought last year, one of North America's top-selling mānuka honey wellness brands with its range of honeys, lip balms and lozenges stocked in over 23,000 stores. Florenz chief executive officer, Mike Tod said the combination of Comvita and Wedderspoon would create the scale and efficiencies needed to accelerate both brands globally. "This acquisition will strengthen our ability to support global wellbeing through trusted, science-backed products," he said. "Comvita's commitment to innovation, quality, and sustainability perfectly aligns with the values that guide our export growth strategy. We are proud to have the opportunity to keep this iconic company under New Zealand ownership." Comvita was co-founded in the mid-1970s by Alan Bougen and Claude Stratford in Bay of Plenty village Paengaroa and grew to become a leading mānuka honey and bee consumer products business. The B Corp-certified company employed more than 400 people globally across Australia, China, North America, Southeast Asia and Europe, and had more than 1.6 billion bees. 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NZ Herald
3 days ago
- Business
- NZ Herald
Comvita receives takeover offer from Mark Stewart's Florenz worth $56.4 million
Comvita chair Bridget Coates said the board supports the offer, given the premium to recent trading, the greater certainty it provides amid sustained sector, structural and financial challenges, and the liquidity it offers given historically low trading volumes. 'Recent years have been challenging for Comvita and its shareholders, with sustained sector pressures, softer market conditions and the demands of a complex turnaround weighing on performance. The board understands the impact this has had and the importance of delivering a clear, decisive path forward,' Coates said. 'Industry dynamics require consolidation at pace, but sector leadership demands capital strength, scale and speed, which are not available to Comvita under its current capital structure.' Comvita was founded in 1974 and has a team of more than 400 people globally, with more than 1.6 billion bees. Photo / Supplied Coates said significant capital had been invested in brand equity, distribution reach, supply security and scientific credibility to position Comvita for this opportunity. However, a number of these investments did not meet their objectives or deliver expected returns. The business has also taken urgent steps to reduce costs, simplify operations and protect long-term brand strength, which Coates said are delivering early results. 'However, these factors alone are not sufficient to strengthen the balance sheet or position the business for long-term sustainability.' 'Comvita's lenders are providing short-term accommodation but have signalled that a longer-term solution - through debt repayment or potential strategic transactions - is required.' Coates said the board, with its independent advisers at Craigs Investment Partners and Goldman Sachs, had acted with urgency to consider all strategic options available, including potential acquisitions by financial sponsors and strategic trade buyers, subordinated debt issuance and an equity capital raise. While the board could pursue a capital raise or refinancing, Coates affirmed that the takeover offer accelerates a capital return to shareholders, mitigates execution risk over the turnaround and offers a clear alternative to the capital constraints and prolonged timeframes of a continued standalone strategy. 'It also provides shareholders with a full exit opportunity in a stock with historically low trading volumes, which the board believes many shareholders will find attractive.''Florenz brings the capital strength and scale needed to operate in this environment and accelerate Comvita's growth under a consolidated model. They have expressed their commitment to Comvita's global team, growing its New Zealand operations, investing in its international markets and lifting the brand's profile on the world stage.' The deal is subject to Comvita shareholder approval, High Court approval, an Independent Adviser's Report concluding that the deal's consideration is within or above the valuation range for Comvita shares, and other customary terms and conditions. Comvita's board expects its shareholders to be able to vote on the deal at a meeting expected to be held in November 2025, with a successful vote leading to implementation in December 2025. Previous offers It's not the first time a takeover offer has been presented for Comvita. Back in 2018, an unidentified third party undertook due diligence to assess the business. However, that process came to an end after Comvita said the two parties 'could not bridge the considerable distance between us on price.' Prior to that in 2011, the business received a $72m ($2.50 a share) takeover offer from Singapore-based Cerebos Pacific. Cerebos Gregg's chairman Trevor Kerr said at the time that the company had a long-term view of Comvita and would focus on sales growth and achieving higher value for its manuka honey. However, Comvita's board rejected the bid, arguing that it was opportunistic and undervalued the company. In June reported a net loss before tax for the year ending June 30, 2024 of $21.6m. That excluded an impairment and other asset write-downs, which came to $64.2m. Its restated 2024 net loss before tax was $85.8m. Comvita also forecasted a net loss before tax of between $20 million and $24m for the June 2025 year, excluding any impairment, which was substantial last year. Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
