Cooks enters agreement to acquire progressive processors
Cooks Food Group (Cooks) is pleased to advise it has entered a conditional sale and purchase agreement to acquire the business and assets of Progressive Processors Limited.
The agreement is subject to approval by Cooks shareholders under the Companies Act 1993 and the NZAX Listing Rules.
Approval will be sought at the same time as approval for the acquisitions of Franchise Development Limited, Esquires Coffee (UK) Limited and Esquires Coffee Houses Ireland Limited which have previously been announced. It is intended to hold the shareholders meeting in September.
About Progressive Processors
Progressive Processors is based near Whakatane and grows, supplies, processes and adds value to a number of fresh fruits and vegetables including asparagus and kiwifruit. It supplies product domestically and also to export markets, particularly Japan.
It is owned and operated by Mr. Neil Butler who will continue as the general manager of Progressive Processors. Progressive Processors has nine permanent staff and engages a number of seasonal workers on a casual basis.
Acquisition Rationale
In addition to acquiring the offshore Esquires Coffee Houses business, it is Cooks’ intention to acquire supply businesses in the food and beverage sector. This is so they can operate in their own right and also act as suppliers of product to Esquires Coffee Houses in regions where it is economic to do so.
It is considered this approach will be beneficial to Esquires Coffee Houses as it will ensure the goods supplied are high quality, consistently branded and marketed and profitably priced with the security of a self-managed and efficient supply chain.
Acquisition Terms
It has been agreed to acquire the business and assets of Progressive Processors for shares in Cooks. No cash component will be payable for the acquisition. It is proposed that a first tranche of 2.5 million shares will be issued at completion with three further tranches of shares to be issued over the next three years.
The final acquisition price (and number of Cooks shares that will be issued to satisfy it) will be based on the net profit after tax of Progressive Processors that is achieved over the next three years. Full details will be provided with the Notice of Meeting to shareholders.
Cooks chairman Keith Jackson says the acquisition of Progressive Processors affirms Cooks’ commitment to being a kiwi company that exports quality products to the world.
“And that includes through the Esquires Coffee Houses network which we will seek to substantially grow. We are delighted to welcome Neil and his team to the Group and look forward to formalising all transactions shortly.”