July 31, 2015

Aussie produce company Costa Group raised A$550 million in its market debut on the Australian Securities Exchange, representing the second largest new issue in the country year to date. The stock was priced at A$2.25 per share, which according to Reuters was at the low side of a target range that extended to A$2.70 per share.

Costa Group, which operated as a family owned business for a full century, was acquired by Paine & Partners in 2011 as part of the private equity firm’s fund III. Paine & Partners, which is dedicated to investing in food and agribusiness worldwide, remains the newly public company’s largest equity shareholder with a 12 percent equity stake.

“We have worked closely with [Costa chief executive] Harry Debney and the rest of Costa’s management team to hone business strategy, invest in growth in key business segments and expand internationally. Harry and the team have nailed the execution and we look forward to continuing to maintain a significant investment in the company,” according Kevin Schwartz, president and a founding partner of Paine & Partners, in a press release. Schwartz will remain on Costa’s board of directors.

Paine & Partners’ Influence

Paine & Partners has provided industry experience and capital to Costa Group, leading the portfolio company to shift its focus to areas of competitive strength, including berries, mushrooms, snacking tomatoes and citrus, the press release indicates. Costa also began investing more heavily in protected cropping, which involves growing fruits and vegetables in glasshouses, indoor mushroom farms, beneath tunnels and in substrate, an area that now represents three-quarters of produce profits.

Paine & Partners played a major role in Costa’s purchase of Adelaide Mushrooms, which expanded the portfolio company’s stake in the Aussie mushroom market to about 40 percent. Meanwhile, the private equity firm also helped Costa refinance debt so the company could direct more capex to its berries and snacking tomatoes offerings.

“With their industry expertise, financial resources and global industry connections, Paine & Partners has enabled us to build on our core businesses, enhance our operations and expand into new markets.  We look forward to continuing to benefit from their support as we begin this exciting next phase of Costa’s growth and value creation,” said Debney in the press release.

Goldman Sachs and UBS were joint lead managers on the IPO.