The Costa Group, Australia’s largest producer, packer and seller of fresh vegetables and fruit is seeking to raise between $541 million and $637.4 million in one of the biggest listings of the year to date. The listing is being launched at a time of heightened volatility for the stock market, which has caused other companies to pull their floats in recent months.
The 126-year old company will be selling a 75% stake in the business and has set a price range of $2.20 to $2.70 per share for the float, which is 14.8 – 17.6 times the forecast net profit after tax for the 2016 financial year. If successful, this float will see Costa list with a market capitalization of between $703.9 and $839.4 million. This will place Costa within the ASX 200, comprised of the country’s top 200 largest listed companies.
Currently, Paine and Partners owns a 54.2% stake in the business, while the Costa family owns 45.8% stake. Major Costa shareholder, U.S.-based private equity firm Paine and Partners, will retain a 12.4% stake, and the Costa family will retain a 10.5% stake, with a potential value of approximately $88 million.
Mr. Costa, who had headed the company for 50 years will be named a non-executive director, and the newly listed company will be chaired by outgoing Virgin Australia chairman, Neil Chatfield.
In a letter to potential investors Mr. Chatfield expressed “Costa’s portfolio aims to be broad enough to mitigate agricultural and market risks while maintaining a focus on exceptional quality, high-growth and high-value fresh produce categories.”
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