22 May 2014

Sweet deal for Comvita

1:00 pm on 22 May 2014

Comvita's shares have risen more than 9 percent after it bought New Zealand Honey for $12.3 million, helping it to secure its supply of manuka honey.

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Bees at work Photo: RNZ / Diego Opatowski

It bought the company from the New Zealand Honey Producers Co-Operative, including all of its land honey processing facilities in Timaru, the honey inventory and a long-term honey supply agreement with the co-operative.

New Zealand Honey is one of the largest exporters of honey products with total sales of $27.3 million in 2013.

Comvita chairman Neil Craig, said the move will take its ownership of the very long-term supply of the manuka it requires from about 35 percent, to just above 50.

The deal is a mixture of cash and shares, with Comvita paying $7.3 million in cash, and remaining $5 million in Comvita shares issued at $3.50 each.

The shares will be held and released to the Producers Co-operative annually over six years.

On Thursday morning, the shares rose as high as $3.50, up 30c.