Buddle Findlay's $12.3 million deal sweet as honey

by Mackenzie McCarty30 May 2014
Global natural health products company Comvita has signed a sale and purchase agreement to acquire all the shares of New Zealand Honey Ltd from New Zealand Honey Producers Co-Operative Ltd – and the Buddle Findlay team who advised on the deal say it presented some unique challenges.

Buddle Findlay corporate/commercial partner Grant Dunn acted for NZ Honey Producers Co-Operative in selling its subsidiary to NZX-listed Comvita in a cash and share deal worth $12.3 million. He tells NZ Lawyer the firm was approached due to its “experience and reputation”.

“We have developed strong relationships within the agriculture sector, particularly acting for co-operatives,” says Dunn. “I've done a lot of work over the last few years for co-operatives in the kiwi fruit sector as well as the mammoth Farmlands/CRT merger in rural supplies last year.  We also have direct experience in the honey industry.  We act for the Unique Manuka Factor (UMF) Honey Association, so understand what's going on and the challenges in the industry.”

However, despite the firm’s experience in agricultural transactions, Dunn says this deal did offer-up some learning curves.

“The unique (and interesting) aspect to this transaction was the negotiation of a long-term honey supply agreement.  It will be the document that establishes the relationship between the New Zealand Honey Producers Co-Operative and Comvita for many years to come, so a lot of thought went in to putting it together to ensure it was both practical and future proofed.”

The deal is conditional on the approval by special resolution of the beekeeper shareholders of NZ Honey Producers Co-Operative.

The acquisition included land and honey processing assets in Timaru, honey inventory and a long term honey supply agreement with the co-operative.

NZ Honey makes and sells products under the Hollands Honey, 3 Bees and Sweet Meadow brands and is one of the largest exporters of New Zealand honey products, with total sales in 2013 of $27.3 million.

The co-operative was established in 1981 and has grown to become one of the country's leading suppliers of honey products.