Local media reports said the Malaysia based investors agreed to pay nearly NZ$300m (US$242m) for the poultry company.
The deal is subject though to New Zealand’s Overseas Investment Office (OIO) approval, which normally takes around three months. Under the agreement, the founding shareholders of Mainland Poultry will keep a significant stake in the business and senior managers are to stay on.
Navis Capital, flagging up its “extensive experience in poultry businesses, with significant portfolio investments in chicken and duck operations in the UK, Europe, Thailand and China,” said it wants to transform Mainland into “a pre-eminent agribusiness in the Oceania region and expand export links in Asia.”
"Feed is a very important part of the Mainland business. Export strategies for both eggs and feed will be explored," Philip Latham, partner, Navis Capital, told us.
"Navis, being a private equity business, manages funds which have a life of approximately 10 years. As a result it is likely that the business will be owned for at least 5 years," he added.
The private equity group, with funds around USD $5bn under management, is focused on buyouts and financial restructurings in Asia Pacific. It bought Thai poultry business, Golden Foods Siam, in 2009 but sold it to Brazil’s BRF six years later, in 2015, for about $360m.
Egg and feed operations
Mainland, which was founded in 1997, has about 1.2 million layer birds across its operations in New Zealand.
The business has two integrated divisions: Zeagold, the eggs division, is the largest egg and egg products producer in that country, producing 36 million dozen egg equivalents annually. It supplies supermarkets and food service distributors daily with fresh eggs and refrigerated and frozen egg products. MainFeeds, the feed division, supplies over 140,000 tons of non-ruminant feed to the Zeagold division and external customers.
Bidding war
Australia's largest private equity firm, Pacific Equity Partners, as well as investors, Adamantem Capital, were reportedly among several companies that had been bidding for the Dunedin-based integrated company, according to a report in Otago Daily Times.
In February, Mainland announced it had retained the ANZ Bank to advise on options for the business, given its capital expenditure requirements.
Shareholders had been weighing up ways to generate capex as significant monies were required to replace equipment so Mainland could comply with new animal welfare regulation for layers that seeks the staged phasing out of battery cages in preference for larger colony cage systems or free-range operations.