Wolseley exits Freshmax to Maui Capital

This led Paine & Partners to pick up a 50% stake in Costa Group, Australia's largest fruit and vegetable producer, in a deal that closed in October. One month later, Germany's BayWa completed the acquisition of New Zealand fresh produce firm Turners & Growers. A number of investors who missed out on those deals turned to Freshmax, a fruit and vegetable business that covers Australia and New Zealand. The seller, Wolseley Private Equity, didn't lack suitors.

"We were approached by a broad range of people including some who were looking at these other businesses - a lot of trade players as well as potential financial investors," says Brendan Hill, the Wolesley director who sat on Freshmax's board. "Interest in the Australasian protein story is now extending into horticulture, driven by recognition of the value of clean and safe food."

Wolseley eventually opted for New Zealand-based private equity firm Maui Capital. Details of the transaction were not disclosed. Wolseley originally invested in Freshmax in 2006, reportedly taking a 50% stake. It added to its holding a year later and, given the size of the fund, the total capital commitment is unlikely to have exceeded A$15 million ($16 million). Maui has disclosed that it now owns approximately 60% of Freshmax. According to Paul Chrystall, the PE firm's managing director, the enterprise value is around A$80 million.

As to why Maui beat out competition for the asset, Chrystall suggests that it was because Freshmax's management team, who remain investors in the business, felt comfortable working with the private equity firm.
"We have a track record of trans-Tasman expansion; a track record of growing businesses in management buyout situations; and a track record of making money," he says. "Other parties would have needed to bring all that to bear and it's not necessarily possible if you are a trade player or if you are geographically removed."

Under Wolseley's tenure, Freshmax has evolved from a New Zealand-centric business to one that draws two thirds of its produce from Australia. The bulk of this is sold locally, but exports now account for around 15% of revenues. Annual revenue has grown to more than A$350 million from an initial base of A$100 million.

Wolseley also made half a dozen acquisitions through Freshmax, notably picking up De Luca Banana Marketing, Australia's largest banana marketing business, last year. Chrystall expects this trend to continue but he hasn't looked as far ahead as an exit yet, although there are likely to be plenty of strategic investors lurking.

"If you have a good business, people are trying to take it off you almost before you sign on the dotted line," he says.

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• Topics
• Australasia
• Exits
• Consumer
• Agriculture
• Wolseley Partners