Costa agrees to buy Avocado Ridge

Australian horticultural company Costa Group has agreed to take over Queensland-based Avocado Ridge orchards and packing operations from the Carney family.

Financial details of the acquisition have not been revealed by either company.

A grower of avocados in the Childers and Kumbia regions of central Queensland, Avocado Ridge currently supplies to the retail market across the nation.

The company has agreed to acquire the farm in conjunction with Macquarie Agricultural Funds Management (MAFM).

According to the agreement, MAFM will purchase the farms and enter a 20-year lease with Costa to operate them.

It is also the first agreement between the two parties to jointly consider M&A projects.

Costa CEO Harry Debney said: “This acquisition is a first major step in Costa’s strategy to vertically integrate our avocado category.  It will add significant growing capacity to our existing plantings, and ripening and marketing functions.  

"Avocados will become a truly vertically integrated fifth pillar complementing our existing core produce categories of berries, mushrooms, citrus and glasshouse tomatoes.

“Our focus is to be number one in the categories that we operate in where there are opportunities for us to create a genuine market difference and to ultimately achieve a 52-week production situation. We believe avocados is a very strong growth area that fits these criteria.”

Debney further explained that the acquisition is the first major step in Costa’s strategy to realise vertical integration in its avocado category.

The Carney family will continue to stay in the business and perform key management and operational roles, utilising their extensive experience and knowledge of successful avocado production, as well as the local growing climate.

Debney further noted: “Costa has been exploring opportunities to expand our core produce categories and we identified the Carney family and their proven operation as being an excellent fit with our business model.  The Avocado Ridge farms network is largely comprised of young trees, which provide a strong growth trajectory into the future."

The company anticipates that the acquisition will be completed next January.