by Noel Murphy
GEELONG-based Costa Group is poised to launch an initial public offering (IPO) of shares to raise half a billion dollars or more as the private produce giant prepares to list on the stock exchange.
Consultants Goldman Sachs, UBS and CBA Equities are issuing research reports prior to a float launch expected any day and ASX trading next month.
The IPO follows lengthy deliberation over a full private sale as the Costa family’s ageing heavyweights eye retirement and a public float.
The group has been half-owned since 2012 by the
US private equity firm Paine & Partners bought half the group in 2012. Brothers Robert, Frank and Anthony Costa own the other 50 per cent but retained overall control under the deal.
Robert Costa told the Independent recently that an overseas buyer could be good for the company, injecting capital, driving growth and underpinning long-term prospects.
But he said an IPO would allow Costa Group to retain a percentage of the company whereas a trade sale tended result in a 100 per cent offloading of ownership.
Either way, Mr Costa saw “nothing intrinsic” that would change the group’s management structure.
Costa Group employs 7000 staff and exports 20 per cent of its produce. The group has expanded into overseas operations including blueberries in Morocco and China.
The group grows 75 per cent of its produce under cover, indoors or in tunnels or greenhouses.
The company’s Geelong roots date to 1888 when the brothers’ great uncle set up produce grocery Geelong Covent Garden, which he ran until the 1920s when he transferred the business to their father.
Today the group is the country’s largest grower of tomatoes, table grapes, citrus fruit, blueberries, raspberries, bananas, mushrooms and other fruit and vegetables.
Costa Group supplies Coles and Woolworths, independent grocers and other industry players, with some 20 per cent of its produce sold overseas to to Asia, Europe, North America and South America.
