Costa Group (CGC) $3.40

UPDATED 23/06/2021 16:48

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CGC: shares in the fruit grower will spend Wednesday in a trading halt as it looks to fund the acquisition of 2PH Farms for an initial $219m. The business is a Queensland mandarin grower with around 1,500 hectares of citrus plants, with around 50% younger than 5 years old, and another 210 hectares to be planted by 2023. To raise the money Costa is completing a 1 for 6.33 entitlement offer at $3/sh, a ~12% discount to last netting $190m, with the remainder to come from undrawn debt facilities. The deal expected to be 10% EPS accretive with further upside seen in synergies and increased crop yields as the plants mature. Along with the acquisition, CGC said it expects EBITDA for CY21 to marginally ahead of CY20, around in line with market expectations.