Livestock Improvement Corporation Limited cancelled the acquisition of 50% stake in Afimilk Agricultural Cooperative Ltd. from Fortissimo Capital and Kibbutz Afikim - Agricultural Cooperative Society Ltd.
April 06, 2020
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Livestock Improvement Corporation Limited (NZSE:LIC) entered into a conditional agreement to acquire 50% stake in Afimilk Agricultural Cooperative Ltd. from Fortissimo Capital and Kibbutz Afikim - Agricultural Cooperative Society Ltd. for approximately NZD 110 million on February 18, 2020. The consideration is subject to typical purchase price adjustments relating to annual net cash/debt and working capital levels. As per terms of agreement, Livestock Improvement Corporation Limited will acquire 3636 shares representing 30.77% stake in Afimilk Agricultural Cooperative Ltd. from Fortissimo Capital and 2273 shares representing 19.23% stake in Afimilk Agricultural Cooperative Ltd. from Kibbutz Afikim - Agricultural Cooperative Society Ltd. Upon completion, both Livestock Improvement Corporation Limited and Kibbutz Afikim - Agricultural Cooperative Society Ltd. will hold 50% stake in Afimilk Agricultural Cooperative Ltd. Livestock Improvement Corporation Limited will finance the acquisition through new debt under its existing facilities with Westpac and Rabobank and balance will be paid out from cash reserve. Upon completion, Afimilk Agricultural Cooperative Ltd. will continue to operate as stand alone business. For the year ended December 31, 2019, Afimilk Agricultural Cooperative Ltd. reported revenue of NZD 89.1 million and EBITDA of NZD 22.1 million. The Board of Afimilk Agricultural will have an equal representation from Livestock Improvement Corporation and Kibbutz Afikim. Afimilk Agricultural head office and management team will continue to operate from Israel.
Transaction is subject to approval from shareholders of Livestock Improvement Corporation Limited and approval from members of Kibbutz Afikim - Agricultural Cooperative Society Ltd. Board of Livestock Improvement Corporation Limited recommended shareholders to vote in favor of transaction. Livestock Improvement Corporation Limited and Afimilk Agricultural Cooperative Ltd. will enter into shareholder agreement to govern their relationship and rights in relation to Afimilk. On March 23, 2020 LIC provided an update to shareholders setting out the impact of COVID-19 on the proposed investment. LIC subsequently updated the market again on April 2, 2020 advising the exchange rate remained volatile. Shareholder meeting of Livestock Improvement Corporation Limited will held on April 7, 2020 and Afimilk has not received the required shareholder support to proceed. The board and management team undertook a thorough and independently assessed due diligence process before recommending this investment to shareholders. Transaction is expected to be completed on June 1, 2020. Simpson & Grierson and Shibolet & Co. acted as legal advisor, Ernst & Young acted as financial advisor and Link Market Services Limited acted as registrar for Livestock Improvement Corporation. Doron Gurevitz and Nir Hoffer of Rothschild & Co SCA (ENXTPA:ROTH) acted as financial advisor to Fortissimo Capital and Kibbutz Afikim - Agricultural Cooperative Society Ltd.
Livestock Improvement Corporation Limited (NZSE:LIC) cancelled the acquisition of 50% stake in Afimilk Agricultural Cooperative Ltd. from Fortissimo Capital and Kibbutz Afikim - Agricultural Cooperative Society Ltd. on April 7, 2020.
Livestock Improvement Corporation Limited is a New Zealand-based agricultural technology (agri-tech) and herd improvement co-operative, which allows livestock farmers through the delivery of superior genetics and technology. The Company's segments include NZ market genetics, Herd testing, Farm software, and Diagnostics. The NZ market genetics segment provides bovine genetic breeding material and related services, predominately to dairy farmers. The Herd testing segment is engaged in herd testing and animal recording for dairy farmers. The Farm software segment provides data recording, tags, and farm management information services. The Diagnostics segment provides deoxyribonucleic acid (DNA) and animal health testing services. The Company's products and services include MINDA, premier sires, alpha, herd testing and animal health and DNA testing. The Company helps in taking decisions about its customers animals and farming operations with MINDA, its herd management system.
Livestock Improvement Corporation Limited cancelled the acquisition of 50% stake in Afimilk Agricultural Cooperative Ltd. from Fortissimo Capital and Kibbutz Afikim - Agricultural Cooperative Society Ltd.