The Costa Group Holdings Ltd (ASX: CGC) share price is pushing higher today following yesterday's announcement from the company.
At the time of writing, Costa shares are up 0.61% to $3.32. This means that over the last week, the company's share price has risen by almost 3%.
Let take a closer look at what the horticulture company released to the ASX.
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What did Costa announce?
Investors are buying up Costa shares after the company provided investors with a positive update.
According to its release, Costa revealed it has completed the acquisition of 2PH Farms as of 19 July 2021.
Based in Queensland, 2PH Farms is the largest citrus grower in northern Australia. The business has farming operations in central Queensland, covering 1,400 hectares of citrus trees and 240 hectares of table grapes.
The $219 million upfront cash transaction was primarily funded by Costa's fully underwritten pro-rata accelerated renounceable entitlement offer.
The successful completion of the institutional component saw around $114 million raised in late June. In addition, the retail component – expected to be finalised at the end of this month – will be used to pay the debt drawings.
The combined entitlement offer is $190 million, with Costa previously tapping into its existing debt facilities to fund the deal.
The company will also pay an additional $31 million in July 2023 for the purchase of the 'Conaghans' property. 2PH Farms is currently planting a new citrus crop at the site.
Costa group CEO Sean Hallahan commented:
We are pleased to have completed the acquisition of 2PH Farms and welcome the transitioning employees to Costa.
The acquisition increases Costa's total planted citrus hectares by 60% to 4,513 hectares, citrus farming locations to 11 and major citrus growing regions to three.
Costa has been working closely with 2PH to ensure a successful transition in ownership and the continued harvesting of the CY21 citrus crop, while focusing on greater export supply to key Asian markets and increased citrus category revenue contribution.
Costa share price summary
While Costa shares have plummeted around 17% in 2021, the same cannot be said for the past year. In the last 12 months, the company's share price has risen by 14% despite releasing its disappointing Annual General Meeting (AGM) update.
Based on today's price, Costa is valued at around $1.4 billion and has around 439 million shares on issue.
