Costa Group makes fruitful acquisition

Australia's premier fruit and vegetable grower, Costa Group (ASX:CGC), announced its acquisition, in conjunction with Macquarie Agricultural Funds Management, of Queensland-based Avocado Ridge orchard and packing operations. Under the agreement, Macquarie will purchase the farms and enter into a 20-year lease with CGC to operate them. The avocado category is the long-awaited fifth pillar to CGC’s existing market-leading, vertically integrated, core positions in berries, mushrooms, citrus and glasshouse tomatoes. The acquisition adds to CGC’s existing South Australian avocado-production capabilities and is expected to be earnings-per-share accretive in FY18. Earlier in the December quarter, CGC provided an update at its AGM upgrading its earnings growth forecast to "at least 15%" which was ahead of market expectations and we remain comfortable with our holding. (VIEW LINK)