Freshmax, an Australian fresh produce business, has hired Melbourne-based advisor Kidder Williams to seek a strategic investor to accelerate its growth, said CEO Murray McCallum.

The company, backed by New Zealand private equity firm Maui Capital, is the only major fresh fruit marketer in Australasia that can supply all major fruit categories year-round. It will likely attract players in international markets looking for supplies from Australia and the Pacific Rim, mainly trade players potentially from Asia, Europe and Americas, McCallum told this news service.

A strategic investor should be able to help Freshmax accelerate growth via expansion into new markets and products, licensing new varieties, bolt-on acquisitions and extracting synergies, he noted.

Freshmax generates diversified and sustainable cash flow with annual revenue of more than AUD 300m (USD 200m) from a blue-chip customer base across Australasia and Asia, McCallum said, declining to comment on the business’ potential valuation.

Maui Capital has held Freshmax for more than 10 years after backing an MBO of the business in 2012 and acquiring a 60% stake at that time, as per Mergermarket records.

The CEO confirmed that Maui is still a major investor, without disclosing the PE investor’s current shareholding or intention.

As reported by Mergermarket previously, Maui Capital had attempted to sell Freshmax back in 2017 but the deal was hindered due to regulatory concerns over the foreign ownership of farmland. The PE investor launched another sale attempt in late 2021, but according to local media reports, the sale did not settle as the prospective buyer failed to get finance.

Freshmax has a score of 32 out of 100, according to Mergermarket‘s Likely to Exit (LTE) predictive algorithm. *

Business transformed

Established in New Zealand in 1997, Freshmax was primarily an Australasian domestic business but over the years has been transformed into an Australia-headquartered, capital-light fruit distribution platform with a strong Asian export business, after exiting its farming operations in Australia and New Zealand to reduce farming risk exposure, according to the CEO.

A source familiar with the situation told this news service that Freshmax now does not own farmland anymore and hence there will be no regulatory issues around farmland ownership if a potential deal is looked at by the Foreign Investment Review Board in Australia or the Overseas Investment Office in New Zealand.

Instead of owning farmlands itself, Freshmax has established long-term relationships with growers across the Pacific Rim that ensure year-round supply of fresh produce. It can provide counter-seasonal supply by focusing on southern hemisphere temperate zones and achieve premium pricing in northern hemisphere Asian markets, McCallum said.

With its IP portfolio including premium varieties such as Tangold™ mandarins and Blue Royal blueberries, Freshmax exports to overseas markets including Vietnam, Thailand, Indonesia, mainland China, Hong Kong, Taiwan, South Korea, Japan, India and the Middle East, the CEO said, adding that it still maintains a significant presence in the domestic market.

The company provides fumigation, ripening, packing, cold storage and quality assurance services from four processing facilities strategically located across Australia’s eastern seaboard and conducts trading operations from its sales and procurement offices in Australia, New Zealand, California, Chile and Peru, McCallum said.

*Mergermarket’s LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction.