The AU$6 million purchase, still subject to due diligence, regulatory approval and approval by the shareholders of Capilano Honey, consists of AU$5.5 million in Comvita shares and AU$500,000 cash. The Comvita shares (CVT on the New Zealand Stock Exchange) will be valued at a volume-weighted average of trading prices over the ten-day period preceding this announcement. The acquisition will take effect on June 1 2007, at which time Medihoney’s business will be merged with Comvita. Medihoney's sale will give Capilano Honey just over eight per cent shareholding in Comvita.Medihoney’s primary business, which started in 1999, is developing products for protecting and healing skin using biologically active honeys or products made from honey derivatives. The company has developed a range of products that is highly complementary to the Active Manuka Honey wound care and skin care range currently produced by Comvita. Capilano Honey is the market leader of honey in Australia, packing premium quality honey produced by Australian beekeepers for more than 50 years. Capilano’s standing as one of the world’s largest honey manufacturers and marketers, boasting an impressive global operation, further reinforces the importance of the new strategic alignment between the two trans-Tasman companies.Comvita’s CEO Brett Hewlett says the company is thrilled with the acquisition.He believes Medihoney’s international distribution network in Australia, the UK and Europe, together with its complementary product portfolio and intellectual property will strengthen Comvita’s position in the US$7 billion global wound care market.“Following our investment in Derma Sciences last year, the acquisition of Medihoney will again increase Comvita’s competence in the manufacture and marketing of advanced wound care products, cementing our stake in this high growth area. Together with its strong product development impetus and talented team, Medihoney is a welcome addition to the Comvita business,” he says.Roger Masters, Managing Director for Capilano, sees Medihoney as a complementary fit to Comvita’s healthcare business and as an opportunity to accelerate the commercialisation process in the development and marketing of anti-bacterial honey products. “Medihoney and Comvita are the two major participants in therapeutic honey in the international market and it makes a great deal of sense to combine our efforts. Capilano, by holding a direct investment in Comvita, will continue to share in the future potential of the medical honey business.”
This deal is Comvita’s second major acquisition in a month after it purchased its Hong Kong distribution partner, GreenLife Limited, in March.