Paine & Partners’ Costa Group raises A$550m in IPO

Paine & Partners, the New York-based food and agribusiness private equity firm, has  completed the initial public offering for Costa Group, a Fund III portfolio company.

Costa listed on the Australian Securities Exchange (ASX) on 24 July in the second largest IPO in Australia so far this year, according to a statement. About 245 million ordinary shares of Costa were sold at an IPO price of A$2.25 ($1.64; €1.50) a share. The total amount raised was around A$550 million. The ASX’s largest IPO this year was accounting software company MYOB’s $833 million.

Kevin Schwartz, president and a founding partner of Paine & Partners, will continue to serve on Costa’s board following the IPO. The PE firm currently holds about 12 percent of the listed company making it Costa’s largest stockholder, the statement says.

Paine & Partners made its initial investment in Costa, Australia’s largest grower, packer and marketer of fresh fruit and vegetables, in July 2011, buying a 50 percent stake in the company. The company concentrated on the four sectors where it had a competitive advantage: berries, mushrooms, snacking tomatoes and citrus, and increased the share of produce grown under protection.

The firm then led Costa’s acquisition of Adelaide Mushrooms in February 2013, taking its share of the domestic mushroom market to approximately 40 percent. It also invested in berry-growing operations in Morocco and China.

“The substantial growth and transformation of Costa during our investment demonstrates our hands-on approach to deploying our industry expertise, global connections and capital to help our portfolio companies accomplish their strategic objectives,” Schwartz said in a statement.

Paine & Partners closed its oversubscribed Fund IV on $893 million in January and made its first investment with the fund in early July into Spearhead International, an UK-based agricultural producer that has farming operations in the UK, Poland, Romania, Slovakia and Czech Republic.