Commodities Group (ASX:COZ) has today executed agreements to acquire the prawn farming business and business assets of Queensland aquaculture company Coral Sea Farms Australia and certain of its subsidiaries.
This acquisition is part of the consolidation strategy previously announced and will provide increased annual production capacity of 25%, allowing Seafarm to represent in excess of 30% of Australian production.
The current hatchery expansion will supply the new operations; and assists in supplying COZ's expanding export market.
Total cost of acquisition of $4.2 million is to be funded by a combination of cash and debt.
The consideration comprises $400,000 payable on completion and quarterly instalments over the next three years totalling $3.8 million.
This new farm is located just thirty minutes drive from COZ's existing operations at Cardwell, and within a logistically connected three farm hatchery and processing plant ‘hub’ allowing for consolidation of resources and economies of scale
COZ will be stocking the ponds later this year with Black Tiger Prawn larvae produced from its expanded hatchery.
The Coral Sea Farms business includes 32 hectares of ponds, a processing facility and related plant and equipment.
The acquisition is conditional on obtaining regulatory approval for the transfer or grant of various licences, authorisations and crown leases.
More information will be provided on the Seafarm business plans and Project Sea Dragon in coming months.
