Under the terms of the deal, Camellia has bought an 80% stake in Bardsley England for £15.7m and will also loan £9.3m to Bardsley, largely to cover existing debts.
Bardsley's farming operation covers 850 hectares (ha) in Kent and includes 27 orchards growing apples, pears, cherries, plums and grapes as well as a large grading, packing and storage facility. The business grows nearly 18,000 tonnes (t) of fruit a year, supplying 90 million apples a year, including Royal Gala, Braeburn, Cox and Bramley varieties and at peak season it employs 550 staff.
It makes a range of juices and planted its first 8ha vineyard in 2019 with Chardonnay vines. The grapes that are produced are made into English Sparkling Wine.
It is an innovator in the use of agritech, employing technology such as micro-climate sensors to monitor for adverse weather and wet leaf sensors to give early indication of pests and disease. It also uses a combination of trailer-mounted machine vision devices and remote satellite technology to improve yield predictions and crop management.
Benefits of the acquisition, according to the two businesses
- Camellia is a global agricultural group specialising in bearer plants (plants that produce regular crops, such as fruit trees). Bardsley would enable it to diversify its product and geographical portfolio, it said.
- As part of Camellia, Bardsley will have access to a wider customer base and lower cost of finance.
- Bardsley’s packhouse operations offers synergies with Camellia’s avocado, macadamia and blueberry businesses and works with many of the same customers.
- Bardsley is profitable.
- The acquisition is expected to be earnings enhancing in 2022.
- Bardsley being in the UK will improve Camellia’s effective tax rate.
In addition to strengthening Bardsley’s balance sheet, Camellia's investment would support growth and ensure the business could invest more in its packing operations, which process more than 35,000t of fruit a year, and extending its orchards, the companies confirmed.
Bardsley, which is a fifth generation family business founded in 1892, operates through a number of UK companies. For the year ended 31 March 2021, it reported revenue of £22.4m and an unaudited pre-tax loss of £1.7m. Gross assets of the business at that date were £26.2m and net assets were £8.3m.
Camellia operates agriculture, engineering, foodservice and investments divisions. It's agriculture division claimed 2020 turnover of £247.2m and trading profit of £18.3m. Its core international crops are macadamia, tea and avocado, while speciality crops include blueberries, maize, soya, barley, wine and livestock. It claims to be the world's second largest producer of macadamia nuts. It operates 57 tea factories across four countries.
The effect of the acquisition on Camellia’s 2021 pre-tax profit is expected to be broadly neutral before deal costs of £1.2m, but is expected to significantly boost profits in 2022.
“We have been looking for some time to increase our focus on agriculture where we have deep skills, and to increase our operations in the UK," said Tom Franks, chief executive at Camellia. "Bardsley helps with both. It is located close to our HQ in Kent, which is the premier region for apple growing in the country. We look forward to partnering with the Bardsley family in the future.”