Costa group float raises $551 million

The Costa Group, owners of the Guyra tomato farm, have raised $551 million dollars after listing on the Australian Stock Exchange last week.

A UK equity firm, Mondrian, emerged as a major investor, taking about $60 million stake, third behind the owners Paine and Partners and Frank Costa. After opening at $2.25 the price has fallen and was trading at $2.09 on Wednesday.

Costa is using the $550 million to make major investments in greenhouses across Australia, including the expansion at Guyra, where planting is due to commence in the next three weeks.

The company plans to grow another 10 hectares of sweet snacking tomatoes at the new development situated just north of Guyra.

The Costa group is Australia’ biggest horticultural company and is also involved in growing blueberries, raspberries, mushrooms, citrus and bananas.

Frank Costa’s family began the company as a small fruit and vegetable company. In 2011 they sold a 50% stake in the business to US private equity Paine & Partners.

Costa currently exports 12 per cent of its produce, and plans for 25 to 30 per cent of the earnings to come from overseas.