Comvita, the New Zealand-based Manuka honey supplier that was the subject of a failed takeover bid last year, has announced a business review and the departure of chief executive Scott Coulter.
The review comes on the back of an agreement reached in April with its China joint venture partners Comvita Food (China) Ltd. and Comvita China Limited, whereby Comvita will take full control of the JV having previously owned a 51% stake. The Wellington-listed firm said at the time it would fund the transaction with new shares and a cash payment of NZD3.2m (US$2.1m).
“This completes the ‘final piece of the jigsaw’ with respect to our China strategy, which we have been working on for a number of years,” Coulter said then.
Today (6 June), Comvita said in a statement the China distribution business is now a 100%-owned subsidiary of the company, “is trading profitably and is a key component of a wider strategic review being undertaken by the board over the last twelve months”.
A special purpose sub-committee has been set up, led by the company’s former CEO Brett Hewlett, with the view to “undertaking a review of the under-performing assets of the business, as well as structural, balance sheet, leadership and organisation considerations”.
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The statement continued: “Specifically, the sub-committee will examine the possibility of a more formal separation between the ‘brand’ and ‘supply’ components of the business. External advisers will be retained as required to ensure minimal impact on the day-to-day operations of Comvita.”
Comvita revealed in the spring of last year that it was the subject of an interested and unnamed party conducting “due diligence” in the firm, but later confirmed any potential deal had been called off due to differences over price.
And now Comvita is advising Coulter will step down as CEO at the end of September after 16 years at the company having completed the China JV deal. He will remain in a “governance capacity” for the China operations.
A search for a new CEO is underway, Comvita said, and hopes to complete the process before the end of the year.
The statement read: “Throughout his 16 year tenure with Comvita, including four years as CEO, Scott has played an integral role in transitioning the company from a small exporting company with sales of NZD20m, to the vertically integrated, high value-add international business that we are today with global annual sales now at over NZD200m.”
Meanwhile, Comvita said today it hopes to reveal more details of its business review at the annual general meeting slated for 17 October, and will “seek any necessary approvals from shareholders to proceed with any recommended structural changes”.