|
Thursday 30th July 2009 |
Text too small? |
Comvita Ltd., which makes health products from honey and pollen, will avoid paying the ‘earnout’ component of the purchase price of an olive leaf extract business after it failed to meet a target for revenue growth.
The company had agreed to pay A$26 million in cash and stock for the unit of Olive Products Australia, of which A$6 million was dependent of revenue growth of 65% over the two years from date of purchase in 2007, it said in a statement.
Chief executive Brett Hewlett said while sales growth missed the target, the olive leaf business “been an excellent acquisition for Comvita and has exceeded our original forecast return on investment.”
“While sales revenue increased by a still outstanding 35%, the earnout target was not achieved and the earnout is not payable,” he said.
As a result, about 1.1 million shares held in escrow will be transferred back to Comvita and cancelled as has a bank guarantee for the A$3 million cash component.
Shares of Comvita were unchanged at 87 cents and have declined 57% in the past year.
Businesswire.co.nz
No comments yet
Comvita may not increase earnings in 2014 as higher honey prices bite, Craigs says
Comvita turned to a loss in first half, remains confident of increasing annual profit
Nasdaq-listed Derma Sciences takes 7.3 percent stake in Comvita in discounted placement
Comvita FY profit falls 10 percent , beating guidance, on honey shortage, rising costs
Comvita flags 15 percent fall in FY profit as expensive honey, supply shortages prompt downgrade
Comvita buys Aussie groves to expand olive extract output
Comvita first-half earnings fall 7.4% amid short supply
Comvita buys Whanganui-based Kiwi Honey for undisclosed sum
Comvita hits 5-yr high on early results from diabetes trial
Comvita to seek deeper pool for directors' fees at AGM
