Brunswick Corporation of the U.S.A. has approval to acquire Navman NZ Limited for $54,500,000 (for 70 percent). Navman was owned 78.7 percent by minority shareholders in Aotearoa, 18.4% by The Estate of George R Gardiner of Canada, and 2.9% by minority shareholders in the U.S.A..
The Applicant whose business activities include manufacturing and marketing marine products proposes to acquire Navman a New Zealand based electronic manufacturer of marine electronics and general navigation products. The proposed acquisition is seen as having the potential to realise synergies in areas such as global sourcing and supply chain management, product development and intellectual property.
Brunswick bought 70% of the company with an option to buy the remaining 30% by 2005. It paid $56.1 million, but took on debt of $1.5 million, presumably thus leaving the net consideration quoted by the OIC.
Founder Peter Maire, chief operating officer Steven Newman and other staff hold the remaining 30%. Venture capitalists Emerald Capital (owned by the Gardiner Estate noted by the OIC) and Capricorn (23.3%) sold out to Brunswick. For Emerald (which has a number of other New Zealand investments) this was a matter of regret: the New Zealand Herald quoted Emerald Capital investment manager and Navman chairman, Andrew Clement, as saying, “We agreed to sell into the Brunswick offer simply because they wanted to get total control. Sadly from my point of view, we are exiting.”
The Herald continued:
Navman will form the nucleus of Brunswick New Technologies, a unit developing marine electronics and software.
Navman’s statement said it would continue to expand its manufacturing locally, and it had signed a deal to double its Auckland factory space. The company employs 350 staff and plans to increase that number by 25 per cent next year.
The sale is a surprising move for Maire who was proud of the fact Navman was able to buy out its US shareholder at the end of 2001, bringing the company back to 100 per cent New Zealand ownership. Navman went on to buy the GPS division of Nasdaq-listed semiconductor maker Conexant.
“We’ve been able to do things in reverse: dump the manufacturer relationships, take over the brand and distribution strategies ourselves, buy our shares back from the US shareholder – and then buy a US company,” he said last year.
Navman has won several Government grants, the last of which was for nearly $1 million awarded in 2001. Back then Maire said he was motivated by “the thrill of exporting, not the money”.
Navman’s export sales since then have surged. In May it won a contract to supply electronic devices for collecting road tolls in Germany that is worth $40 million over the next two years.
But the sale to Brunswick highlights a familiar trend among New Zealand’s most successful IT companies - they get plucked up by overseas investors.
Just last month 40 per cent of 3D sports animation company Virtual Spectator went to Bermuda-based Investors Guaranty Fund for about $3 million.
In December email security company Marshal Software sold to US investors for $45 million. In 1998 Binary Research’s cutting-edge Ghost software was sold to Symantec for about $50 million. (New Zealand Herald, “Navman sells out to NYSE-listed giant Brunswick for $56m”, by Peter Griffin, 25/6/2003.)
Navman has offices in Auckland and Christchurch. In July the company announced it was doubling its Christchurch staff – mainly engineers – to nearly 50. Its sales are “close to $150 million” (Press, “GPS boom prompts Navman to double Christchurch staff”, by Paul Gorman, 29/7/03, p.C3).
According to its web site, www.navman.com, the company was founded in the late 1980s as Talon Technology. The company “became the design and manufacturing partner for Los Angeles based Standard Communications Corp. Since then Navman has produced more than 40 different products under the Horizon brand name. Although all design work was in New Zealand, manufacturing was initially done in Singapore. The company’s sky rocketing growth soon made a New Zealand manufacturing facility of prime importance, today all products are produced in our world class New Zealand facility.” The name was changed to Navman in 2001.
Brunswick has annual sales of US$3.7 billion, with divisions for marine engines, boats, fitness, and bowling and billiards.
[Decision number 200310076.]
CDL Land New Zealand Limited, according to the OIC ultimately owned 22.1213% by the Hong Leong Group of Singapore, 20.095% in other Singapore shareholdings, and 58% in Aotearoa, has approval to acquire 3.7 hectares at 187 McLeod Road, Te Atatu South, Auckland for $1,998,000 from Marsh Estate Partnership of Aotearoa. The land adjoins the foreshore and land provided as “a reserve, a public park, for recreation purposes, or a private open space”.
The Applicant’s core business is the acquisition of land for development and subdivision. The Applicant is seeking to further strengthen and grow its land bank and development portfolio through the acquisition of land parcels and broadening its activities beyond pure land development. It is proposed that the subject property will be subdivided into 43 residential sections to be made available for sale to the open market. It is envisaged that the sub-division will be undertaken in approximately two years time following the finalisation of the development and planning requirements.
Although the OIC’s shareholding figures make it look majority owned in Aotearoa, CDL Land is a 100% subsidiary of CDL Investments New Zealand Ltd, itself a 60.12% subsidiary of CDL Hotels New Zealand Ltd. CDL Hotels New Zealand Ltd owns the largest hotel chain in Aotearoa and its 70.22% shareholder is Millennium and Copthorne Plc, a 52.4% subsidiary of CDL Hotels International Ltd, which is the Singapore-based Hong Leong Group’s principal hotel investment company.
The company regularly buys land for subdivision, the last such purchase being in December 2002.
[Decision number 200310065.]
Neil Construction Limited, owned by the Tiong Family of Malaysia, has approval to acquire 7.5 hectares at 64 Fairview Road, Albany, Auckland for $5,800,000 from GW Gibbs and SE Dodson of Aotearoa.
The Applicant proposes to acquire the subject property to add it to the company’s portfolio of residential subdivision land in the Auckland region. The purchase of the land will replace and expand existing land stocks which are progressively being developed and sold. The subject property adjoins a four hectare block previously acquired by the Applicant. The subdivision development proposed for the land will provide further sections which will assist in meeting the ever increasing demand for residential lots in the greater Auckland region. It is expected that the development of the property will result in 80 residential sites. The development will be undertaken in two stages with a likely completion date in 2005.
The property adjoins land “provided as a reserve, a public park, for recreation purposes, or a private open space”. The company’s last such purchase was in July 2002. See our commentary for that month for further details.
[Decision number 200310071.]
Universal Homes Limited, owned 76.1% by shareholders in Singapore and 23.9% by China Merchant Holdings International Limited of China, has approval to acquire 6.2 hectares at Medallion Drive and Fernhill Way, Albany Auckland for $6,075,000 from Constructa Corporate One Hundred and Thirty Nine Limited of Aotearoa.
The Applicant is a predominant player in the Auckland housing market with a principal activity in the development of blocks of land in the Auckland region for the construction and sale of residential house and section packages. The Applicant is continually searching for land for residential development to meet the demands of the population.
The subject property is a vacant land block which the Applicant proposes to develop as a medium/high density residential subdivision of approximately 190 lots. The development is likely to commence in October 2003.
Universal’s last purchase was in September 2002. See our commentary for that month for further details. [Decision number 200310077.]
· Tomlinson Forest Inc, owned by the Tomlinson family of the U.S.A., has approval to acquire 389 hectares at Motukauri, Hokianga Harbour, Northland for $610,537 from William Frank Cobb of the U.S.A.. “The Applicant, who is a forestry investor in the United States of America and New Zealand, acquired a 10 percent interest in the subject property in 1997. The Applicant now proposes to acquire the remaining 90 percent interest in the subject property. The property is presently subject to a lease to Ataidar Forests Limited, a wholly owned subsidiary of Carter Holt Harvey Limited, which provided for the lessee to establish a forest on the land. The lease expires no later than 31 March 2008. The Applicant intends to replant the land in forestry as the current rotation is harvested and the land is released from the lease.” We have no record of these earlier transactions. The land adjoins conservation land and the foreshore. [Decision number 200310075.]
· Three further groups of investors from Taiwan have approval to acquire land from the New Zealand Forestry Group Limited, which is owned 76% by Wesley Garratt of Aotearoa and 24% by J Hong of Taiwan:
· The Frank and Grace Family Trust of Taiwan has approval to acquire 32.6 hectares at Marua Road, Hikurangi, Whangarei, Northland for $602,000. “The Applicant proposes to acquire the subject property which was planted in forestry during 1985. The trees have been pruned and are expected to produce high quality clearwood. The vendor will continue to provide management of the forest.” [Decision number 200310063.]
· The Hsieh Family Trust of Taiwan has approval to acquire 22.5 hectares at 152 Elgood Road, Ngaruawahia, Waikato for $143,115; and the Hui-Der Family Trust of Taiwan has approval to acquire 45.1 hectares at 152 Elgood Road, Ngaruawahia, Waikato for $323,840. In both cases, “the Applicant is a member of the Elgood Forest Owners Association which has entered into an arrangement with New Zealand Forestry Group, the Vendor, to develop approximately 148.6 hectares of land at Ngaruawahia. The majority of this area (80 percent) has already been planted in forestry with the remaining land to be planted in 2003”. [Decisions 200310068 and 200310069.]
These sales are like many in this and other regions organised by New Zealand Forestry Group, the last such sales being in April 2003, also at Elgood Road in Ngaruawahia and involving the “Elgood Forest Owners Association”. The investors provide the money, while New Zealand Forestry Group manages the development of the forestry operation.
· Juken Nissho Limited, owned 85% by Juken Sangyo Company Limited of Japan and 15% by Nissho Iwai Corporation of Japan, has approval to acquire 857 hectares at Wharekiri Road, Whangara, Gisborne for $2,250,000 from TM and JA Newman of Aotearoa. “The Applicant proposes to convert the subject property, which is currently utilised for agricultural purposes, into a commercial forestry operation. This will ultimately provide the Applicant with a further secure supply of wood which will be processed at its existing Gisborne processing mill.” [Decision number 200310072.]
· John Samuel Brodie and Nobuko Brodie of Japan have approval to acquire 570 hectares at 1169 Ruakaka Road, Gisborne for $866,250 from Pinefarm Investments Limited of Aotearoa. “The subject property comprises part of Awapiko Station which the vendor acquired in December 2001 for a two-stage forestry development. Following completion of the first stage, the vendor has decided not to carry out the second stage which was to be undertaken on the land the subject of this application. The Applicant proposes to undertake an afforestation programme which is planned to produce primarily premium grade clearwood timber. Approximately 240 hectares of the subject property are plantable. The land which is described as not being a desirable pastoral property due to its steepness is currently grazed intermittently as it does not contain sufficient feed to sustain a permanent grazing rotation. The establishment of the forestry operation will result in a more productive use of the property and is likely to stabilise many of the lower slopes that are steep and erosion prone.” [Decision number 200310070.]
· Montana Group (NZ) Limited, owned by Allied Domecq PLC of the U.K., has approval to acquire two blocks of land.
· 215 hectares at Matapiro Road, Crownthorpe, Hawkes Bay for $4,275,000 from AW and BW Keighley and JP Matthews of Aotearoa. “The subject property has been utilised by the vendor for forestry, grazing and with a small area set aside for a free range piggery. The Applicant advises that this property has a total of 170 plantable hectares which will be planted in Sauvignon Blanc, Pinot Noir and Pinot Gris.” [Decision number 200310067.]
· 39.7 hectares at State Highway 1, Fifteen Valley, Riverlands, Marlborough for $1,333,125 from Blenheim Developments Limited of Aotearoa. “The subject property has been leased by the vendor to a local farmer for grazing. The Applicant advises that this property has a total of 28 plantable hectares which will be planted in Pinot Noir.” [Decision number 200310066.]
In both cases it is stated that “The Applicant is the largest participant in the New Zealand domestic wine business and future growth opportunities are limited. The Applicant has identified the acquisition of further vineyards or land for development for the growing of grapes as a way of being able to compete more effectively in the national and international wine markets. The proposed purchase will provide the Applicant with an increased grape supply which will enable it to continue to develop its export wine markets and enhance the reputation of New Zealand wine overseas.”
· Dean Michael Stevinson of U.S.A. has approval to acquire 17.9 hectares at Luggate-Cromwell Road, Cromwell, Otago for $506,250 from Lake Dunstan Holdings Limited of Aotearoa. “The Applicant proposes to acquire the subject property which is currently fallow land for a vineyard development. The property contains 12 plantable hectares which will be planted predominantly in Pinot Noir. The vineyard development will be managed by Southern Lakes Vineyard Consultancy. The grape production is likely to be sold under contract to be harvested and processed by Peregrine Wines, whose wines enjoy a national and international reputation in the premium wine market.” The land “includes/adjoins a lake the bed of which exceeds eight hectares in area”. [Decision number 200310074.]
· The BEC Spa Resort (NZ) Limited, owned by Leon Baumgarten of the U.S.A., has approval to acquire 5.5 hectares at Cobb Cottage Road, Blenheim, Marlborough for $185,000 from DT Kepes of Aotearoa. “The Applicant has previously acquired a property located at Rarangi near Blenheim for the purposes of developing ‘Business English’ courses as well as leisure activities such as swimming, golf, wine tourism, and fishing. The proposed development will essentially provide a learning vacation for mainly Asian and European business people wishing to improve their business English skills. The Applicant’s proposal to acquire the subject property is to further develop the guest and tourist accommodation business by supplementing the leisure options available for guests. The Applicant’s shareholder and his wife are also intending to reside permanently in New Zealand and propose to develop a residence on the subject property.” [Decision number 200310064.]
· Five Star Beef Limited, owned 50% by Itoham Foods Inc of Japan and 50% by Anzco Foods Ltd has approval to acquire 23.4 hectares at Seaside Road, Wakanui, Mid Canterbury for $266,222 from Anzco Foods Limited, which is owned 48.28% by Itoham Foods Inc, 25.17% by Nippon Suisan Kaisha Limited (“Nissui”) of Japan, 0.45% by other minority shareholders in Japan, 11.38% by Janz Investments Ltd of Aotearoa, 9.77% by Graeme Harrison of Aotearoa, 2.73% by Barbara Harrison of Aotearoa, and 2.22% by other minority shareholders in Aotearoa. “The proposed transaction is an intra-group transaction between ANZCO Foods Limited (Anzco) and Five Star Beef Limited (FSB) which are closely related through common shareholdings. Anzco acquired the subject property in 1990. It is adjacent to FSB’s feedlot and is utilised for such under arrangement between Anzco and FSB. It is proposed to transfer the subject property from Anzco to FSB thus formalising the existing land use arrangement.” [Decision number 200310073.]
Reflecting the approvals given in April, the gross and net value of investment approved in the year to May 2003 is considerably higher than for the previous May year. The net value (i.e. disregarding sales from one overseas investor to another) is still considerably lower than the gross: by far the greatest part of the value of the approvals is for sale from one overseas investor to another.
Investment involving land
Gross sales of land approved by the OIC during the year to May have increased again in area from last month, though still well behind last year, most of them through net sales (i.e. from a New Zealand owner to an overseas one). Refusals (above) have fallen in number, area and value, from last year and are still a tiny proportion of the total.
Campaign Against Foreign Control of Aotearoa,
P. O. Box 2258