Capilano Honey Ltd (ASX: CZZ) delivered a sweet market update after the market closed on Thursday which has the market buzzing today. The shares rose as much as 5.5% to a new all-time high of $15.30, extending the company's record-breaking run.
The company is an Australian honey packer and brand manager with names such as Allowrie, Barnes Naturals and, of course, Capilano Honey, already under its wing. Yesterday's update however shows that the company has now expanded that dominant portfolio even further, acquiring one of Australia's largest active Manuka honey producers, KirksBees Honey Pty Ltd.
Capilano will pay a total of $6 million for the company – $750,000 of which will be for the property and land while $5.25 million is being spent on the business which produced $2 million worth of bee products last financial year.
Capilano suggests that the acquisition will deliver increased product security whilst also delivering a material benefit to the group's earnings. Indeed, Manuka honey sells for a premium due to its proven antibacterial characteristics while there is also the potential to grow production over time.
Although Capilano's shares have already rallied hard over the last six months or so, there is potential for even greater gains for investors committed to holding on for the long term – especially as the company strengthens its dominance over the Australian honey market.
