ArborGen has signed a memorandum of understanding to acquire the Eco Empreendimentos nursery in Piauí, Brazil, for approximately US$2.5 million (NZ$4.1m).
The deal will be funded through seller financing and cash already in Brazil.
Settlement is expected on Nov 1, pending the fulfilment of conditions.
The acquisition will enhance ArborGen's presence in Brazil's northeastern region, which is emerging as a key area for forestry.
The Eco Empreendimentos nursery has an annual production capacity of 15 million eucalyptus seedlings, with the potential to expand to 18m.
This will increase ArborGen's internal production capacity in Brazil to 94m seedlings a year.
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