September 12, 2018

BFB Pty Ltd, a diversified farming business based in New South Wales, Australia, is seeking bids from prospective corporate and superannuation bidders.

Headquartered in Tamora and founded in 1985, BFB currently owns 28 farms totaling a collective 48,753 hectares. In the 80s the business began as a trucking company, but soon expanded into cropping and grain storage. Today BFB is active in grain production, piggeries, and fuel and fertilizer distribution, and controls a 332,000-ton grain storage facility owned in partnership with Cargill to supplement on-farm storage for BFB properties, and to integrate grain trading, storing, and blending to the business, reports Grain Central. Additional grain storage totaling 75,300 tons is spread across various BFB sites.

PwC and CBRE will be calling for non-binding indicative offers from both domestic and international bidders at the beginning of October on behalf of BFB’s shareholders, including high net worth individuals, current management, and private equity firm Proterra Investment Partners.

Proterra began its relationship with BFB in 2010 when it acquired a stake in the portfolio as part of its agricultural investment strategy, and this sale, which is expected to fetch in the region of $300 million, is a result of the firm looking to exit its investment.

“We have a very close relationship with the BFB team, having built up a diverse business with deep operational synergies and quality management,” Brent Bechtle, founding partner of Proterra, told Grain Central. “Financially, the investment in BFB has provided our investors with stable earnings, while providing exposure to attractive agricultural markets.”

Indeed, it is access to key agricultural markets that is believed to be behind the sharp interest from overseas bidders for BFB – as the ongoing trade dispute between the U.S. and China has funds looking toward Australia, which at the same time is strengthening its trade relations with Asia.

“The whole BFB operation is extraordinarily attractive to the sort of interest Australia is drawing from North American and European pension funds and private wealth offices,” said Greg Quinn, food and agribusiness advisory partner with PricewaterhouseCoopers, told the North Queensland Register.

Big Moves

Australian ag has seen a string of high-profile, large scale deals recently. The largest happening in December 2016, with the acquisition of the S. Kidman cattle empire by Australian Outback Beef (AOB), a joint venture between mining magnate Gina Rinehart and China’s Shanghai CRED for A$386.5 million.

Over the course of two years, more than 600 interested parties contacted the sale manager, Ernst & Young, about a possible deal for the country’s largest land holding. Established in 1899 by Sidney Kidman, the company has grown to run 185,000 head of cattle on 101,000 square kilometers of land, or 1.3 percent of the land area of the country, stretching across Queensland, South Australia, Western Australia, and the Northern Territory. Equal in size to the country of South Korea, S. Kidman is the largest private agricultural landholder in Australia including 19 properties, 10 cattle stations, a bull breeding stud farm, and a feedlot.

Over the course of last year, AgCAP, the fund manager of Australia’s Sustainable Agricultural Fund (SAF), decided to divest its portfolio when after seven years as cornerstone investors, a collection of Australian superannuation funds including Australian Super, made the decision to exit. 

In September, TIAA Global Agriculture Properties acquired 10 of the 17 properties making up the SAF portfolio, totaling 16,000 hectares across New South Wales, and Victoria. Its asset manager, Westchester Agricultural Asset Management, also maneuvered to establish numerous deals with local farming businesses in regard to the operation of the properties.

This was quickly followed by an announcement in November that TRT Pastoral Co., headed by Victorian businessman Tim Roberts-Thompson, had agreed to acquire the remaining King Island Aggregation. All told, the SAF portfolio was successfully sold over the course of a 10-month process grossing more than A$180 million for investors.

Most recently, in September of this year, the second largest land deal after the S. Kidman sale was announced, when Macquarie’s Pastoral Paraway agreed to acquire the remaining farmland assets of Hassad Australia, a unit of the Qatari sovereign wealth fund – The Qatar Investment Authority – for nearly $300 million.

Established in 2009, Hassad Australia began buying farms in Australia in 2010 with the purchase of the Kaladbro station in Victoria for approximately $25 million. Over the years it has built up a portfolio with a value exceeding $100 million.

This divestment to Pastoral Paraway reportedly totals 104,000 hectares in Victoria, New South Wales, and Western Australia and includes:

Old Bundamar – a 22,562-hectare sheep, wool, and grain farm

Gindurra – an 8,516-hectare sheep, wool, and grain farm

Englefield Plains – a 7,4468-hectare  wool and grain farm

Barton Station – an 8,244-hectare sheep, wool, and grain farm

Amarinya, a 14,672 grain farm

Bindana Downs – an 8,483-hectare grain farm

Yupiri – an 8,340-hectare grain farm

And Urawilkie – a 25,932-hectare grain and livestock farm

The deal, which reportedly includes 47,500 head of cattle, has already secured approval from Australia’s Foreign Investment Review Board (FIRB).

-Lynda Kiernan