November 14, 2018

Agrinova, a farmer consortium in the Riverina region of Australia, is asking the Australian government for answers after U.S. private equity group Proterra agreed to sell diversified farming business BFB Pty Ltd. to Public Sector Pension Investments (PSP), Canada’s largest superannuation fund for $200 million.

Agrinova, who had reportedly bid $270 for the business, has written to the Australian Prime Minister questioning how the sale meets the country’s Foreign Investment Review Board’s (FIRB’s) requirement that an agricultural sale to a foreign party must be in the best interest of the nation.

In September it was announced that BFB Pty Ltd, a diversified farming business based in New South Wales, Australia, was seeking bids from prospective corporate and superannuation bidders.

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 was expected to fetch in the region of $300 million, is a result of the firm looking to exit its investment.

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.

On October 16 Agrinova was notified by its advisor Pricewaterhouse Coopers (PwC), (which also advised Proterra on the deal),  that the group was able to participate in the due diligence phase of the BFB sale. However, 10 days later the group was told that Proterra had opted to move forward with an offer from Canada’s PSP.

It is not clear at this time whether PSP’s bid included additional considerations that would raise the value of the deal.

“A number of criteria are being considered in assessing potential bidders including price,” said a spokesman for PwC, reports the North Queensland Register. “The bidding process has been transparent and all bidders have had access to the same information.”

-Lynda Kiernan