September 11, 2019

By Lynda Kiernan

Green Plains Inc., AGR Partners TGAM Agribusiness Fund Holdings-B, and StepStone Atlantic Fund, along with their respective affiliates, announced the formation of a joint venture to own and operate Green Plains Cattle Company.  

In a joint statement, the parties state that under the terms of the deal, the aforementioned investment funds have acquired a 50 percent stake in Green Plains for approximately $77 million.

Launched in 2014 with the acquisition of Supreme Cattle Feeders in Kismet, Kansas, Green Plains has grown to be the fourth largest cattle feeder in the U.S. In 2017 the company acquired a 30,000 head operation in Hereford, Texas; a 50,000 head operation in Eckley, Colorado; and a 105,000 head operation in Leoti Kansas. The following year, the company added another 100,000 head operation with locations in Tulia, Texas, and Sublette, Kansas. Today, the company has a total capacity of 355,000 head of cattle spread across these six feedlots and three states.

Its parent company, Green Plains Inc., which now owns a 50 percent stake in Green Plains Cattle Company in partnership with AGR and StepStone, is a diversified commodity-processing business active in grain handling and storage, commodity marketing, logistics services, and is one of the leading corn processors in the world.

The $247 million TGAM Agribusiness Fund Holdings-B was formed in 2017 through a partnership between TIAA Global Asset Management (TGAM) and AGR Partners, and followed a year after TGAM and AGR Partners launched their first $600 million agribusiness fund in the spring of 2016 after organizational shifts at both firms. 

With offices in Davis, California, and Chicago, Illinois, AGR Partner focuses on non-controlling equity interests or subordinate debt positions to foster late-stage growth, strategic acquisitions, full buyouts, or ownership transitions for strong agribusiness and food company teams.

AGR’s partner in this deal, StepStone, is a global private markets firm with $52 billion in assets under management, and $260 billion of total capital allocations. The firm prudently integrates fund, secondaries, and co-investments across private equity, private debt, infrastructure, real estate, and real assets, including agriculture and timber.

“We are excited about completing this transaction and the quality of investment partners who have aligned with us for the continued growth of Green Plains Cattle Company,” said Todd Becker, president and chief executive officer of Green Plains. “This further validates the quality of the business we have built over the last several years, and allows us to form new relationships with long term investors.”

Todd Becker, president and CEO of Green Plains, noted that this deal will also be positive for the cattle company’s bottom line.

“The completion of this transaction also has a positive impact on our balance sheet by adding $77 million of cash and deconsolidating working capital debt associated with our cattle business which totaled approximately $335 million at the end of the second quarter,” said Becker.

“We have significantly reduced our debt over the past year and between this transaction and paying off our $500 million term loan, we are now back to a net debt positive position against our convertible bonds.”

Green Plains Cattle Co. is also now repositioned for growth in a global industry that is expected to see a CAGR of 3.9 percent between 2016 and 2020 to reach a value of $2.72 billion, according to MarketsandMarkets. 

“Green Plains Cattle Company has developed a solid reputation in the cattle feeding industry and our management team and employees are excited to be part of this new venture,” said Joel Jarnagin, president and chief executive officer of Green Plains Cattle Company. “We are very optimistic for what the future holds and look forward to a successful long-term relationship as we continue to grow the business.”

Daniel Masters, managing director, AGR Partners added, “AGR is pleased to partner with Green Plains and to work with Joel and the dynamic team he has assembled at Green Plains Cattle Company. We look forward to being a supportive partner in the continued growth of Green Plains Cattle Company.”

– Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.