By Gerelyn Terzo, Global AgInvesting Media
Australia’s Duxton Farms, which oversees a portfolio of agricultural assets spanning 165,067 hectares (407,889 acres) across New South Wales, Victoria and the Northern Territory, continues to reorient its agribusiness portfolio. This time, Duxton Farms plans a targeted realignment of its Australian private companies specializing in walnuts, dried fruits, orchards and bees. Through a series of mergers, Duxton Farms is looking to broaden its commodity holdings and geographic footprint while significantly boosting production of specialized crops and products.
The businesses targeted for these deals include Duxton Dried Fruits, Duxton Walnuts, Duxton Bees and Duxton Orchards. According to the announcement, Duxton Farms already holds a minority interest in these merger companies worth a combined A$16.5 million (US$10.8 million). Through these consolidation efforts, these assets will be more fully integrated into Duxton Farms’ portfolio.
Earlier this year, Duxton Farms announced the sale of the majority of its Kentucky property to Alkira Farms in a deal valued at AU$38 million (US$24.9 million). The property spans 6,020 hectares (14,875 acres) of land along with 48 megaliters of stock and domestic water entitlements. Duxton Farms held onto a smaller portion of the original holding: 423 hectares (1,045 acres) of land and 1,463 megaliters of Jemalong Irrigation General Security surface water, keeping these valuable assets within its portfolio.
Through its latest streamlining efforts, Duxton Farms’ agricultural portfolio will swell substantially. Its landholdings are projected to expand to over 180,000 hectares (444,790 acres), complemented by a considerable 32,000 megaliters of water entitlements. Duxton Farms anticipates that its asset value will nearly double through the integration of its properties. The mergers are slated for finalization in the coming months, increasing the scale and diversification of Duxton’s ag portfolio.
Australia’s walnut sector is charting a clear path of expansion, with its market having been valued at $26.5 million in 2023 and poised to reach $38.3 million by 2032. Growers in Australia are harnessing innovative farming techniques, resulting in improved yields and quality. The nation’s climate create an attractive environment for walnut cultivation, supporting the continued expansion of orchards across various regions. While much of the production is reserved for domestic demand, Australia also eyes opportunities as a seasonal exporter to China, New Zealand and the U.S. markets.
Of the latest acquisitions, Duxton Farms Independent Director Mark Harvey commented, “Over the past three years Duxton Farms has been pursuing a strategy to broaden and expand the company’s exposure to the Australian agricultural sector…The walnut, dried fruit, apiary and apples businesses being brought into Duxton Farms are expected to significantly derisk the company’s geographic and commodity exposure while expanding and diversifying its earnings profile.”
For its financing needs, Duxton is tapping the capital markets via a conditional underwritten placement, securing A$4million (US$2.63 million) through the issuance of new fully paid ordinary shares. The broader merger transaction, valued at A$102.9 million (US$67.5 million) for the four business segments, will predominantly involve Duxton Farms acquiring all outstanding shares through a combination of schemes of arrangement and direct share purchase agreements.
Duxton Farms is also moving to simplify its investment management agreement with its asset management arm Duxton Capital. The revised terms will see the management fee adjusted to a straightforward 1.25 percent of net asset value, replacing a previous performance fee model. This change aims to provide greater transparency and establish more investor-friendly fee arrangements.
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