November 2, 2020

By Lynda Kiernan, Global AgInvesting Media

Held by UK private equity firm, Terra Firma, rumors about the sale of the CPC portfolio have circulated since November of 2014, but the divestment process did not begin in earnest until 2018 with the sale of Nockatunga Station, a bullock fattening operation located in southwest Queensland.

Terra Firma acquired CPC in 2009 from Kerry Packer for approximately $425 million, having expanded the holding with additional cattle stations over the years.

In January 2019 CPC sold three more cattle stations: the Auvergne and Newry Stations in the Northern Territory, and the Argyle Downs Station in Western Australia – with a combined total of 740,000 hectares (1.8 million acres) of land, and 52,000 head of cattle – to Vietnamese investment group Clean Agriculture and International Tourism (CAIT) in a deal valued at $135 million.

In March of last year CPC parted with its Mimong Station for a  reported A$20 million (US$14.3 million) to Baldy Bay Pty Ltd, which is owned by pastoralist Sterling Buntine. And by May, Baldy Bay returned to acquire CPC’s Comley Station aggregation in central Queensland for a reported A$50 million (US$35.27 million).

All told, CPC sold nine properties, or little more than 40 percent of its 5.5 million hectares between 2018 and 2019 to buyers including Cleveland Agriculture, Sterling Buntine, and Vietnam’s Clean Agriculture and International Tourism, fetching A$310 million (US$211.5 million).

These sales were rounded out in October of last year when Guy Hands, founder and chairman of Terra Firma, the British private equity investor and parent of Australian cattle giant CPC, decided to lead a consortium consisting of CPC management and unnamed institutional investors for the buyout of the remainder of the portfolio that still stands as the largest private cattle company in Australia, with 3.2 million hectares of land in the Northern Territory and Queensland, and a carrying capacity of about 300,000 head of cattle, including two feedlots in Indonesia. 

Today, the purchase of CPC has been finalized (for at least $500 million) and announced in a statement that said that the Hands family has “a vision for continued investment in Australian agriculture through CPC’s land, cattle, and people.”

Guy Hands reinforced, in a statement announcing the finalization of the deal, his belief in the potential of Australia’s cattle sector and CPC’s role saying, “CPC is a high-quality, well-run business with a strong position in a large and growing industry and close proximity to major beef-consuming markets.”

“Even in Australia, where beef-industry standards are among the highest in the world, CPC stands apart for its commitment to protecting the environment, animal welfare, investing in people, good relations with Indonesia, and innovation. I have tremendous confidence in the Australian agricultural sector and my family and I are very excited about the future of CPC and proud to be partnering with its management team.”

Troy Setter, executive director at CPC, assured that the course of business for CPC will remain steady, including its intentions to explore opportunities other than cattle – such as its Newcastle Waters Station being approved as a site for the development of the world’s largest solar array. 

“We don’t have anything that size or size on the table right now, but we’re doing a land conversion from cattle to arable land in Queensland, and we started in the Northern Territory this year, but we’ve put it on hold. Because of coronavirus, ” said Setter.

And although the entire process has taken longer than originally anticipated, Setter expressed his satisfaction with the final result.

“This is a great outcome for CPC and the Australian and Indonesian agriculture sectors,” said Setter. “Long-term, patient capital will enable us to continue to invest in our people, our land and our cattle – and this will benefit our business as well as the important agriculture industry in Australia. I look forward to continuing to work with the Hands family, our team and our local communities to build on the great business we have today well into the future.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.