By Lynda Kiernan
Guy Hands, founder and chairman of Terra Firma, the British private equity investor, and parent of Australian cattle giant Consolidated Pastoral Company (CPC), has decided to lead a consortium consisting of CPC management and unnamed institutional investors for the A$600 million (US$409 million) buyout of CPC.
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.
Despite intentions to sell the CPC portfolio in its entirety, since then approximately 40 percent of its farmland has been divested.
In January of this year, 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, 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 has sold eight properties, or little more than 40 percent of its 5.5 million hectares, to buyers including Cleveland Agriculture, Sterling Buntine, and Vietnam’s Clean Agriculture and International Tourism, fetching A$310 million (US$211.5 million).
Through this new buyout proposal, Guy Hands, CPC’s management, and their related investor partners will take over the remainder of the CPC portfolio (still ranking as the largest private cattle company in the country) totaling 3.2 million hectares (7.91 million acres) of land and 300,000 head of cattle, along with a 90 percent stake in a joint venture holding two feedlots located in Indonesia.
“CPC is a high quality, well run business with a strong position in a large and growing industry. Its operations are close to major beef-consuming markets,” said Hands in a CPC statement announcing the move. “I am personally very excited about the future of CPC and delighted to be partnering with the management team of CPC.”
Troy Setter, chief executive of CPC, views the development as one that is not only good for the company, but for the country as well.
“This is a great outcome for CPC,” said Setter. “Long-term, patient capital will enable us to continue to invest in our people, our land and our cattle which will not only benefit CPC but the broader agricultural industry in Australia.”
“In terms of operations on the stations, it would be business as usual,” he said. “We continue to work out ways to maximize beef production, get the most out of our properties, and care for our people and livestock.”
“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 daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.