May 17, 2021

By Lynda Kiernan, Global AgInvesting Media

Australian Food & Fibre (AFF) has acquired 100 percent of Auscott, the biggest integrated cotton business in Australia including farmland, ginning infrastructure, warehouses, and marketing operations for an undisclosed amount from U.S.-based owner J.G. Boswell Company.

Although the financial particulars were not disclosed, Auscott was placed on the market in July 2020, with expectations by J.G. Boswell of fetching $500 million, or more for the business.

At the time, chairman of J.G. Boswell Company James W. Boswell said that it was “the right time for the J.G. Company to focus our efforts on the opportunities in our core operations in California.”

Founded in 1963 by J.G. Boswell Company, Auscott is one of the pioneering cotton producers in the country. Its operations are centered on central New South Wales and include 22,000 hectares of developed and irrigated farmland, water rights that exceed 143,000 megaliters, five ginning facilities that produce more than 1 million bales of cotton per year, two warehouses, and a laboratory.

The merging of these operations with AFF’s existing business in the northern part of the state will be highly complementary, according to Canada’s Public Sector Pension Investment Board (PSP Investments) – one of Canada’s largest pension funds with net assets totaling about $170 billion, and one of the largest landholders in Australia with assets valued at more than A$4 billion. AAF is a joint venture between the Robinson family and PSP formed in 2017.

“Auscott’s six decades of operations in the sector reflects Australia’s leading position on the global stage in high-quality cotton and the importance of a long horizon for value creation.  The combined group will continue to be very supportive of the communities in which it currently operates,” said Joe Robinson, managing director AAF.

“Joining forces with PSP Investments in 2017 created the opportunity for AFF to achieve its potential,”Robinson continued. “Our acquisition of Auscott is a great example of the power of combining local industry expertise and knowledge with long-term capital managed by a team dedicated to agriculture.”

Marc Drouin, senior managing director and global head of natural resources for PSP, described the deal as a significant milestone, pointing out that it is the latest in a string of strategic initiatives launched and delivered on since the inception of its joint venture with AAF.

“We are grateful for and proud of our partnership with the Robinson family in AFF, which is emblematic of PSP’s strategy of teaming up with high-performing and like-minded local operating partners in the agriculture and timber sectors to help them achieve their long-term strategic objectives,” said Drouin. “We share with our partners a commitment to operational excellence, emphasis on employee health and safety, the sustainable management of the natural resources under our stewardship and being positive contributors to the communities in which we invest.”

PSP has a massive presence in Australian agriculture, having executed deals across horticulture, beef, cotton, cropping, sheep, dairy and nuts worth in the billions to give it a stake in Hewitt Cattle Australia, Daybreak Cropping, Erregulla Plains, four dairy farms in South Australia formerly owned by Beston Global, diversified farming business BFB Pty Ltd, Australian agribusiness Webster, water rights, and vast almond orchards, among other concerns. 

This is not the first deal to happen between AAF and Auscott, having already acquired Midkin – Auscott’s 17,300-hectare property in Gwydir Valley and its Ashley gin for as much as A$300 million in 2019. 

Now, as all regulatory approvals have been met, the combined post-farmgate operations of both companies will be led by Ashley Power, the current Sydney-based CEO of Auscott.

– 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, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan@globalaginvesting.com.