November 21, 2014

London-based private equity giant Terra Firma is moving toward the sale of a stake in Australia’s largest privately owned beef producer, Consolidated Pastoral Company (CPC). It is rumored that Terra Firma has been approached by various Chinese players as Australian cattle exports are expected to boom after the signing of a recent free trade agreement between the two countries which is expected to gain $11 billion for the red meat industry over nine years. Terra Firma could sell up to a 40% stake in CPC which has a book value of $700 million and holds a 50% interest in a joint venture that owns and operates two cattle feedlots in Indonesia, and a partnership in China. This deal marks the continued consolidation of the Australian cattle industry which has seen in excess of $100 million worth of cattle station purchases over the past 18 months. CPC was bought in 2009 from James Packer for $450 million. It owns and operates 19 cattle stations, running 360,000 head of cattle across 5.6 million hectares in Australia.

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