Moxey Farms on the market

07 Oct, 2014 11:59 PM
Moxey Farms is a unique opportunity for investors to buy into a well-established agribusiness

OVERSEAS investors are doing the sums on one of Australia's premier dairy farming enterprises, the giant Lachlan Valley-based Moxey Farms which has been placed on the market this week.

The Moxey family operation, headed by popular NSW industry matriarch Janet Moxey, milks about 3500 cows producing 50 million litres annually and generates up to $12 million in annual earnings before interest, tax, depreciation and amortisation (EBITDA).

It also boasts a 9300 megalitre Lachlan River irrigation licence, plus 1000Ml of on-farm storage.

The Gooloogong district agregation, east of Forbes, is tentatively valued by outside observers at about $100 million, although the family is understood to be keen to avoid selling up entirely, if possible.

The preference would be to retain a key stake in 2731-hectare operation and possibly expand or duplicate its housed herd and irrigated and dryland cropping activities.

The decision to invite outside investment follows a number of recent unsolicited buyer inquiries coinciding with a family review of the operation and its ownership succession options.

Mrs Moxey said the current owner-management team remained fully committed to the dairy industry, its bright prospects in Australia and the future development of the Moxey Farms business.

She said this may include expanding the business at the current site developed by the family over 17 years, or replicating the business model in other dairying districts.

"We believe a milk production platform of the size and quality being offered, together with its excellent management capability and scalable operating prospects, presents an attractive investment opportunity," Mrs Moxey said.

"During the past 17 years, through the tremendous contribution of its dedicated and experienced employees, Moxey Farms has successfully assembled an attractive and highly unique milk production platform."

Mrs Moxey, a past NSW Farmers dairy committee chairman and her late husband, Paul (who also earlier held the same industry job), moved Moxey Farms west from Richmond in the Hawkesbury Valley in 1997, building a state-of-the-art open barn-style facility at Gooloogong to initially accommodate about 2000 cows.

Their son Quentin, now general manager of Moxey Farms, said recent investment interest in the Australian dairy industry had provided an exciting background to the ongoing development of what was now considered the nation's leading single-site dairy farming operation.

"We have worked hard and assembled a high quality and highly profitable milk supply, fully integrated from paddock to processor.

"Our primary objective has always been to deliver a world-class milk production platform while recognising the requirements of consumers, customers and the community."

The National Australia Bank's (NAB) business succession planning division NAB Advisory is acting as its financial advisor to the Moxeys during the sale/investment offer process.

Although the offer was only launched by NAB yesterday, interest is already expected to be widespread, particularly given the flood of investor activity in the Australian dairy sector in the past 18 months.

Chinese buyers have been among notable dairy farmland investors of late, and the heated battle for processor Warrnambool Cheese and Butter ended with Canadian buyer Saputo taking almost 90 per cent stake for more than $500 million.

"Institutional and private investment demand for high-quality, scalable milk supply has continued to increase in the past two years," said NAB Advisory representative Benjamin Matigian.

"We anticipate the sale process will attract a significant amount of interest from both strategic and financial investors.

"The Moxey family is committed to maintaining the operations of the existing business and is seeking to engage with investors to introduce new capital.

"This will enable them to expand the existing footprint and to look for opportunities to replicate their proven business model."

The sale process - the largest of this type in recent times - was expected to be finalised in the first few months of 2015.

Mr Matigian said it was rare for a highly profitable pre-farmgate business of this size to come to market, but in light of Moxey Farms' consistently strong financial performance, NAB believed it was the right time to undertake this process "to crystallise value and bring on a new partner to assist with the next stage of growth for the business".

"The Moxey Farms business is a unique opportunity for investors to buy into a well-established agribusiness," he said.

The land portfolio included well-located, well-maintained and well-managed contiguous properties with 1000ha of flood and centre pivot irrigated paddocks.

Based on the Moxey operation's EBITDA of $10m to $12m a year and the recent comparable transactions of Australian Dairy Farms (ADF) in south western Victoria, which is becoming a publicly listed venture, the NSW operation is considered likely to have a market value of about $100m, assuming EBITDA multiples similar to ADF's 8.9.

ADF, which initially raised $8.5m from investors investors in China, Malaysia, New Zealand and Australia, owns two dairy farms near Warrnambool and wants to buy about 14 more by 2016.

Andrew Marshall

Andrew Marshall

is the national agribusiness writer for Fairfax Agricultural Media
Date: Newest first | Oldest first


Bushfire Blonde
8/10/2014 9:25:43 AM

No. no, no - don't sell out to a public Company - stay family-owned! You have done all of the hard work - don't sell out to an entity who will not care as much!
Bill Goats
8/10/2014 10:28:01 AM

Brushfire Blonde: The only way for the Moxey family to realize the fruits of their hard earned labour is to sell out either partially or fully. Life on the land is not a charity exercise for those of you who have a rose coloured view of rural enterprises. Agriculture will continue to die unless we can attract capital back into the bush.
Amused observer
8/10/2014 2:41:33 PM

A2 would be anxious as to who stumps up the funds given they are a current supplier to them. Why doesn't ADF buy them now they are listed.
Bushfire Blonde
9/10/2014 10:48:28 AM

Bill Goats, I have been directly invested in the land for decades and my clan for generations. What the Bush needs is PROFITS so as to re-invest in or expand our businesses - self made capital not so much foreign Capital. The history of foreign investment in Australia does not read very well. The main thing that comes out of it in the end is a few cleanskins for the little Aussie Battlers to augment their income.
Bushie Bill
9/10/2014 5:03:35 PM

Foreign capital has historically done more for Australian agriculture than wny other single identifiable factor, Bushie Blonde, and there is nothing on the horizon to change this fact.
11/10/2014 9:42:41 AM

Pity the other 2 brothers Dennis and Glen and their families who were involved in building the dairy with Paul from day one didn't get a mention


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