Elders is in the throes of buying almost a third of one of the financial service providers lending funds to its livestock clients.
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StockCo helps sheep and cattle buyers fund purchases at saleyards or direct from vendors, lending the funds against the value of the livestock.
Invariably loans are to enable buyers to finish or background store quality beef cattle and lambs before resale into prime markets or direct to feedlots and meat processors.
A big portion of its funding is for feedlot and backgrounder finance, lamb trading and beef and dairy herd purchases.
The 11-year-old StockCo also provides tailored on-demand structured finance packages valued from $1 million for larger farming businesses with irregular cashflow.
Elders, which is set to buy 30 per cent of the lending business, has been offering loans via StockCo to livestock clients for the past two years as part of a suite of banking, insurance and financial planning products sold through its financial services division.
StockCo is the largest specialist livestock financier in Australia and New Zealand and is rapidly expanding its market position.
In the past two years it has funded over $250 million in cattle purchases in Australia.
Managing director, Mark Allison, said StockCo products were well received by the farm services businesses’ customers as a convenient and simple way to fund livestock acquisitions.
“An equity popsition will strengthen our relationship with StockCo and align the growth ambitions of both companies,” he said.
“Further developing Elders’ financial services is in line with our eight point plan.”
Elders’ investment in StockCo is subject to final contract negotiations and the fulfilment of sale conditions which are due to be completed next month.
The remaining 70pc of the company is held by directors in the StockCo group.
StockCo’s board of directors is chaired by NZ lawyer and agriculture sector advisor, Andrew Morrison, who runs his own boutique law firm, Morrison Daly, in Wellington.
Chief executive officer, Richard Brimblecombe, is a former banker whose agribusiness roles include a directorship on the Grains Research and Development Corporation.
