After tapping into the private equity market in May to fund its growth aspirations, NSW-based frural services dynamo, Delta Agribusiness, has wasted little time expanding its footprint by about 50 per cent with a push south.
Delta has taken over North West Ag Services' 14-branch business in Victoria's Wimmera and Mallee.
The deal, which had been on the cards since last year, saw North West principal, Steve Cameron, also take up a significant shareholding in Delta and become the sixth director on the company's board.
Sydney-based Odyssey Private Equity recently added extra balance sheet capacity to Delta's business and expansion plans, after buying a 20 per cent stake in the rural services, marketing and merchandise supplies firm.
Odyssey manages about $275 million raised from financial groups and superannuation funds which it invests in mid-sized companies with a robust growth record.
Our overall focus has always been to look at how we can grow with good people who have similar core beliefs to ours and good structures to work with
- Gerard Hines, Delta Agribusiness
Delta Agribusiness is still looking at other interstate options, although probably not before the end of the year, according to managing director, Gerard Hines.
"This is a large acquisition and we are focusing on getting it right, although we have other things in play," he said.
While the company was making a deliberate push to diversify its geographic base, the move into Victoria was not necessarily driven by the state's relatively good seasonal conditions at a time when drought has caned much of Delta's NSW heartland.
"It's certainly tough in northern and Central West NSW - as tough as I've seen it in 30 years in this part of the world," Mr Hines said.
"However, I've known Steve for quite a while and we've been considering this opportunity for more than a year.
"Our overall focus has always been to look at how we can grow with good people who have similar core beliefs to ours and good structures to work with."
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North West Ag Services and its related agronomy business, Agrivision Consultants, will continue to be run by Mr Cameron.
His parents founded the company as Quambatook Rural Supplies 32 years ago and its branch network now stretches from Ouyen and Swan Hill in the north to St Arnaud and Marnoo in the Wimmera.
Delta Ag's own network started with two retail sites at Young and Harden just 13 years ago and now totals 44 branches following the North West and Agrivision merger, and a staff of 300.
It has more than 9000 clients in Queensland, NSW and Victoria and post-acquisition sales revenue approaching $300m a year.
Chairman, Doug Rathbone, said there were many positive synergies expected to result from the North West Ag Services acquisition and Mr Cameron's boardroom input, in addition to the increased business scale and geographic diversity.
Mr Cameron said while his business had strongly protected its independence, he believed joining Delta was "the best option to move forward".
The company's inclusive shareholder model also created significant opportunities for his own Victorian team.
Crown analysis
Earlier this year Delta also bought a half stake in North West NSW-based soil and plant pathology laboratory, Crown Analytical Service, founded a decade ago by Moree agronomist, Rob Long.
Crown, named after its initial research on crown rot in cereals, tests for paddock disease risk levels and grain varietal tolerance characteristics for farmers, researchers and agronomists in the summer rainfall cropping zone from Emerald in Queensland to Dubbo in NSW.
"We think having Rob on our Delta team and our strategic investment in Crown are great opportunities to take these services to farmers and the industry much further and provide the capitalisation Crown needs to expand," Mr Hines said.
The investment complement's Delta's co-founded agtech innovator, Goanna Ag, which specialises in agricultural sensing and internet of things (IoT) monitoring technology.
Goanna is developing new generation smart farming practices, which simplify farm resource management and water use efficiency.
We're concentrating on what we can control and positioning ourselves for when things do turn around so we can take full advantage
- Gerard Hines
Mr Hines said the technical strides being achieved by Delta's various investments were "keeping the focus positive", despite the seasonal challenges facing farmers and farm sector service providers.
"We know it's going to rain at some point, and when it does it will probably rain a lot," he said.
"We're concentrating on what we can control and positioning ourselves for when things do turn around so we can take full advantage."
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
