Local ag interests line up to pitch for $550m Lawson Grains

Aussie investors lead inquiry rush for $550m Lawson Grains

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Interest from locally-based investors and agricultural rich list identities has outweighed early overseas inquiry for Macquarie Bank's Lawson Grains.

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A rush of early interest from locally-based investment funds and agricultural rich list identities has lined up to outweigh overseas inquiry for Macquarie Bank's big farming business Lawson Grains.

Macquarie Infrastructure and Real Assets has not flagged its price expectations for the 103,000 hectares of grain growing country and related assets in Western Australia and NSW, but the agency handling the sale is anticipating about $550 million, or more.

Officially the portfolio of six supersized WA properties and four in NSW began to be marketed this week by the LAWD agency group, but inquiries have been coming thick and fast since news of the sale broke last week.

Newly recruited LAWD director and former CBRE agribusiness boss Danny Thomas said international inquiry had certainly emerged, but local interest was "really significant at the moment".

Although Macquarie was keen to sell the 10-year-old business as one single company, early inquiry suggested there was also strong interest from individuals and potential farming syndicates for selected properties or groups of properties within the portfolio.

Pooled interests

Aside from investment funds, Mr Thomas said he would not be surprised to see a combination of big scale family investors pooling their agricultural know-how and funds to prepare a joint bid for part or all of the operation.

High net worth names with some existing interests in agriculture, notably beef, were among those looking at the diversification options in the current bullish agricultural market at present, and Lawson Grains offered an usually good business opportunity.

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"I've pretty much had the phone strapped to my ear taking calls since news of the sale went on Farmonline last Thursday," Mr Thomas said.

"It's not unusual that Macquarie, which spent almost a decade building this portfolio from scratch into one of the best agricultural businesses in the country, would like to see it sold as one package.

"Anybody who wants a cornerstone investment in the grains industry would certainly be getting a strategically diverse spread of well run, highly productive assets, including the Lawson Grains' management in Albury and, importantly, a lot of experience in the managers on the properties themselves.

"But I think the Kidman and Company sale five years ago showed us it's not beyond the realms of possibility for other large scale producers to team up with a common goal of acquiring at least a portion of these big name assets.

"With a common agenda and the backing of a common banker a few individual farming families can do big things together."

Mr Thomas it was quite possible a syndicated bid involving a few neighbours, or up to eight of 10 ag sector players may bid for the entire business.

Significant operator

Lawson Grains harvested more than 250,000 tonnes of cereal, pulse and oilseed crops last year.

The company is considered one of Australia's leading corporate grain farmers with almost 137,000 tonnes of on-farm or managed storage facilities.

Its assets are strategically diversified across multiple climate zones in North West and Central West NSW and the southern Riverina, and WA aggregations based around the Esperance and Geraldton port zones.

Mr Thomas noted the company's geographic hedge had worked really well for Lawson management, which had proven to be "very good at growing very big crops, often with limited in-crop rain", particularly in WA last year.

Macquarie Bank began accumulating Lawson's dryland cropping properties in 2012, eventually acquiring more than 70 full-sized properties and partial holdings to establish its current footprint.

The MIRA fund backing Lawson Grains has now opted to wind up its investment because it is approaching its intended maturity date and the level of investment interest in farming assets promises to deliver a solid return for investors.

Mr Thomas said no property inspections would be taking place until a shortlist of potential investors was drawn up after April 22.

He felt the bidding process and final sale decision could take another few months, or maybe some time longer,depending what sort of Foreign Investment Review Board consent may be required.

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