New Zealand web-based financial services company Heartland Group is to pay $143 million to buy livestock sale finance outfit StockCo.
The sale, set to be finalised by June, includes a 30 per cent stake owned by the Elders farm services business.
Elders will, however, retain strong StockCo ties by continuing to distribute the company's finance products to its clients for the next five years.
The sale deal also involves a further $11m in follow-up payments based on the rural sector lender's future performance.
StockCo, which established in 2005, currently boasts about $340m in assets with 60 per cent of its business in the cattle sector and 35pc sheep.
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In NZ Heartland Bank offers livestock finance similar to StockCo's and other rural loan options, including online finance to the sheep and cattle sectors.
Heartland is also a specialist player in the Australian loan market, providing reverse mortgages which give older home owners options to withdraw equity from their property.
Its loan business is currently valued at more than $1 billion in Australia, where it is reportedly the largest player in this mortgage segment.
Elders acquired its StockCo stake in 2016 and now expects to book a non-underlying profit on the sale of up to $20m.
Managing director Mark Allison said Elders clients should notice no difference with the change of ownership.
He said the StockCo sale had delivered significant benefits to Elders, but new ownership also provided the chance for the lender's business to be developed as part of a dedicated financial services organisation.
"We are excited about the potential of these new arrangements for our livestock clients."
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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).
