GrainCorp is firming up its footprint in the stockfeed sector with the grain handler, marketer and processor paying $35 million to buy liquid supplements and livestock nutrition advisory business, XF Australia.
The Queensland-based XFA owns the Performance Feeds business, the makers of the Anipro stockfeed supplement range, among other liquid and loose lick nutrition products for beef and sheep feedlots, dairy cattle and paddock livestock.
XFA also runs the feedlot performance and nutritional consulting business, Nutrition Service Associates, providing advice and trace mineral premix production services.
The 30-year-old business is currently owned by company management and a majority US shareholder, US Australia Investments,
XFA management teams will remain in place under GrainCorp's ownership.
The business was originally established by American nutrition and supplement company, XF Enterprises, in partnership with former Queensland-based livestock selling agency group, Primac, before it became part of Elders.
XFA has three manufacturing sites at Kingsthorpe, near Toowoomba, and Brandon, in the Burdekin Valley in Queensland, and Kyneton in Victoria.
Performance Feeds' boasts being Australia's largest and most recognised liquid supplements supplier to the feedlot and gazing sectors.
Its products have been developed to help boost production and performance and optimise all-round health in sheep, beef and dairy cattle.
XFA's combined businesses generated $7.6m in earnings before interest, tax, depreciation and amortisation in 2022-23.
The takeover move by GrainCorp will fit well with its own Brisbane-based GrainCorp Feeds division, which operates on both sides of the Tasman Sea, producing vegetable oil and molasses-based feed supplements for beef and dairy cattle, sheep and other domestic livestock.
GrainCorp's stockfeed range includes the Molafos, Rumifeed and Energro brands, plus crude molasses and dry feeds.
It also employs a nutrition advisory support team.
Strategic growth plan
Managing director, Robert Spurway, said the company was delighted to welcome XFA into the fold and looked forward to expanding its animal nutrition offering.
"Performance Feeds and NSA are highly respected in the feed supplement sector and are run by an experienced team, who will enhance GrainCorp's animal nutrition capabilities," he said.
"The transaction is in line with our strategy of disciplined growth in targeted business areas to expand our offering to customers."
The sale is, however, subject to certain conditions, including GrainCorp entering into new commercial and lease agreements with some of XFA's contractual and commercial counterparties, and approval by the the Australian Competition and Consumer Commission.
Unless any unexpected hurdles emerge, the cash transaction is currently scheduled to be completed by the end of January.
XFA founder and major shareholder, Dr R. Hollis Klett, said the decision to sell such a well respected business was not made lightly.
"Careful consideration was taken to choose a buyer that aligned with our culture and could support our company through its next phase of growth," he said.
"We wanted to align ourselves with a company that provided a high level of service and quality products to its customers."
Diverse investing
In July GrainCorp continued a recent trend of investing in emerging farm technology businesses, becoming a key contributor to a $9m investment round into ZoomAgri, which has used artificial intelligence to achieve grain varietal recognition and quality testing.
It has also backed seaweed-based methane reduction stockfeed product, Future Feed, and soil carbon monitoring outfit, Hone.
The ZoomAgri investment was alongside grain industry venture capital provider, GrainInnovate, Artesian and earlier investors SP Ventures.
GrainCorp is eastern Australia's largest grain storage and handling business and the leading edible oil processor and oilseed crusher in Australia and New Zealand.
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).
