Cattle on Paraway’s Pier Pier Station

MACQUARIE Group appears to be close to selling its 4.4 million hectare Paraway Pastoral Co grazing and farming portfolio to US fund manager Ranchland Capital Partners.

An unattributed item in The Australian newspaper this morning suggests that Consolidated Pastoral Co is now out of the reckoning for a Paraway takeover, with Montana-based Ranchland entering into an exclusive due diligence process for a deal that may be worth close to $3 billion.

Beef Central understands Ranchland may have paid what is termed a ‘break fee’, a charge paid to compensate a party for a broken contract or early deal termination, commonly applied in business transactions ahead of an in-principle agreement.

Sale prices of between $2.7b and $3b have been suggested.

Based on the company’s website information, it appears that a Paraway purchase would be Ranchland’s first ag venture outside of the US.

The company’s main business focus is on real assets fund management, ranch management, ranch acquisitions and institutional capital markets. The Australian suggests Ranchland is backed in part by US Government funding.

“We provide institutional and family office clients access to large, professionally managed properties in the US, creating scalable investment access for our clients through private funds and co-investment opportunities,” the site says.

A company subsidiary, Ranchland Management Group, manages 1.4 million hectares of grazing land across 12 western US states, using what it describes as “a data-driven, vertically-integrated operating approach.”

“We seek to deliver attractive risk-adjusted returns for our clients while improving the ecosystems in which we operate,” it says

In a review of agricultural investment opportunities published in February, Ranchland said grasslands and rangelands had seen limited institutional investment to this point, despite their enormous scale – being roughly equal in global land area to forestry and cropping land combined.

“By introducing innovative land management practices and systems that are better aligned with the climate than traditionally accepted practices, RCP can drive transformative value, both in terms of ecological health and financial gains.”

“As demand for ranchland rises and supply shrinks, we combine land ownership with operational experience in an effort to unlock sustainable risk-adjusted returns while potentially improving the ecological performance of the property,” Ranchland’s website says.

“Our investment approach is designed to deliver returns from two sources: long-term land price appreciation and diversified income-generating enterprises.”

Should a sale deal be struck over Paraway, it leaves Macquarie’s primary agricultural asset in Australia as the enormous Cubbie irrigated cotton project near Dirrinbandi. The company may also own land leased in the south for tree crop production.

A successful sale to Ranchland would add a significant amount of offshore-owned agricultural land to the Federal Government’s Foreign Land Ownership register.

A sale would draw to a close Macquarie’s 18-year investment in Paraway, which grew in scope and capacity over the period of ownership from 2007, starting off purchasing land in the Riverina area of New South Wales before expanding north and south.

Macquarie announced plans to seek a buyer in July last year. From the outset the company flagged its intention to sell the assets as a single unit, rather than break the portfolio up – a position that narrowed the field of potential buyers considerably.

“If the company is sold in its entirety, offshore pension funds which have been active in Australian agriculture or other corporate investors are the most likely candidates for the sale – with the price tag expected to be in the billions,” Beef Central wrote at the time.

Paraway is one of Australia’s biggest agricultural companies, with grazing, cropping and feedlot operations spanning from the Gulf country in Queensland to Central Victoria. The portfolio includes 28 properties running more than 220,000 cattle and 250,000 sheep. Some of the core stations include the well-known Rocklands and Gregory Downs in Queensland’s Gulf country, Davenport Downs and Tanbar in the Channel country and the Pooginook sheep stud in New South Wales.

Its properties in Central and Southern NSW and Victoria are used for sheep breeding and growing as well as premium cattle operations.

In addition to extensive livestock operations, Paraway has more than 40,000ha of dryland cropping and 3400ha of irrigated cropping land, producing a variety of cereal crops for sale and use as fodder, legumes, rice and cotton. A substantial amount of grain and hay is retained for use in the sheep and beef enterprises.

In February, Macquarie announced that the Paraway assets were definitely on the market. A source in the property marketing field told Beef Central there was already a lot of interest in the entire portfolio – including from international investors.

“There are three categories of buyers who are already showing interest in the company. There are natural capital buyers who are looking for big swags of land for environmental benefits or to accrue carbon credits,” one source told Beef Central.

“Secondly the traditional corporate buyers from North America, Asia and the Middle East, and thirdly there are private equity groups who are considering Paraway to integrate with processing assets to build a large-scale integrated red meat supply chain,” he said.

In 2015, Paraway broke records when it sold Walhallow in the Northern Territory to Australian billionaire Brett Blundy for $100m. Walhallow was once the headquarters of Peter Sherwin’s Sherwin Pastoral Co and later sold to the Hughes and Scott families’ Georgina Pastoral Co.

It was part of a three-property deal purchased by Paraway in 2009 worth $169 million, which also included Davenport Downs (1.5m ha) in Queensland’s south west channel country and Amraynald (219,000ha) in the Qld Gulf, and a total of 88,000 mixed cattle.

In 2023 Macquarie put three of its New South Wales Paraway properties, Burmah, Borambil and Pier Pier on the market – with Borambil and Burmah selling for $43.57m and $50m respectively. The 24,000ha Pier Pier was retained in the Paraway portfolio.