Property

WA’s SAWA aggregation sells to investment group for close to $100m

Jon Condon, 20/04/2016

WESTERN Australia’s extensive SAWA grazing property aggregation has been sold, for a figure understood to be close to the asking price of $100 million.

The deal may be Western Australia’s biggest-ever pastoral property transaction, Beef Central’s research suggests.

The acquisition of the Kimberley assets signals the emergence of a new player in the industry.  Adelaide-based advisory firm, Agrify, has led the establishment of the investment group, which has been seeded in the first instance by international equity from Archstone Investments, controlled by wealthy Hong Kong based Australian citizens, the Hui family. Archstone is a Beijing-based investment group with interests in China and Hong Kong. Its portfolio spans the food, agriculture, medical and technology industries.

Breeder muster on Moola Bulla

Breeder muster on Moola Bulla

A spokesman for Agrify said the group intended to explore further agricultural acquisitions following the completion of the SAWA purchase.

While contracts have been exchanged, the deal is subject to Foreign Investment Review Board and WA state government regulatory approvals.

The offering of the SAWA aggregation to the market, at a price expectation of $100 million, was first reported on Beef Central on February 1.

Regarded as the largest parcel of northern grazing land to publicly go on the market since the S.Kidman empire was listed in April last year, SAWA comprises a little over one million hectares of breeding and backgrounding country stretching from Broome to Halls Creek.

The SAWA portfolio owned by Nico Botha and family comprises four extensive Kimberley cattle properties including:

  • Moola Bulla, near Halls Creek – 395,000ha
  • Mt Amhurst, near Halls Creek – 260,000ha
  • Beefwood Park, near Fitzroy Crossing – 206,000ha, and
  • Shamrock, near Broome – 178,000ha.

The location of the properties creates a natural geographic supply chain into the region’s two main live export departure points, Broome and Wyndham.

‘Worldwide’ interest

Sole marketing agent Sue Brosnan, proprietor of Tanami Rural Property in Katherine, said interest in the holdings had been ‘worldwide’, including Europe, Asia, the Middle East, North America and South America.

After an initial expressions of interest process launched in February, a small number of interested parties, both Australian and international, participated in non-binding expressions of interest in the SAWA assets. Property inspections and due diligence followed. A number of binding offers, both Australian and offshore in origin, were received by the April 4 deadline.

Ms Brosnan said key features in the SAWA offering were the number of stock included in the deal; the potential for further production growth offered by the aggregation; and the quality of the predominantly Red Brahman x Droughtmaster commercial herd.

“It’s now obvious that foreign investors see Australia as one of the key targets for agricultural investment worldwide, and the Federal Government’s White Paper on Northern Australia issued last year highlights the region’s unique opportunities in pastoral investment,” Ms Brosnan said.

“The Vendor, SAWA, was a genuine seller. The sale process was an extensive and intensive, managed, and confidential process which has produced a competitive result for the vendor and an opportunity for a genuine buyer to purchase an outstanding pastoral aggregation.”

“These particular buyers see the value in the aggregation’s land and cattle, natural geographic supply chain and the quality of the underlying land assets with future potential.”

Vendors, the Botha family have been associated with Moola Bulla since 1999, and have gradually built their Kimberley land holdings to the current aggregation.

They said they were pleased to be able to hand the aggregation on to purchasers who would appreciate the quality of the investment and the opportunity to continue to develop the potential of the properties.

 

 

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Comments

  1. Peter Vincent, 22/04/2016

    Net Tangible Asset accounts for very little when it comes to “Joe Blow” making an “arm’s length” investment in a public company. The idea of investing capital is to show a profit on the capital invested. The underlying net value of a company is relevant to a balance sheet but apart from influencing the cost of borrowings to shore up annual cash flow, it’s of little relevance to P&L. The NTA becomes relevant when a company delivers trading results which fail to meet shareholder expectations. That’s why public pastoral companies seek passive investment from large multinationals with long-term vision.

  2. J Louis, 21/04/2016

    AACo (“AAC”) Net Tangible Assets is $1.64 – cant understand why this is still trading at discount to NTA

  3. Graham johns, 21/04/2016

    There is a lot of concern about the amount of large pastoral aggregations which have been sold to foreign owners over the past twelve months and I totally understand this, as these vendors could likely achieve better prices and give family businesses the opportunity if they were willing to sell these properties individually. On the other hand at least these properties aren’t being bought up for conservation, meaning that they will never again be productive as is common place in south australia

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