Delta Agribusiness is understood to have been in talks with brokers about a prospective initial public offering in the medium term, as the company goes from strength to strength amid booming demand for agriculture services.
The business describes itself as a leading force in rural inputs and advice in regional Australia, offering similar services to the larger Elders.
Its five brands include Delta Ag, North West Ag Services, Agrivision Consultants, Aglink David Gray’s, Cox Rural and ARH Agquire Rural Holdings.
A float could be a logical step for Delta Agribusiness when the equity capital markets recover, given the well-credentialed board and management.
The company is chaired by former Nufarm managing director Doug Rathbone and run by co-founder and managing director Gerard Hines and executive director Chris Duff.
Australia-based Odyssey Private Equity owns a 24 per cent stake, while the remainder is mostly owned by management, staff and board members.
Former AACo chairman Nick Burton Taylor was also a former chairman and has owned shares over time.
Agriculture businesses are in favour right now given buoyant conditions in the market, with protein, grain and fertiliser shortages offshore partly caused by the Russia-Ukraine conflict.
One option is that Delta sells to Elders, but it may face opposition from the competition regulator. The other market player, Nutrien, is unable to acquire the business because it has a market share of about 50 per cent after buying Rural Co.
Other factors weighing in Delta’s favour are that it has a strong balance sheet and growing turnover, increasing at about 40 per cent a year to around $750m.
Delta Agribusiness sells Four Seasons agrichem products and offers white label services that are in strong demand right now.
Another option is that Delta Agriculture considers a sale of a stake to a strategic investor.
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