DeltaAg sale expected to attract plenty of bids

DeltaAg describes itself as a leading force in rural inputs and advice in regional Australia, offering similar services to the larger Elders. Picture: iStock

Information memorandum documents for the sale of $600m rural imports business DeltaAg hit the desks of prospective buyers this week and there is expected to be a reasonable list of interested acquirers.

Earlier, there was speculation that GrainCorp could take a look, while anticipated to at least look under the bonnet will be rival Elders, and private equity funds will no doubt be in the mix.

Investment bank UBS is working on the sale.

While a float had originally been on the agenda, the understanding is that the owners are now looking to sell up to about 80 per cent or all of the business, triggered by a need for 24 per cent private equity shareholder Odyssey to sell as it winds up its fund.

DeltaAg describes itself as a leading force in rural inputs and advice in regional Australia, offering similar services to the larger Elders.

Its brands include Delta Ag, North West Ag Services, Agrivision Consultants, Aglink David Gray’s, Cox Rural and ARH Agquire Rural Holdings.

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.

It is mostly owned by management, staff and board members and generates about $60m of annual earnings before interest, tax, depreciation and amortisation.

Agriculture businesses are in favour given buoyant conditions in the market, with protein, grain and fertiliser shortages offshore partly caused by the Russia-Ukraine conflict.

GrainCorp was earlier said to have been interested in buying listed stock feed business Ridley.

However Ridley, which presented at the UBS Australasia conference in Sydney on Monday, now looks expensive with a $690m market value.