Australian Food & Fibre buys Auscott in $500m cotton play
The agribusiness sector is running hot as foreign-backed groups make a play for big assets.
Canadian-backed agribusiness Australian Food & Fibre has snapped up pioneering Australian cotton producer Auscott from its US owners in a deal worth about $500m.
The privately-held AFF, a top Australian producer of cotton, will acquire Auscott, including its properties, ginning, warehousing and marketing operations, from US group J.G. Boswell Company.
Auscott was one of the first cotton producers in Australia and was founded in 1963 by Californian-based J.G. Boswell Company. Since then, it has grown to become a significant producer, with a dedicated team and operations in both farming and holding farmgate capabilities.
It operates about 22,000 hectares of developed cotton country in the NSW Namoi, Gwydir, Macquarie and Murrumbidgee valleys, has five ginning facilities and a 143,000 megalitre water portfolio.
The company sold its Midkin vertically integrated aggregation at Moree in northern NSW for $300m in 2019.
Auscott’s operations, which are focused on central NSW, fit well with AFF’s operations in the north of the state and the combined entity is expected to become an industry force.
The post-farmgate businesses will be led by current Auscott chief executive Ashley Power and managed by his Sydney-based team.
AFF managing director Joe Robinson said Auscott’s high-calibre team shared AFF’s longstanding passion for excellence in cotton production and processing.
“Auscott’s six decades of operations in the sector reflects Australia’s leading position on the global stage in high-quality cotton and the importance of a long horizon for value creation,” he said. ”The combined group will continue to be very supportive of the communities in which it currently operates.”
AFF is a joint venture between the Robinson family and Canada‘s Public Sector Pension Investment Board, which is one of Canada’s largest pension investment managers and a long-term investor in Australian agriculture.
“Joining forces with PSP Investments in 2017 created the opportunity for AFF to achieve its potential,” Mr Robinson said. “Our acquisition of Auscott is a great example of the power of combining local industry expertise and knowledge with long-term capital managed by a team dedicated to agriculture.”
PSP Investments global head of natural resources Marc Drouin said AFF’s acquisition of Auscott was “the latest in a series of strategic initiatives that the company has launched and delivered on since the inception of our joint venture”.
The Canadian group has a strategy of teaming up with high-performing and like-minded local operating partners in the agriculture and timber sectors.
AFF is an irrigated row cropping company, headquartered in Moree in northern NSW. PSP Investments is one of Canada’s largest pension investment managers, and holds land and property assets around the world.
Originally published as Australian Food & Fibre buys Auscott in $500m cotton play
Receivers appointed to $300m apartment project
Receivers have been appointed to one of the largest apartment developments in Sydney’s eastern suburbs, the $300m Nautique apartment block in Rushcutters Bay.
Barrenjoey’s five-year growth plan after push into Hong Kong
Barrenjoey’s head of equities says the investment bank is ‘pleased but not satisfied’ with its overall growth trajectory, as he outlined plans to accelerate expansion of the business.