Elders launch into $475m takeover of rival
Elders have announced it will buy a rival NSW based agribusiness group in a huge deal, amid a fall in profit in the last year by 55 per cent.
A $475 million deal has been struck by leading rural services retailer Elders to acquire Australian agribusiness adviser and rural products provider, Delta Agribusiness.
On Monday Elders announced to the ASX it had entered into an agreement to acquire 100 per cent of the shares in Delta Agribusiness, for an enterprise value of $475 million.
In the last financial year, Delta Agribusiness recorded revenue of $835 million and earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $53 million, supported its 68 branches and 40 independent wholesale customers spread throughout Victoria, NSW, southern Queensland, South Australia and Western Australia.
Elders managing director Mark Allison said the purchase of Delta continues their record of growing their business through “disciplined acquisitions”.
“Delta provides us with greater exposure to key local retail markets as well as a leading agronomy and farm advisory team to complement and extend our products and services range for rural and regional Australians,” he said.
Delta managing director and co-founder Gerard Hines said their management team would remain unchanged.
Established in 2006 Delta Agribusiness’ rural products include crop protection, seeds, animal health products, fertilisers- supported by 45,000 tonnes of storage on the East Coast of Australia, fuel and general merchandise.
Elders’ acquisition is expected to be completed in the first-half of 2025 due to the time expected to satisfy ACCC approval.
In the announcement Elders said the transaction will be funded by $246 million in fully underwritten pro rata accelerated non-renounceable entitlement offer, a $110 million new revolving loan facility and $190 million of new Elders shared issued to Delta shareholders as scrip consideration at $8.52 per share (equal to about 22 million shares).
On Monday Elders also announced their 2023-24 financial year results where the agribusiness provider recorded a 55 per cent decline in profit.
Elders’ statutory profit was $45.1 million in the past financial year, down from $100.8 million in 2022-23, while underlying EBIT was $128 million this year, down 42.8 per cent compared to last year’s $170.8 million.
“Elders’ FY24 performance has reaffirmed for us the importance of commitment to a tightly managed cost base and a geographically diverse multi-product portfolio, to deliver strong earnings and value for shareholders through the cycles,” said Mr Allison.
In the last financial year Elders’ sales revenue also declined by $190.1 million to $3.131 billion, down from $3.321 billion in the year prior.
Unlocking soil nutrition at Summit Park
The Parker family has made minimising their impact on the environment a priority on their Western District sheep farm without compromising production.
Balancing the bottom-line at Willbriggie
Growing rice with the environment and bottom-line in mind is paying dividends for the Andreazza family. See how they run a successful summer and winter cropping operation.