Almond producer Select Harvests to buy Piangil orchard

Select Harvests, which is one of Australia’s largest almond producers, is about to expand even further following its acquisition of a “first-tier” orchard in northwest Victoria.

Select Harvests has been eyeing off the Piangil property for seven years.

ALMOND producer Select Harvests is hoping to raise $120 million to buy Piangil Almond Orchard in northwest Victoria.

Select Harvests first eyed off the asset seven years ago but was ultimately not in a position to purchase at the time.

The plan this time hinges on a fully underwritten capital raising comprising of an $80 million entitlement offer and a $40 million placement to acquire the property from United Almonds Limited — an unlisted managed investment scheme — private company Bright Light Agribusiness and orchard operator Lake Lucas Almonds, as well as new debt facilities.

Select Harvests managing director Paul Thompson said Piangil “has always been a target asset”.

“This is at the top of the tree, it’s in the top quartile, I don’t think there are many better assets that have come or will come on to the marketplace,” Mr Thompson said.

“This farm helps us to continue to be one of the largest almond processors globally and we think this is a fantastic opportunity for the business to maintain its growth pattern.”

The property has:

1566ha of almond orchards, of which 1177ha are mature plantings and 389ha are immature;

1877ML of high reliability water entitlements and 622 low reliability water entitlements; and

641ha of unplanted land unsuitable for almond trees.

Piangil Almond Orchard is on the Murray River in the Sunraysia almond growing region of Piangil and is about 86km from Select Harvests’ Carina West processing facility.

The deal will also include the orchard’s 2021 almond crop in exchange for reimbursement of growing costs up the date of harvest.

The total purchase cost is $129 million in cash, in addition to the growing costs for the 2021 almond crop.

The equity raising at an offer price of $5.20 a share represents a 4.8 per cent discount on the company’s closing price on October 1 of $5.46.

The capital raising comprises of a fully underwritten 1 for 6.3 pro-rata accelerated non-renounceable entitlement offer through the issue of 15.3 million new shares to raise $80 million, and a fully-underwritten placement to sophisticated and institutional investors through the issue of 7.7 million new shares to raise $40 million.

Mr Thompson said the tree health and crop outlook for 2021 was “positive”. The challenging pollination phase is complete and recent rain has resulted in higher water allocations and lower water market pricing.

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