PSP Investments add Auscott to their Australian land portfolio

One of Australia’s biggest cotton farming businesses has sold to Canadian interests in a deal expected to be worth more than half a billion dollars.

Deal done: The Auscott deal includes 22,000 hectares of developed irrigation country and more than 143,000 megalitres of water entitlements.

THE pension fund for the world-famous Royal Canadian Mounted Police has snapped up one of Australia’s biggest cotton-growing businesses in a deal expected to be worth more than half a billion dollars.

In a statement this evening, Australian Food and Fibre — a joint venture between Canada’s PSP Investments and the Robinson family from northern NSW — said it had acquired 100 per cent of Auscott from US owner JG Boswell Company.

The deal includes 22,000 hectares of developed irrigation country and more than 143,000 megalitres of water entitlements, five ginning facilities capable of producing more than one million bales of cotton annually, two warehousing operations and a classing laboratory.

Auscott was placed on the market in July last year, with expectations of $500-$600 million.

In 2019, Auscott sold its Midkin aggregation to AFF for a rumoured $300 million.

In the statement today, AFF managing director Joe Robinson said “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.

“The combined group will continue to be very supportive of the communities in which it currently operates,” Mr Robinson said in the statement.

PSP Investments senior managing director and global head of natural resources Marc Drouin said “AFF’s acquisition of Auscott represents a significant milestone, and is the latest in a series of strategic initiatives that the company has launched and delivered on since the inception of our joint venture”.

Auscott was founded by a single 2800-hectare farm near Narrabri in NSW in 1963 and now has operations in the Namoi, Macquarie and Murrumbidgee valleys of NSW, with administration, classing and shipping facilities in Sydney. Auscott’s move into the Murrumbidgee Valley occurred in 2014 with the establishment of new ginning facilities at Hay.

PSP, which manages the superannuation of Canada’s government workers including the mounted police and armed services, is Australia’s biggest landholder by value with investments worth more than $4 billion.

It was involved in more than $2.3 billion worth of transactions alone in late 2018 and 2019 – including two of the biggest deals in Australian agriculture’s history.

It has again been active on the buying front in the past year, paying almost $100 million for two major dairy farm portfolios in South Australia and Victoria, in addition to growing its extensive beef, sheep, cropping and horticulture ventures.