AFA re-enters market following collapse of $780M deal

A major agricultural player in New South Wales is looking to re-enter the market after a failed $780 million deal due to equity market fluctuations. Australian Food & Agriculture Co, a privately owned entity with 30 years of industry experience, initially announced plans to sell off 13 NSW farms covering 225,405 hectares in hopes of raising $700 million.

Following this announcement, a deal was struck with Agriculture & Natural Solutions Acquisition Corporation (ANSC), a NASDAQ-listed firm backed by Impact Ag Partners and Riverstone Holdings LLC, both based in the US. However, just under a year later, the agreement was terminated by mutual consent. While no specific reasons were provided for the decision, the corporation’s annual report had hinted at the possibility of the deal falling through due to market volatility.

The termination centered on discussions about the best way forward for the business combination in light of unstable equity market conditions, as highlighted in the annual report. Risks associated with completing the deal included broader market instability, capital and debt market volatility, as well as challenges in executing cross-border transactions and potential geopolitical issues.

Looking ahead, the sale of the diverse portfolio is set to be handled by Bell Potter, and the owners are seeking a buyer interested in acquiring the business as a whole rather than individual farms. Despite some disappointment, AFA plans to reach out to interested parties from before and strategize its approach to the market in the days to come.

As for ANSC, a special purpose acquisition company with a limited lifespan, the leadership is determined to complete a business deal before the mandatory liquidation date in November. The corporation had previously signaled a focus on agricultural sector investments, particularly in decarbonization opportunities like natural capital marketplace and sequestration technologies.

Under the ownership of Bell Group Holdings Pty Limited, AFA boasts a sizable and diversified agricultural enterprise established in 1993. With significant land holdings in Deniliquin, Hay, and Coonamble, the company’s livestock operations encompass sheep wool and meat, as well as cattle. Additionally, AFA runs prestigious merino sheep studs, Wanganella, and Poll Boonoke, and conducts diverse cropping activities, including cotton, rice, wheat, barley, canola, and more.

Moreover, the company has ventured into cattle feedlot operations with the Conargo feedlot, demonstrating a commitment to expanding its agricultural footprint. Despite recent setbacks in the deal with ANSC, AFA remains a key player in the NSW agricultural landscape, poised to navigate challenges and opportunities in the sector.