$144m Ceres Ag goes on auction after failing to find domestic buyer off market

Integrated NSW beef and cropping enterprise will be subject to an EOI campaign in October, allowing foreign capital to make a bid.

Ceres Agriculture, one of Australia’s largest integrated beef and cropping businesses, has been advertized for sale in a transaction that could fetch more than A$200 million ($143.5 million; €124.3 million).

The enterprise finishes more than 100,000 cattle and produces approximately 40,000 tons of grain, pulses and oilseeds per year. It covers 25,788 hectares of land in the Golden Triangle region of north-west New South Wales.

Ceres has been shopped around off-market since Q2 2017 but is now being advertized on the market to “bring the process to a close,” CBRE Agribusiness director Richard Royle told Agri Investor. The on-market process will also allow non-Australian capital to get involved, with the expression-of-interest campaign part of the steps taken to satisfy Foreign Investment Review Board requirements around foreign ownership of agricultural assets.

The business can accommodate 30,000 cattle on site at any one time and run up to three cycles of cattle per year currently, with scope to expand the current turnoff capacity to more than 140,000 annually.

Cattle are housed in the on-site 7,000 SCU (single cattle unit) feedlot, with the remainder in paddocks under a grain/grass-fed system. Ceres produces around 40 percent of its own grain currently, and there is permission in place to expand the feedlot to 20,000 SCU.

Ceres’ property includes approximately 18,000 hectares of dry-land cropping producing premium-grade barley, bread wheat, durum wheat, sorghum, corn and chickpeas. The business also has its own logistics operation, with a fleet of 20 trucks able to move cattle and grain.

Ceres’ major shareholder is Pegela Pastoral Company, based in Oberon in NSW’s Central Tablelands region. Pegela’s owners retain other agricultural interests in southern NSW and are seeking to realize their investment in Ceres in order to focus on other operations, Agri Investor understands.

“The size and the integrated business model with beef and grain in Australia’s best cropping country make this pretty unique,” Royle said. “The interest has been really far and wide, including private equity, major beef operators and others.”

The business is being offered on a walk-in, walk-out basis with the expression-of-interest campaign closing on October 31.