AGR exits New Zealand animal weighing business in $100m sale

TIAA-linked agribusiness investment firm AGR Partners has sold New Zealand-headquartered protein production equipment provider Tru-Test Group to Datamars, a Swiss identification and tracking device provider, for NZ$147.9 million ($97.8 million; €84.41 million).

Founded in 1964, Tru-Test provides livestock weighing scales, electronic identification devices, milk meter equipment and electronic fencing to customers in more than 150 countries. According to an independent review of the Datamars deal prepared by Simmons Corporate Finance in May, Tru-Test has a 50 percent share of the global electronic animal weighing market and 90 percent of the official milk metering business in New Zealand.

The review also said Tru-Test had 98 shareholders and revenue of NZ$140 million in the year ending March 31.

Under the terms of the deal, existing shareholders will retain control of the portion of the business that contains its milk tanks and cooling systems, as Datamars takes over the milk meter and retail solutions business, which accounts for 85 percent of the company’s revenues.

For Datamars, the acquisition follows its previous purchase of SIMCRO, an animal-health delivery system, and continues the company’s pursuit of a new strategy, according to the company’s chief executive Klaus Ackerstaff.

“We will bring together our products, technologies and innovation to form a set of products and services that will provide seamless integration of data in day-to-day operations at the farm level,” said Ackerstaff.

AGR made its initial investment in Tru Test in November 2015. Daniel Master, a managing director at the firm, told Agri Investor that it came to know Tru Test over the course of trips to Australia to oversee its investment in Ridley, an Australian feed business in which the Californian firm purchased an approximately 20 percent stake for $54 million in 2013.

Master said Tru-Test’s customers are typically family-owned businesses that feed calves until they have reached a certain weight, after which they are sold to larger beef packers.

“The beef herd has grown globally, over the past decade particularly, and Tru-Test has been there to provide solutions and equipment to those industries and those farmers,” he noted. “We’re not at the peak of the dairy cycle now – and that’s not motivating the exit at all – it’s just that Datamars is the natural owner of the business.”

Though the majority of Tru-Test’s business is related to dairy equipment and the production of sheep and beef in New Zealand, Master said AGR is also focused on positioning the company to benefit from a 20 percent increase in demand from South America by building a manufacturing capability in Brazil and establishing a presence in Chile and Argentina.