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American Farmland Company launches $55m IPO

The REIT offered 6m shares at $8.00 each, but the stocks fell on the first day of trading.

American Farmland Company, the US farmland real estate investment trust (REIT) offered 6 million common shares on the New York Stock Exchange (NYSE) at a price of $8.00 on 20 October. The shares finished the day trading at $6.93 per share, and roughly 76 percent (4.6 million) of the shares had changed hands. The offering is expected to close on 23 October, according to a press release from the REIT.

American Farmland plans to use proceeds of the offering to repay $25 million in outstanding debt and for general corporate and working capital purposes, including capital expenditures at its farms, according to the release. Agri Investor first reported the company’s intention to go public in March of this year.

The IPO makes American Farmland just the third NYSE-listed farmland REIT, following Farmland Partners’ $53 million IPO in April 2014 and Gladstone Land’s $57 million offering in January 2013.

Underwriters of the IPO have a 30-day option to purchase up to an additional 900,000 shares at the initial offering price, less underwriting discounts.

Deutsche Bank Securities, Citigroup, Raymond James, RBC Capital Markets and FBR served as joint bookrunners for the offering. Janney Montgomery Scott, Oppenheimer & Co and Wunderlich served as co-managers.

American Farmland was founded in 2009 by Thomas Gimbel and Dixon Boardman. It is a joint venture between Optima Fund Management, Boardman’s hedge fund; the Fanjul family, one of the longest standing agricultural businesses in the US; LeFark Organisation, a real estate development firm; and William von Mueffling, founder of Cantillon Capital Management, according its website. The REIT owns and leases farmland for row crops and a variety of specialty crops in Arkansas, California, Florida, Georgia and Alabama and in the US Midwest, according to the company’s website. The company trades under the ticker symbol ‘AFCO’.