Duxton’s Ace Dairy portfolio hits the market

The aggregation of seven dairy farms in Victoria is in the ‘top echelon’ of Australian dairy producers, a source says.

The portfolio of Ace Dairy Holdings, one of the largest privately owned portfolios of dairy farms in Australia, has been listed for sale.

Ace Dairy’s farms are owned by a fund managed by Duxton Asset Management, which has decided to sell the portfolio to crystallize returns for investors at a time of burgeoning land prices in Australia.

The portfolio comprises seven dairy farms in Victoria’s East Gippsland region, covering a total land area of approximately 2,040ha, including 1,049ha of irrigable land. Ace Dairy also has access to 7,858 mega liters of irrigation water and the sale includes approximately 4,000 cows, which are run under a medium intensity grazing system producing around 2 million kg of milk solids per year.

A source close to the sale said the portfolio was likely to be worth around A$70 million ($54 million; €45 million) and is already attracting interest from a mix of buyers, including offshore and domestic private equity players and other dairy industry participants in Australia.

“This portfolio is up in the top echelon of dairy assets in Australia and is likely to be highly sought-after by buyers,” the source added.

“The timing of the sale is good, as demand for land is strong and milk prices remain favorable both here and in New Zealand,” they added, indicating that Duxton AM hopes to take advantage of strong investor appetite at a busy time for farmland sales in Australia.

The preference is to sell the portfolio in its entirety, but the firm will listen to offers for individual assets, Agri Investor understands.

Several large portfolios have hit the market in a range of sectors in recent months, including cotton giant Auscott, Macquarie Infrastructure and Real Asset’s Lawson Grains, and the ongoing tussle between MIRA and Roc Partners for ASX-listed Vitalharvest Freehold Trust.

In a statement, Ace Dairy head of operations Rob Dawes said: “Over multiple years Ace has carefully put together and invested heavily in a premium dairy aggregation in one of the best dairy regions in Australia. The aggregation, coupled with the quality team, is generating high-quality milk and strong returns.”

PwC has been mandated as lead financial advisor on the sale, alongside LAWD, and is managing the sale process via an expression of interest campaign.