Exclusive: ADM buys Aussie almond orchard in third ag deal

The firm has now deployed about two-thirds of the $101m raised for the first close of its Cibus fund.

ADM Capital has acquired a mature almond orchard in the state of Victoria, Australia.

The orchard, which has a planted area of more than 1,000 acres, is expected to generate about 1,400 tons of almonds a year. ADM declined to disclose transaction value.

The deal is the third made by Cibus, the firm’s debut agribusiness fund. Since reaching a $101 million first close in May, the vehicle has deployed about two-thirds of that sum, Rob Appleby, founder and CIO at ADM, told Agri Investor.

The firm is expecting to hit a final close on Cibus in Q2 2018. Agri Investor previously reported that the fund has a $500 million target and hard-cap, and that the team was hoping to seal a second close at the beginning of this year.

This acquisition falls within the primary mandate of Cibus, which sits alongside its early-stage allocation. Set to account for 90 percent of the portfolio, the strategy covers mid-market companies with an EBITDA greater than $3 million that ADM intends to hold for between four and six years, with an internal rate of return target of 20-25 percent.

Aussie factor

Appleby said the firm had been attracted to the asset, located in Lake Powell, in the horticultural district of Sunraysia, because the Australian harvest is “counter-cyclical to the US harvest, providing a selling opportunity for the product.” The asset, he added, is in an “extremely desirable” location, with a “strong foothold” to expand operations in the vicinity.

He explained the fund would look to add value to the asset by acquiring further mature nut orchards and “developing new greenfield sites.” There were also ambitions to grow the asset vertically through bolt-on processing acquisitions.

“Additionally, by using our operational expertise we aim to optimize some of the inefficiencies within the asset to boost margins through yield and cost enhancement.”

Asked whether permanent crops would form the core of Cibus’ pipeline, Appleby noted that the fund is also looking at protein-based investments in the pork, fish, beef and dairy sectors, as well as opportunities in fruit and nuts. “We are looking at several agtech opportunities either as a standalone investment proposition or complementary to the portfolio currently being constructed,” he said.