Farmland Partners and American Farmland merge

Real estate investment trust Farmland Partners will merge with American Farmland Company, creating the largest public farmland REIT in the US.

The merger means row crop-focused Farmland Partners will acquire all AFCO’s outstanding common stock in a stock-for-stock transaction. Farmland Partners’ portfolio balance will shift to reflect AFCO’s speciality crop slant, to 75 percent row crop farmland and 25 percent speciality crop farmland, calculated according to the lands’ values.

The transaction is expected to increase Farmland Partners’ total revenue from $26 million to $42 million, based on present and projected income figures, the firm said. The merged company will have a market cap of $400 million.

“This merger will significantly increase Farmland Partners diversification across crops and geographies,” said Farmland Partners chief executive and chairman Paul Pittman. “Thanks to increased scale, we also expect to realise a reduction in overall costs as a percentage of portfolio value.”

Farmland Partners will move AFCO’s operations to its Denver headquarters.

Pittman will remain in his post, while AFCO chairman Dennie Dixon Boardman and chief executive  Thomas Gimbel will join Farmland Partners’ board of directot. AFCO president Robert Cowan is expected to become president at the merged company.

Cost savings will come from consolidation and a streamlined sales and management team, according to the statement.

The two companies have been in talks leading to the merger since April, and it will create more opportunity for a scalable, institutional, well-diversified and high-quality portfolio of farmland assets, according to Gimbel.

AFCO’s portfolio consisted of 22 farms in June, covering approximately 18,322 acres and more than 21 major crop types. Farmland Partners has 271 farms with an aggregate of 115,308 acres.