PSP buys majority stake in BFB from Proterra Investment Partners

The deal represents PSP’s latest major investment in Australian agriculture and has received FIRB approval.

Canada’s Public Sector Pension Investment Board has purchased a majority stake in New South Wales cropping enterprise BFB from US-headquartered Proterra Investment Partners.

The financial terms of the transaction have not been disclosed, but the price is understood to be in the hundreds of millions of dollars. A source familiar with the sale told Agri Investor in August 2018 that the stake in BFB could fetch as much as A$400 million ($287 million; €252 million), but it is believed that the eventual sale price was below this.

The size of the stake PSP is acquiring was also not disclosed, but BFB founder and managing director Terry Brabin told Agri Investor that members of BFB’s executive management would continue to hold a minority stake in the business alongside the Canadian investor. The management team will transfer with the sale.

The deal has received all necessary regulatory approvals, including from the Foreign Investment Review Board.

BFB owns a cropping portfolio comprising 48,753 hectares in the Riverina region of NSW. It also has a piggery and a significant logistics and grain storage and handling operation. The grain storage operation is run as a joint venture with US agricultural giant Cargill and can hold more than 400,000 tonnes of grain in addition to BFB’s on-site storage facilities.

The company’s land is spread over 28 properties located in different climatic conditions and around 44,000 hectares of the portfolio is arable land.

In a statement, PSP said its bid for BFB was “the most compelling” because of the offered price, PSP’s “low execution risk and creditworthiness to complete the transaction”, and the financial resources at PSP’s disposal to support BFB’s expansion plans.

Marc Drouin, managing director and head of natural resources at PSP Investments, said PSP was attracted to BFB’s team, performance and business model.

“This investment is emblematic of PSP’s strategy to partner with world-class and like-minded local operators. We have full confidence in BFB’s management team and its employees to continue to grow this incredible farming business, for the benefit of BFB, the local community and Australia’s agricultural sector,” he said.

The sale marks PSP’s latest commitment to agriculture in Australia. Its natural resources group has C$4.8 billion ($3.6 billion; €3.2 billion) of net assets under management as of March 31, 2018, and has deployed large amounts of that capital in Australia across a range of sectors, including cropping, horticulture and livestock.

Brent Bechtle, founding partner of Proterra Investment Partners, said PSP Investments was an “ideal partner” to support BFB’s future growth and described the company as a “best-in-class agribusiness”.

A source close to the sale told Agri Investor that Proterra was selling BFB to take advantage of a strong selling market in Australia.