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Terra Firma to sell stake in beef producer

The UK private equity firm has hired Barclays Capital to advise on the growth capital injection.

UK private equity firm Terra Firma has hired Barclays Capital to advise on a stake sale in Consolidated Pastoral Company, the Australian beef producer it acquired in March 2009.

The stake sale will fund growth and expansion of the company and is not a sell-down by Terra Firma, according to a source close to the deal.

Terra Firma would not comment on the move but Australian Financial Review reported that the firm and CPC had been approached by various Chinese investors.

Consolidated Pastoral Company has an enterprise value of $668 million, according to its website. It owns and operates a portfolio of 19 cattle stations with more than 360,000 head of cattle across 5.6m hectares in Australia. The company sells beef to Asian consumer markets and exports cattle, as well as domestic sales.

Investment in the livestock sector in the country has picked up pace in recent months with large acquisitions by high net worth individuals such as Gina Rinehart who invested in a beef processing joint venture in the summer.

The recent free trade agreement with China is also set to boost the sector more generally as China will completely cut tariffs on Australian meat imports within a 10 year period.

Terra Firma currently has $11.45 billion of assets under management. The firm focuses on three areas in particular: transformational private equity; operational real estate; and infrastructure, including renewable energy.