Queensland Government’s $78 billion investment manager, QIC, will buy 80 per cent of the North Australian Pastoral Company (NAPCo).
NAPCo is one of Australia’s oldest and largest agricultural enterprises, worth about $519 million, with 13 properties including “Wainui” feedlot on the Darling Downs.
Established in the Northern Territory in 1877 at Alexandria Station, it is now a major player in the cattle industry, with approximately 178,000 head on properties covering 5.8m hectares in Queensland and the NT.
It is an industry leader in advanced composite breeding programs and has developed two of its own highly regarded composite breeds.
A price has not been disclosed, but the deal is expected to see QIC pay for an equity value of more than $300m.
QIC (Queensland Investment Corporation) is understood to have also looked at other major cattle station operators such as the 11m hectare S. Kidman and Company empire and the overseas-owned former Packer family business Consolidated Pastoral before working on a deal with the Foster family, which has a major stake in NAPCo.
The Foster family, and its 34pc co-investor, UK-based listed agribusiness MP Evans, originally looked at new investor options three years ago, but failed to attract a suitable price from potential local or overseas buyers.
The Fosters will retain about 20pc interest, giving the joint venture practical management experience to cope with the pastoral industry’s opportunities and challenges and to grow.
Funds advised by QIC, including Australian superannuation capital and the UK-based Pension Protection Fund (PPF) will hold approximately 80 per cent having acquired the remainder of the Foster family’s holding
An offer will be made to other minority shareholders to acquire their shares as part of the transaction or offer them the opportunity, should they wish, to retain an interest in NAP.
Queensland Treasurer, Curtis Pitt, has described the investment as a strong vote of confidence in Queensland.
Mr Pitt first announced QIC was evaluating opportunities to invest in agriculture at the a North Queensland Economic Summit last November.
“Just six months later, this fantastic concept has come to fruition and a deal has been done to bring new capital into this important sector,” Mr Pitt said.
QIC's move is considered the first big spending spree by an Australian financial institution investor in the cattle sector for almost two decades.
Insurance giant AMP made a notable exit from the industry selling the big Stanbroke pastoral company in 2003 for $490m to a consortium led by Victorian-based graingrower, Peter Menegazzo.
QIC is Australia's second largest wholesale funds manager.
“I’m pleased QIC has been able to bring together Australian and international funds to achieve this outcome,” Mr Pitt said.
“It is great news, especially in light of the focus now being put on North Queensland as part of the Palaszczuk Government's efforts to develop Northern Australia,” Mr Pitt said.
“Agriculture is a critical part of the Queensland economy and there’s the potential for it to grow significantly to meet rising Asian demand.”
He said an investor like QIC always looked decades ahead and has confirmed the state was well positioned to produce the clean, healthy food the new Asian middle class will demand.”
“Many commentators have argued for Australian superannuation to play a greater role in supporting Australian agriculture and now QIC has provided a platform and executed a transaction that delivers,” he said.”
“We all know the pastoral sector holds lots of promise, but returns can be variable due to things like drought.
“That’s why it needs investors that are willing to build up business and take a long-term view.”
