One of Australia’s largest privately-owned cattle companies has been bought-out by a British investor for at least $500 million, ABC Rural understands.
Consolidated Pastoral Company (CPC) has been bought by Guy Hands and his family, along with the CPC management, completing a deal that was flagged in October 2019.
The sale includes just under 300,000 head of cattle, nine pastoral leases across the Northern Territory and Queensland totalling around 3.2 million hectares, and a 90 per cent stake in a feedlot business in Indonesia.
CPC’s properties include Newcastle Waters — made famous when it was purchased by Kerry Packer in 1983 — Bunda, Dungowan, Wrotham Park, Allawah, and Isis Downs.
The deal is of much higher value and includes considerably more cattle than the much-discussed $385 million transaction Gina Rinehart and a Chinese company made for S Kidman and Co in 2016.
Who is Guy Hands?
Guy Hands is a multi-millionaire founder of the British-based private equity firm Terra Firma which claims to have invested €17 billion ($A28.2 billion) in businesses around the world since 1994.
Terra Firma bought CPC from James Packer in 2009 for around $425 million, adding several more cattle stations to its portfolio over the years.
In March 2018, Terra Firma decided to sell CPC as a whole or in parts as part of its ongoing investment strategy.
The company sold off nine of its cattle properties between 2018 and 2019 — with sales totalling around $310 million — to a mixture of Australian and foreign buyers.
Then in October last year, Mr Hands announced he would take a private interest in CPC and buy out his own firm.
“CPC is a high-quality, well-run business with a strong position in a large and growing industry and close proximity to major beef-consuming markets,” Mr Hands said in a statement.
“Even in Australia, where beef-industry standards are among the highest in the world, CPC stands apart for its commitment to protecting the environment, animal welfare, investing in people, good relations with Indonesia, and innovation.
“I have tremendous confidence in the Australian agricultural sector and my family and I are very excited about the future of CPC and proud to be partnering with its management team.”
CPC to continue business as usual
CPC’s chief executive Troy Setter said there would be little change in the company’s direction after the sale.
“We are very focussed on continuing to increase branding rates; increase the kilos of beef produced per animal, per hectare, per property; keeping a strong focus on animal welfare and the environment,” Mr Setter told ABC Rural.
“But also the development of the team and the people at CPC is really important to the Hands family and also to CPC.”
Mr Setter said Mr Hands had a strong belief in the future of the beef industry in Australia.
“In terms of a balanced investment portfolio — having exposure to Australian agriculture and one of the fastest-growing consumer markets in the world with our investment in Indonesia, and the consumer demand throughout the world for Australian agribusiness — is a really good theme to be invested in, in the long term,” he said.
Mr Setter did not reveal the detail of how he or the CPC management were involved in the company’s new ownership.
“We have an investment structure that has the management team aligned to the Hands family,” Mr Setter said.
The plan has the support of CPC, and Mr Setter said the company would continue to explore other opportunities outside the pastoral space.
“We have nothing of that size or scale on the table at the moment, but we are doing some land conversion from cattle to cropping in Queensland, and we were starting to in the Northern Territory this year, but we’ve put it on hold due to coronavirus,” Mr Setter said.
He said the overall sale process of CPC took longer than anticipated.
“We thought it would probably take around two years, and we pushed well into the third year,” Mr Setter said.
“Coronavirus slowed down getting the last bit of it done, but we always thought it would take a couple of years.”
CPC’s leases on Carlton Hill Station in the East Kimberley and Manbulloo Station in the NT will continue.
Article credit – www.abc.net.au