Canadian purchase of Kimberley Meat Co assets gets green light, in $55m deal
Canadian purchase of Kimberley Meat Co assets gets green light, in $55m deal
Kimberley Meat Co plant near Broome
Canadian super fund manager Alberta Investment Management Corp has completed contracts for its purchase of the Kimberley Meat Co beef processing facility in Western Australia’s Kimberley region.
Administrators KordaMentha have confirmed that a purchase price of circa $55 million was negotiated for the combined Yeeda Group of companies, covering the near-new processing plant near Broome plus Yeeda Pastoral Co’s two large nearby pastoral leases, Yeeda and Mt Jowlaenga stations covering 475,000ha of mostly leasehold country and almost 14,000 head of cattle.
The combined price made the processing plant look like an ‘absolute bargain’ in terms of replacement cost, a veteran processing contact told Beef Central. At least one other overseas-based entity showed interest in the plant, but less so in the associated pastoral assets.
Administrators, KordaMentha’s David Osborne, Tony Miskiewicz and Richard Tucker confirmed on Saturday that transaction documents had been signed to sell the pastoral stations, cattle herd and the Kimberley Meat Co to AIMCo.
AIMCo is one of Canada’s largest and most diversified institutional fund managers, with more than CAD$160 billion in assets under management.
The company owns interests in significant agricultural and timberland assets around the world, including in Australia. In November last year, AIMCo and investment partner New Agriculture bought the Kimberley Cattle Portfolio in Western Australia’s northeast. (Editor’s note: To avoid confusion in the name, there was no connection between the Kimberley Cattle Portfolio and either Kimberley Meat Co or Kimberley Pastoral Co.)
That agreement covered Yougawalla Pastoral Co and Argyle Cattle Co, both in Western Australia’s Kimberley region. The portfolio consists of seven pastoral leases covering 1.8 million ha in total, five sub-leases covering 924,325ha, and an agistment agreement over 153,475ha.
Yougawalla Pastoral was offered for sale by the Chinese Hui family’s Archstone Investment Group.
The completion of the Kimberley Group purchase will give it a 1.55 million hectare grazing footprint in WA’s Kimberley region.
AIMCo is one of Canada’s largest institutional investment managers, which invests globally on behalf of pension, endowment and government funds in the Alberta province.
The company has invested in Australia for many years, firstly in forestry and most recently in agriculture through the acquisition of mixed-farming business Lawson Grains in January 2022.
It has since added to the Lawson Grains portfolio with two acquisitions in New South Wales – Jemalong Station near Forbes, and Green Park near Rand.
The Kimberley Meat Co and pastoral assets transaction follows a public sale campaign led by Elders and Poynton Stavrianou as sale advisors, which culminated in the Yeeda Group’s creditors voting in favour of a Deed of Company Arrangement proposal at a meeting on 30 July.
Administrator David Osborne said the transaction gave all stakeholders much needed certainty about the future of this critical Northern Australian pastoral and beef processing infrastructure.
“The administration process has delivered a transaction for AIMCo to carry these assets forward under new ownership, for the benefit of the Kimberley community and Northern Australia’s pastoral industry,” he said.
FIRB approval
The Kimberley Meat Co and Pastoral Co sale is expected to be finalised by December, following Foreign Investment Review Board approval and consent from the WA Pastoral Lands Board.
It’s not anticipated that FIRB will raise objections, as the previous majority owner was also overseas based.
Built in 2016 by major shareholder Merv Key and his partners including Yeeda founder Jack Burton, the processing plant has struggled to operate successfully in recent years, at one point being primed for transition into a cooperative business model intended for support from local landholders. The WA state government intended funding the local pastoralists into the deal, but allegedly pulled out at the final stage.
Merv Key sold his 45pc stake in the plant, together with his share of parent company Yeeda Pastoral Co, to one of his existing partners, ADM Australia, in October last year.
The ADM group’s major shareholder is Hong Kong-based equity fund Asia Debt Management Capital (ADM Capital), which has agricultural investments worldwide, including irrigated tree cropping, stockfeed and commodities trading businesses in Australia. Yeeda and Kimberley Meat Co were ADM’s first investments in the Australian red meat supply chain, Beef Central was told at the time.
The balance of the previous KMC/Yeeda shareholding (20pc) was owned by another long-term investor, Fitzroy River Ltd, described as a family office based in the US and Argentina which has held a stake in Yeeda for the past ten years.
An earlier administrators’ report suggested the companies were $103 million in debt at the time they entered voluntary administration, split roughly equally between secured and unsecured creditors. The largest was the Commonwealth Bank of Australia, owed $43.6 million.
Daily production capacity at the Kimberley Meat Co plant in its current form is around 220 head, with an annual season around 40 weeks, potentially accounting for around 45,000 head of cattle a year. The next closest Australian processing assets of any scale are more than 2300km away, in either Western Australia or South Australia.
Sources close to the business anticipated that AIMCo would re-open the facility in February-March next year, after some refurbishment work.
