WITHIN days of an announcement that Illinois-based Archer Daniels Midland (ADM) would proceed with its takeover of Australia's largest grain handler, news surfaced that a California equity firm had snatched up a 19.5% stake in Ridley Corp., Australia's largest feed company.
AGR Partners acquired the position in Ridley from Guinness Peat Group (GPG) for roughly $54 million (Australian).
The sale of the stock in Ridley was not, in and of itself, a surprise. GPG had announced earlier this year that it might entertain the notion of selling its shares in the company.
What has drawn some interest, particularly on the heels of ADM's pending acquisition of GrainCorp, is the sale of the minority position to an American entity.
Given Australia's position in the market from both a production and a geographic point of view, the country presents an interesting opportunity for U.S. investors and agribusiness concerns looking to expand their holdings in the lucrative Asia-Pacific region.
AGR, based in Visalia, Cal., said its investment strategy is acquiring "minority investments in companies in the agriculture and food value chain."
Founded in 2012, the fund said its typical investment is an ownership of no more than 40% of a company, generally targeting deals valued at $25 million to $75 million.
AGR would not comment on its plans for Ridley beyond its newfound 19.5% position, and its portfolio is not publically disclosed.
Ridley, founded in the early 1980s, reported 2012 earnings of $19.3 million (Australian) on $734.7 million in revenues. Its feed division sold 1.6 million tons of livestock feed last year, more than half of which was poultry feed, according to its annual report.
In February, Ridley sold its Cheetham Salt business to CK Life Sciences for $150 million. The company also had sold its 69% stake in Minnesota-based Ridley Inc. to Fairfax Financial for $81 million in 2008 (Feedstuffs, Sept. 29, 2008).