INVESTMENT company, Duxton Farms, has announced the acquisition of Piambie Farms, a 1183-hectare irrigated cropping aggregation in Victoria, for approximately $9 million.
The announcement signals the firm’s movement into a new region, with Duxton previously only holding cropping and livestock assets in central New South Wales.
Piambie Farms is an aggregation of two properties, Glen Innes and Piambie, located along the Murray River between Swan Hill and Boundary Bend in northern Victoria.
According to a statement released to the ASX, the transaction will include both purchasing and lease agreements.
“The transaction is split into two stages, with the Company agreeing to acquire the first property Glen Innes for [$1.627 million] with an expected completion date in December 2022,” the statement said.
“The second transaction Piambie involves an option agreement and an operating lease to ensure ongoing working possession and carries a total transaction price of [$7.373M].
The lease will begin in January 2023 and the option is exercisable from July 2023, which is when the company expects the transaction to be completed.
About 935ha of the holding has been developed to irrigation and has historically been cropped to irrigated canola and wheat.
Piambie Farms features deep clay silt lakebed soils that are suitable for the cultivation of a number of summer and winter crops.
The agreement will ensure Duxton has stable earnings profile “by diversifying the portfolio’s geographic footprint and mix of commodities produced”.
“In the short term, Piambie Farms establishes Duxton Farms in a new location with different climatic conditions from the Forbes aggregation, allowing the company to leverage its existing knowledge and expertise and de-risk its geographic concentration.
“The company will likely continue the current cropping program, which will not incur a substantial change in the mix of commodities produced over the next few seasons, although it may look to supplement the wheat and canola crop with irrigated cotton.”
The Board said in the longer term it may look to use the property as a platform to diversify away from annual crop cultivation and into permanent horticulture.
Duxton Farms also indicated that it would commence “environmental sustainability initiatives” at the property, such as continue trialing new methods and technologies linked to soil carbon sequestration.
The transaction is conditional on receiving approval from the Foreign Investment Review Board.
Duxton Farm’s core portfolio consists of eight properties spanning 22,882ha in near Forbes and includes land developed to dryland cropping, irrigated cropping, and livestock management.
It has 3153ha of land developed to irrigation, which is supported by a portfolio of surface water and groundwater entitlements.
Parent company, Duxton Asset Management, has also invested in grains industry-aligned companies, such as T-Ports, the organisation behind the Lucky Bay Port Facility development and the Wallaroo grain terminal, both in South Australia.
Source: Duxton Farms