Australians swoop on largest Kiwi poultry farm
The owners of New Zealand’s biggest poultry farm have sold it to an Australian equity firm as they face a $50 million upgrade to scrap cage production.
Australia’s Navis Capital acquired a majority shareholding in Dunedin-based Mainland Poultry for a reported $350m from long standing owners Michael Guthrie, Murray Valentine and Jeffrey Winmall.
Dunedin-based director and shareholder Murray Valentine confirmed the stake had been sold pending regulatory approvals from the Overseas Investment Office.
Mainland Poultry sells about one third of all eggs produced in New Zealand under the Zeagold, Farmer Brown and Woodland brands, operating from seven farms around the country.
Valentine declined to confirm the price, varying in some earlier reports between $150m to $400m.
Over the years Mainland has been the target of animal rights activists for its caged birds.
“We have a five year programme to comply with animal welfare code which requires a change from cages to a colony system with 60 to 100 birds in a greater area.
“That’s capital expenditure costing between $40m to $60m. I’m getting older and so are the other shareholders.
“The idea of putting more money in or taking on more debt didn’t seem sensible to us. We spoke to a number of people in the capital raising sector and took their advice.”
The current owners would retain a stake in the company and positions on the board of directors. although Valentine would not reveal what percentage they would continue to own.
Valentine said the Navis group had a network of Asian offices and had been impressed with the vertical integration of Mainland Poultry – it also has feed and marketing divisions.
Mainland exports fresh and processed eggs to Singapore, Hong Kong and Pacific countries. It also sells its feed products via its MainFeeds plants in Auckland, Manawatu and Otago overseas for livestock.
The Sydney-based buyout firm Navis ousted other competitors in the race, including Pacific Equity Partners, Adamantem Capital, and some local bidders.
Generally, equity firms buy assets with the aim of improving them and selling later at a profit.
Mainland’s founders in the 1990s included the late Howard Paterson, a well known Dunedin entrepreneur. After his death in the early 2000s his shareholding was acquired by the other stakeholders.