Strategic Divestment, Family Succession

A large family owned vegetable producer wished to divest due to a lack of family succession options. The assets included multiple titles and exceptionally well developed water assets.

The business had unique characteristics including:

• It was too large for many potential buyers,
• Located in a unique northern region with a high-value marketing window,
• Long serving management team and permanent staff,
• A highly profitable, well known and successful business.

Turbulent Times in 2008-2009

Engaged initially in mid-2008 to achieve a strategic divestment. A buyer completed negotiations and withdrew in the last week of contract terms (late 2009), due to lack of finance approval. A new buyer (well established in the industry) signed Heads of Agreement in December 2009 and the transaction completed at the end of April 2010.

Key Activities

• Collect, collate review and confirm five years of detailed financial and operational information,
• Arrange a sworn valuation by a Registered Valuer,
• Arrange preparation of a detailed farm maps outlining the water infrastructure, irrigation areas, improvements, and comprehensive water reticulation systems,
• Research and prepare a target list of potential buyers,
• Develop a professional Information Memorandum ,
• Conduct a confidential buyer search within industry (trade),
• Liaise with targets, facilitate inspections and negotiate with highly qualified parties,
• Negotiate a Heads of Agreement with the preferred candidate,
• Facilitate contracts drafting and responses to due diligence,
• Close the

Outcomes

They value achieved for this business continues as a benchmark value today. The buyer has since expanded operations three-fold in this region, leveraging the management team, the core acquisition and the quality of water assets to supply summer produce nationwide from this location.