The Canadian-backed NSW family farming company Australian Food and Fibre has won the tender to buy pioneering cotton farming and ginning business, Auscott.
AFF is already a major cotton growing and ginning operation based at Moree in North West NSW.
It now adds a further 40,000 hectares of country in the state's Namoi, Macquarie and Murrumbidgee valley's to its footprint.
US-owned Auscott also has two cotton gins at Narrabri and others at Trangie and Warren in the Macquarie Valley, and at Hay in the south.
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Although industry speculation had put a price tag on the Auscott assets at about $500 million no price has been disclosed by AFF or its major backing partner PSP Investments.
PSP is one of Canada's largest pension investment managers with net assets totalling about $170 billion, including a big swathe of horticultural and broadacre cropping farmland in Australia.
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PSP invests on behalf of government employees such as military personnel and the Royal Canadian Mounted Police.
Its senior managing director Marc Drouin described the deal as a significant milestone for the fund and its cotton industry partner AFF.
Auscott was established in the earliest days of the modern Australian cotton industry at Narrabri in 1963, and now processes up to 1m bales of fibre in good years, also running warehousing and marketing divisions.
AFF, founded and run by the Robinson family, is no stranger to Auscott's business having already snapped up the cotton giant's showcase 17,300ha Gwydir Valley property, Midkin, and the Ashley gin in late 2019, reputedly for as much as $300m.
Auscott's remaining ventures were then offered for expressions of interest in July last year and include 22,000ha developed for irrigation and about 143,000 megalitres of water entitlements.
The business has been sold by its founding Californian owner the J.G. Boswell Company, which grows cotton, lucerne and tomatoes in big volumes back in the US, also operating two tomato processing plants.
The Australian arm of the US outfit was established on an aggregation of three soldier settlement properties west of Narrabri just a year after other pioneering US farmers kick-started what became a cotton industry boom in the Namoi Valley.
Chairman and chief executive officer James W. Boswell said his family was proud of its three generations of achievement in Australia and support for the cotton industry's development.
'Part of our lives'
"We are pleased and grateful Auscott and its people and their communities will continue to grow under the leadership of AFF," he said.
"We sincerely wish success for everyone involved.
"We have stood together with growers, employees and the community for over 58 years to build something truly world class.
"It has been a big part of our lives since 1963.
"We want to express our appreciation to all the people who have contributed and guided Auscott to its success."
The Auscott sale was brokered through financial services firm PwC, which also negotiated the previous Midkin sale, led by food and agribusiness partner Greg Quinn.
With the majority of Auscott's operations now focused on central NSW, AFF believed the two companies would blend into a highly complementary partnership.
Keeping the standard
AFF managing director Joe Robinson said the combined post-farmgate operations would continue offering the highest standard of services and support to Auscott's external customers and be "very supportive" of the communities in which Auscott currently operated.
The merged post-farmgate businesses will be led by current Auscott CEO Ashley Power, based in Sydney.
Mr Robinson welcomed Auscott's high-calibre team to his 40-plus-year-old AFF group, saying the historic company shared AFF's excellence in cotton production and processing.
"Auscott's six decades of operations in the sector reflects Australia's leading position on the global stage in high-quality cotton and the importance of a long horizon for value creation."
AFF's Auscott acquisition was a great example of the power of combining local industry expertise and knowledge with long-term capital managed by a team dedicated to agriculture.
AFF itself has been in partnership with its Canadian backer and long-term investor in Australian agriculture, PSP since 2017.
PSP's Mr Drouin said the fund's relationship with AFF was emblematic of PSP's strategy of teaming up with high performing and like-minded local operating partners in the agriculture and timber sectors to help them achieve their long-term strategic objectives.
"We are grateful for and proud of our partnership with the Robinson family in AFF," he said.
"We share with our partners a commitment to operational excellence, emphasis on employee health and safety, the sustainable management of the natural resources under our stewardship and being positive contributors to the communities in which we invest."