New Forests and AIMCo Acquire Lawson Grains From Macquarie for $600M
Canadian institutional investor AIMCo and global forestry investment manager New Forests have a history of partnering on sustainable forestry and carbon market investments in Australia, New Zealand, and the U.S. that reaches back for more than 10 years. Their latest co-investment, however, is of a different stripe.
Following a public tender process carried out and managed by Danny Thomas, Col Medway, and John McKillop with Land Agribusiness Water and Development (LAWD), Macquarie Asset Management announced its agreement to sell Lawson Grains - one of the top corporate grain and oilseed growers in Australia - to New Forests and AIMCo for $600 million.
Owned through Macquarie Crop Partners, Lawson Grains, which is headquartered in Albury, New South Wales, represents one of the single largest cropping assets to ever be offered in Australia. The enterprise spans 90,500 hectares of arable agricultural land across New South Wales and Western Australia producing more than 200,000 tons of wheat, barley, canola, and pulses per year.
Broken down, the portfolio includes four aggregations in New South Wales: Kealandi (9,390 arable hectares) in Moree; Grassmere (9,914 arable hectares) in Oaklands; Borambil (8,255 arable hectares), outside of Rand; and Uah (10,524 arable hectares) in Forbes — and six aggregations in Western Australia: Walyoo (5,574 arable hectares) in Dandaragan; Jerry South at Jerramungup; St Leonards and Wongan (10,770 arable hectares) in Wongan Hills; Gunnadoo (12,527 arable hectares) in Jacup; and Hakea (12,734 arable hectares) in Munglinup.
When placed on the market in March of this year, it was noted by Macquarie that the sale will include Lawson’s management and technical team centered at its Albury headquarters, who are part of the company’s national staff totaling 55 people, and a significant fleet of equipment used to harvest Lawson Grains’ massive acreage.
"Lawson Grains is a high quality and diversified agricultural business with an experienced management team,” said Mark Rogers, senior managing director, Australia, New Zealand, U.S., New Forests. “We look forward to working with the management team to continue to build the business and add value."
Coming off a bumper crop season last year together with MIRA’s focus on improving output, as well as good rainfall at the beginning of this season in southern Western Australia, and good soil moisture across New South Wales, are all aligning conditions that bode well for the new owners for 2021.
Headquartered in Sydney since its inception in 2005, New Forests is a certified B corporation with operations in Australia, New Zealand, Southeast Asia, and the U.S. offering high-impact strategies in sustainable forestry and its related sectors. The firm just completed the acquisition of 156,000 acres of forest land in the Hilt-Siskiyou Forest - a mixed conifer forest along the border of California and Oregon - in July of this year, and manages a portfolio of approximately 1 million hectares (2.4 million acres) carrying a value of $4.5 billion spread across sustainable forest plantations, areas of natural forest conservation, carbon projects, rural land, row cropping, and timber processing.
Rogers commented, “New Forests will bring its sustainability approach to Lawson Grains, managing for sustainable agricultural production and natural climate solutions including soil carbon and native revegetation and focusing on community engagement. This investment is a natural extension to New Forests' landscape management approach, ensuring integrated production across Australia's varied landscape, and backed by our valued client AIMCo."
AIMCo is one of the largest and most diversified institutional investment managers in Canada. With more than $120 billion of AUM, AIMCo invests on a global scale on behalf of 32 pensions, endowment, and government funds in the Province of Alberta. AIMCo’s timber mandate came into being in 2005, and was expanded to include agricultural assets in 2016 forming Renewable Resources.
"AIMCo has a long history of making sustainable investments into Australia, on behalf of its clients,” said Ben Hawkins, senior vice president, head of infrastructure and Renewable Resources, AIMCo. “The opportunity to acquire Lawson Grains, a fully integrated grains business built on quality assets, people and systems presents an attractive opportunity for AIMCo's Renewable Resource portfolio to add a significant core asset. We look forward to continuing the growth of the business through our longstanding partnership with New Forests, as good stewards of these high-quality agricultural assets."
This decision by Macquarie to divest Lawson Grains comes at the conclusion of a 10-year investment mandate. During its period of ownership, Macquarie invested in a range of improvements on the portfolio through the integration of sensor technologies, weed control technologies, variable rate input methods, controlled traffic cropping initiatives, enhanced employment of microbials to improve soil health and productivity, along with farming best-practices to position the assets for their next phase of growth and ownership.
"We are delighted to have reached an agreement for the sale of Lawson Grains, which we are proud to have built on behalf of our investors over the past 10 years,” said Liz O’Leary, head of agriculture, Macquarie Asset Management.
"This transaction demonstrates the natural evolution of agriculture as an increasingly mature and attractive alternative investment class,” she continued. “It provides a vote of confidence for investors regarding the opportunity to invest in agriculture businesses and ultimately realize the investments in the same way they are used to doing in other asset classes. Realizing this successful investment will enable our business to look ahead to the next opportunity."