P'Petual Holdings is set to spark significant interest in the vicinity of $30million from large food and horticulture companies, institutions, and private equity investors when its assets and business hit the market in the coming weeks.
P'Petual Holdings is a producer, packer, and marketer of hydroponically produced vegetables. The owners of P'Petual Holdings have appointed Colliers to find an investor partner for the South Australia-based company, which commenced business in the late 1990s and has grown to be a major vegetable supplier to supermarkets and greengrocers throughout Australia and internationally.
Colliers' Director of Agribusiness Transactions Jesse Manuel said the P'Petual business had undergone significant expansion in recent years, with the addition of a 6-hectare glasshouse development, administration building, and service building to expand upon the original 6 hectares of double-skinned plastic greenhouses at its Buckland Park site.
"With the new production area coming online, our client has positioned itself as a significant player in the tomato, mini-cucumber, and eggplant categories, as well as pre-pack lines under its well-established Ausfresh brand," Mr. Manuel said.
"The owners are open to a range of transaction structures, and we believe the expertise and industry relationships that the principals have developed over two decades would complement new capital looking to take advantage of the current demand for P'Petual's products. An equity partnership to Fastrack further construction and growth of the existing business or sale and leaseback of the property assets to unlock expansion capital may be attractive to passive investors," he said.
Mr. Henry Liu, who co-owns and operates P'Petual Holdings, said he was very excited about the future of the business. "We have a good product line, a large and diverse customer base, and plenty of land for expansion, so not only are we offering a turn-key business as a going concern but one with a production area that can be nearly doubled in size fairly quickly should one desire."
National Director of Agribusiness Transactions Tim Altschwager said the P'Petual business has a strong focus on sustainability. "P'Petual employing a variety of initiatives to ensure the business minimizes its impact on the environment, including water management through recycled rainwater, recycling carbon dioxide emissions, and integrated pest management with the introduction of beneficial organisms into greenhouse facilities, with the benefits of such activities being higher production yields, reduced costs while lowering their carbon footprint," M.r Altschwager said.
The P'Petual property comprises nearly 60 hectares of land with two titles on the western extremity of the Adelaide Plains market garden area at Buckland Park, and falls within a major urban growth corridor with considerable residential development projects being undertaken in the area by Walker Corporation.
Mr. Altschwager said the future prospects for uplift in value for the P'Petual site looked extremely positive.
"A large portion of the property is zoned Suburban Neighbourhood, providing for low and medium density residential development and activity centers, with the currently developed area being under the Industry Zone allowing for a range of business, commercial and industrial activities," Mr. Altschwager said.
"The business' ability to supply high volumes of consistent product on a regular basis means its services are highly sought-after by supermarkets and other national clients, including marketers, market wholesalers, and agents," he said.
According to Colliers, the Australian agribusiness sector continues to appeal as a solid alternative investment asset for institutional investors looking for long-term returns and portfolio diversification.
"As an investment asset class, Australian food and agriculture assets have been especially sought-after by international companies and investors," Mr. Manuel said. "The growing worldwide population, the affordable nature of Australian land values compared to other countries, and the increasing worldwide demand for Australian food production has underpinned the agricultural land market.
"Over the past few years, Colliers has witnessed the surge of global, sophisticated investment players into the Australian agribusiness investment market. These players have access to capital to finance the asset acquisition and productivity upgrades using new technology or process integration, which ultimately allows them to maximize their returns.
Mr. Manuel said protected cropping enables growers to exercise far more control over environmental conditions and produce year-round to take advantage of high out-of-season prices.
"As crops are protected from the elements, even extreme weather is unlikely to affect them. The need to use environmentally harmful chemicals such as pesticides, fungicides, and herbicides to control pests, predators, and weeds is greatly reduced.
"Water consumption can also be reduced significantly, as much of the water used to irrigate protected crops can be reclaimed and recycled, minimizing wastage and excess water costs, and alternative fuels such as solar power or gas can be utilized for heating and other cropping tasks, reducing energy requirements and the operation's carbon footprint."