Nutrien Ltd., Saskatoon, Sask., on Sept. 30 announced the close of its acquisition of Ruralco Holdings Limited in Hobart, Tasmania. Nutrien said the combination of Ruralco’s business with its Landmark operations is expected to provide significant benefits for stakeholders and enhance the delivery of products and services to Australian farmers.
Ruralco is one of Australia’s leading agribusinesses, with 216 farm centers and more than 500 locations company-wide. The company supplies approximately 244 independent member retailers through its 157 rural merchandise locations, and employs more than 2,000 staff under a variety of brands. Ruralco is also a leading distributor of water products, provider of water infrastructure services, and broker of water entitlements to the Australian agricultural sector.
Nutrien announced in February 2019 that it had entered into a binding agreement to acquire all the shares of Ruralco at a price of A$4.40 per share, for a total purchase price of $469 million (GM March 1, p. 1).
The Australian Competition and Consumer Commission (ACCC) raised some competitive concerns about the transaction in June (GM June 14, p. 25), but ultimately gave its approval in August (GM Aug. 23, p. 1) after saying it would require Nutrien to divest three rural merchandise stores located in Broome, Western Australia, Alice Springs, Northern Territory, and Hughenden, Queensland, to a purchaser approved by the ACCC (GM Aug. 2, p. 30).
Nutrien said it has steadily grown its retail business and earnings in Australia, with annual EBITDA expected to surpass US$230 million in 2020, of which approximately US$70 million is anticipated to come from the Ruralco acquisition, after accounting for expected synergies.
Nutrien’s Landmark subsidiary has more than 200 locations serving 100,000 clients in Australia. In addition to ag inputs, Landmark is also involved in livestock, wool, real estate, insurance, and finance. Nutrien’s predecessor, Agrium Inc., bought Landmark in 2010, and the company said it has tripled its EBITDA.
Company-wide, Ruralco reported net profit after tax (NPAT) of $25.2 million on revenues of $1.91 billion for the year ending Sept. 30, 2018, up from 2017’s $22.4 million and $1.83 billion.