Macquarie buys $350m stake in fresh fruit producer

The deal comes as major foreign and local institutions – including Macquarie Asset Management, which manages almost $920 billion of assets globally – battle to get a slice of Australia’s agricultural sector.

“Fresh Produce Group has a number of growth opportunities in its existing asset base – primarily berries, citrus and table grapes among other things – that the business currently owns and controls,” Macquarie Asset Management agriculture head Colin Rigg said.

“So we’re continuing to build on that investment in the production base supply of the business to feed into both domestic and export markets.”

Macquarie Asset Management’s agricultural business has grown rapidly to become one of the country’s largest farmland investment managers, with over $4.7 billion under management, expanding by $1 billion just in the last two years. That includes cropping portfolio Viridis Ag and Paraway Pastoral.

The latest investment adds to Macquarie’s existing portfolio with an exposure to the fresh fruit market. Fresh Produce Group produces berries, citrus and table grapes, competing with likes of large citrus producer Mildura Fruit Company and table grape producers Perfection Fresh and Romeo’s.

Its operations range across the entire supply chain, from producing fruit to importing produce.

The deal values Fresh Produce Group at around $350 million, making it one of the larger private agriculture transactions this year, according to sources with knowledge of the transaction but not permitted to speak publicly.

Fresh Produce Group’s capacity to grow as strongly Macquarie hopes is underpinned by the producer’s own 1200-hectare farmland footprint, through which it grows its own produce. Most of its competitors rely on buying a portion of their produce from smaller fruit producers.

Fresh Produce Group is owned by its founders and co-chief executives, Robert Nugan and Anthony Poiner, who will retain a significant minority stake in the business. They will continue to lead and manage the business alongside Macquarie.

“Our partnership with Macquarie will bring considerable knowledge, expertise and resources. Macquarie’s investment also aligns with our strategic goals and we are excited about the opportunities it presents for the accelerated development and ongoing success and maturation of the business,” Mr Nugan said.

The accelerating flow of institutional capital into farmland and agribusiness has led to a series of landmark transactions over the past five years.

Among them, Ontario Teachers’ Pension Plan has acquired potato and onion grower Mitolo Group, orchards owner Pomona Valley, and avocado producers Capel Farms and Jasper Farms, among others.