THE highly anticipated Information Memorandum pertaining to the sale of Australia's largest private landholder, S. Kidman & Co, has been released.
Ernst & Young (EY) Adelaide managing partner Don Manifold said the parcel of blue ribbon properties offered a rare opportunity to obtain a large-scale agricultural business in excellent financial condition, with a balanced and diverse property portfolio.
Already, EY have been flooded with significant interest in the sale.
"It's gained a lot of attention from domestic and international bidders," Mr Manifold said.
"The iconic name of Kidman itself seems to be attracting a lot of attention.
"We've got a very significant number of domestic and international parties that have signed confidentiality deeds and proven that they have the financial capacity to make the acquisition."
With much industry discussion surrounding the sale, Mr Manifold said EY had taken the unprecedented step of issuing information to the wider public.
"Never in my life have I issued a press release announcing an Information Memorandum," he said.
"The reason for that is it's attracted so much interest; we'd rather get the facts out there than let things run."
The question on everyone's lips - who would secure the iconic Australian company - would not be answered until the transaction was completed, but Mr Manifold said a large number of Australian bidders were part of the process.
"There's not a vast majority of international bidders, in fact more than half of the bidders are Australian," he said.
Over the course of the next five to six weeks, interested parties were invited to submit non-binding indicative offers, with a short list of parties to be taken through to undertake detailed due diligence.
Mr Manifold expects the transaction to be completed "this side of Christmas".
According to the memorandum, S. Kidman & Co consists of 12 enterprises, including 10 cattle stations, a bull breeding stud farm and a feedlot, generating approximately 15,000t of beef annually.
At the end of March the company carried 151,000 head of branded cattle, which was lower than the long term average carrying level due to the Qld drought.
After brandings and sales, the herd is estimated to be about 164,000 head at the end of June.
Mr Manifold said financial earnings had been strong, with the company debt free coming off "not such a great period" for Australian cattle due to low saleyard prices.
"Prices have increased quite strongly over the past 12 months, so you'd expect its earnings to be much stronger into the future," he said.
The landmark sale provided an "amazing" opportunity, according to Mr Manifold.
"I don't think these opportunities come around very often," he said.
"It's probably gong to be a wonderful decade for cattle going forward so we're not surprised by the interest and we're very pleased that we've received the level of interest we have."
One of the benefits for any investor, Mr Manifold said, was that all of the management team, station managers and staff would transfer to the new owner.
"Basically everything in that business, including the paintings on the wall in head office, will go," he said. "That's probably reasonably unique for a cattle property, any party that walks in will have a complete business."
Alongside favourable industry conditions, Mr Manifold said the other great benefit was that S. Kidman & Co was "just a bloody well run business".
"It's got a management team that's been doing the same job for a very long time and has slowly and carefully - as a company over 116 years - got a portfolio of properties in the major cattle producing areas in Australia, which means that it's got flexibility in supply," he said.
"Rather than having a property in SA, for example, subject to the vagaries of the processors etc, if you've got land from WA through to NT to the Qld Channel Country and back into SA, you can access abattoirs in several states, live export markets - you've got a significant flexibility to effectively maximise yield and maximise profit."
Mr Manifold said when EY first pitched for the sale tender, sale options such as selling as a whole or individual properties were discussed with the Kidman board.
"We certainly got a very clear message from the board that this is being sold as a whole, there's no way this thing is going to get cut up and sold to the highest bidder," he said.
"It's not been offered anywhere in the information memorandum, it's not even an option - you take the lot, or you don't get it at all. That's one thing that is pleasing, is that it will be sold as a whole."
Read an excerpt from S. Kidman & Co's Information Memorandum here.
