Agriculture & Natural Solutions Acquisition Corporation (ANSC), a special purpose acquisition company (SPAC) backed by Riverstone Holdings and Impact Ag Partners that listed on the NASDAQ in November 2023, has announced that it has entered into a definitive agreement for a business combination with the iconic Australian Food & Agriculture Company Limited (AFA). The combination values AFA at AUD$780 million (approximately $510 million) and the combined company will be an Australian company by the name of Agriculture & Natural Solutions Company Limited. The new company plans to list on the New York Stock Exchange (NYSE) and trade under the ticker symbol “AFAE”.
ANSC’s thesis is to drive investment into decarbonizing agriculture and enhancing natural capital at scale as a climate solution around the world. This business combination aligns with these intentions and what ANSC outlined when it closed its initial public offering in November and stated that its purpose was to complete an initial business combination with a company in the agriculture sector that could provide opportunities for both attractive risk-adjusted returns and benefits from sustainability objectives. AFA fits that bill.
Tracing its history back to 1861 when it was one of the premier Australian sheep and wool businesses, AFA is one of the largest diversified agricultural portfolios in New South Wales, Australia and has a lot to offer.
- An underpinning in real assets (farmland) with geographical diversity and exposure to different climates: the company consists of three major freehold title land aggregations within New South Wales, including approximately 550,000 acres of land in the Deniliquin, Hay and Coonamble districts
- Water rights with over 45,000 acre-feet of water entitlements providing security and risk mitigation in drier years
- Sheep production and genetics with the historic Wanganella and Boonoke Merino Studs, the capacity for approximately 247,000 dry sheep equivalent,
- Livestock production with a a newly expanded 12,000 head (standard cattle units) feedlot
- Crop diversification with approximately 87,000 acres of dryland and irrigated cropping, which produces irrigated cotton, irrigated rice, wheat, barley, canola, corn, chickpeas, and faba beans, among other crops.
Another attractive investment fundamentals that AFA offers: an average return profile over the past ten years of 16% annually through EBITDA yield and asset value growth. Additionally, adding stability to the investment is the long tenured ~70-person management and support staff team that will continue to operate AFA and who will be joined by some members of Impact Ag’s experienced regenerative asset management team.
Beyond the strong fundamentals outlined above, there is tremendous opportunity to scale the new company into an even larger business, build a portfolio of premium brands that leverage its storied history, and create a global carbon sequestration asset while taking advantage of Australia’s attractive carbon credit market – all things that Impact Ag Partners has significant experience building already. There is also opportunity to build and own a renewable power generation portfolio – something that Riverstone Holdings can lend expertise and experience to.
This excites ANSC CEO (and Impact Ag founder) Bert Glover, who shared in a recent press release: “We have always believed that agriculture—backed by the right sort of capital—could deliver nature and climate solutions. ANSC is proud to enter into a business combination with AFA and looks to establish it as a leader in this regenerative transition not just in Australia, but across the world.”
The announcement is not only a significant step for the entities involved – as Impact Ag expands its activities and expertise as an asset manager to more of a co-investor – but is also a step forward for the expansion of regenerative agriculture. When Agriculture & Natural Solutions Company Limited is listed on the NYSE, it will unlock a pool of capital that hasn’t been used in this way before. That’s significant to Glover because it not only addresses Impact Ag’s ultimate mission of continuing to expand the regeneration of land across Australia and the world, but it does so in an expedited way.
“We wanted to act with urgency – and this allows us to operate at speed and scale.” He explains that they could have gone out and raised a fund over the course of a few years, then spent another 1-3 years deploying capital. Instead, they started to raise capital in October 2023 and secured over ($300 million), and in the past 11 months diligenced 100 companies, identified AFA, and begin steps to bring this new combined company to the world’s most trusted equity exchange, NYSE.
The most exciting thing says Glover: this is only the beginning for ANSC . “This is not a one and done,” Glover tells RFSI. There are more opportunities to build on Riverstone’s and Impact Ag’s vision and expand natural capital and regeneration across the globe. “We want to do regenerative at scale – it’s how we can contribute most to the next generation, and this is a meaningful way we can do this.”
Sarah Day Levesque is Managing Director at RFSI & Editor of RFSI News. She can be reached here.