Elders has entered into an agreement to acquire Delta Agribusiness for $475 million.
The agribusiness giant announced the acquisition on Monday morning as part of its 2024 full year results presentation.
Delta Agribusiness provides rural products and advisory services through a network of 68 locations and approximately 40 independents wholesale customers.
Delta Managing Director Gerard Hines founded the business in 2006 with several long-term colleagues.
During the presentation Managing Director and Chief Executive Officer Mark Allison said the acquisition would fill retail gaps in NSW, North West Victoria and parts of South Australia and Western Australia.
"It will enhance Elders’ technical expertise and offering in ag tech and precision agriculture, plus a 38% ownership of Goanna Ag," Mr Allison said.
He also emphasised the “light touch” approach Elders had successfully used during more than 85 acquisitions over the past nine years, such as the Australian Independent Rural Retailers (AIRR) in 2019.
This means Delta will be left intact to run as a standalone business, retaining its staff, locations and branding, while maintain robust board-based governance oversight. Mr Allison and Elders Chief Financial Officer Paul Rossiter will go onto the board of Delta.
Ahead of the announcement on Monday morning Elders entered into a trading halt for the day.
The acquisition will be funded through about 60% cash consideration and 40% of new Elders shares issued to Delta shareholders as scrip.
The sale is expected to be completed in the first half of 2025, to allow time to satisfy the Australian Competition and Consumer Commission Clearance Condition.
Meanwhile, Elders also released its results for the 12 months to September 30, 2024 - a $128 million underlying earnings before interest and tax - and declared a final dividend of 18 cents per share (70% franked).
The improved second half trading helped to offset the negative earnings impact from the first quarter, which resulted from low livestock prices, lower crop protection margin and subdued client sentiment.
Elders’ annual general meeting will be held on Tuesday, November 2024.