AAM Investment Group has acquired Allied Timber Products’ softwood sawmill and business located in Bathurst for about $25 million.
The investment manager has already been making big moves in the agricultural space, buying poultry farms last year. This latest transaction is yet another addition to its diversified, unlisted investment offerings now valued at $160 million.
“AAM will continue to source high quality assets where value can be created through active management and investing capital to promote improved operational efficiencies and sustainable growth,” AAM managing director Garry Edwards said.
AAM’s target is to acquire and develop a portfolio of up to $500 million of diversified agribusiness assets over five years that incorporates assets.
Last year National Australia Bank was mandated to raise $13 million in equity for the investment which was marketed with a targeted investment yield of 12 per cent.
An annual performance fee of 20 per cent of the portion of outperformance of the Trust over a target Unitholder distribution yield of 10 per cent per annum was expected.
The saw mill sits on six hectares and processes about 92,000 cubic metres of saw logs per annum. It has a development approval to process 210,000 cubic metres.
The mill, developed in 2006 on a greenfield site, has a long-term contract with NSW Forestry.
“Renewable regrowth timber products are an efficient method of long-term carbon capture and storage, production of these products provides positive environmental outcomes, with two-thirds of Australia’s greenhouse gas emissions being captured in timber products, as well as high quality, cost effective, Australian-produced building and fencing products,” Mr Edwards said.
“AAM will continue to invest in sustainability outcomes through investment in additional on-site renewable energy infrastructure”.
Market analysis has indicated there are around six direct competitors owning about 24 mills with a volume capacity larger than 70,000 cubic metres.
AAM said it would release a fourth and fifth series of unlisted investment offerings for wholesale sophisticated investors.
“Offerings will involve further investments in high quality protein production and further portfolio diversification through uncorrelated opportunities,” AAM said in a statement.
This latest acquisition by AAM succeeds the purchase of the Riverlands Free Range Poultry Assets located in South Australia, and Legune Station, a 178,870 ha cattle property in the Northern Territory.