Arable businesses set to expand
Dalgety Group, advised by KPMG Corporate Finance, has sold five of its nine animal feed mills to Associated British Nutrition (ABN), another mill and Dalgety's livestock marketing operation to Fishers Feeds, part of the same ABF group, and announced plans to expand its arable merchanting businesses in Britain and Central Europe.
The move is seen by Dalgety as an essential requirement in an industry urgently needing to restructure following a three-year fall in livestock farm incomes.
Dalgety Group managing director Tony Taylor said: "Manufacturing over-capacity has remained a feature of the industry. The sale of six mills now will allow restructuring of the industry to serve a significantly changed livestock farming market.
"ABN and Fishers Feeds have acquired the assets and goodwill of the mills at a fair price," said Mr Taylor. "As a major food chain group, with a serious commitment to the livestock sector, ABN and Fishers have the resources and commitment to play a leading role in this industry. Our decision to sell these mills, together with our straights business and livestock marketing operation, is the best option for our employees, our customers and for UK agriculture."
The transfer of assets, for an undisclosed sum, will allow Dalgety Group to concentrate on its Dalgety Arable and Kenneth Wilson businesses. It is growing its British and Central European arable and grassland farm input, seed processing and crop marketing operations and will announce further acquisitions and continuing investment in both sectors shortly. Proceeds from the transaction will be used to further strengthen the balance sheet and to invest in the remaining business.
Mike Stevens of KPMG Corporate Finance, having advised the management team on the Dalgety Agriculture MBO in June 1998, lead the transaction for the Vendor. Mike said, "this was a very complex transaction due to changing market dynamics in the sector. We were however able to structure a transaction that meets both the buyer and sellers strategic aims and that results in a high quality platform for the further development of the business."
The six mills sold have an annual capacity of 760,000 tonnes and are situated at Bury St Edmunds (Suffolk), Gainsborough (Lincs), Walsingham (Norfolk), Calne (Wilts), Cullompton (Devon) and Lifton (Cornwall). The Gainsborough mill will be operated by Fishers Feeds.
All staff associated with the transferring business have moved across to ABN, some 420 in all.
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