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Dairy Farms NZ Limited purchases five farms in Southland


MEDIA RELEASE
29 January 2016

Dairy Farms NZ Limited purchases five farms in Southland


Otapiri farms, a cluster of five dairy farms (1,207 hectares) in Otapiri, central Southland purchased by Dairy Farms NZ Limited.

Dairy Farms NZ Limited (“DFNZ”) is pleased to announce the purchase of five contiguous dairy farms in Otapiri in central Southland following Overseas Investment Office approval. The Otapiri farms total 1,207 hectares. Settlement on the first two farms of the cluster of five, occurred during the week commencing 18 January 2016, with settlement on the remaining three farms planned for 1 June 2016.

The latest farm acquisitions add to the existing portfolio of two owned and one leased farm in mid Canterbury, acquired by DFNZ in 2014. With the five new farms DFNZ will milk in excess of 5,500 cows, with the owned portfolio representing approximately 1,825 hectares.

DFNZ was established in 2014 with the aim of providing New Zealand investors the opportunity to have a direct investment in dairy farming in the best dairying regions of the country, with the ultimate aim of seeking, via an IPO, a listing onto the NZX. DFNZ Chairman, David Belcher, said he is delighted with the significant step in delivering on the business strategy of acquiring farms in Canterbury, Southland and Otago and in turn partnering with herd owning sharemilkers.

Chief Executive Officer, Craig McBeth, said, "we see the herd owning sharemilker model as a critical part of our success given the strong alignment of business drivers for the sharemilker and DFNZ as the land owner".

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DFNZ will now commence a planned $4.3 million development programme on the Southland properties, which includes investment in housing, draining, environmental mitigation and a new cow shed.

DFNZ expects to embark on a new programme of capital raising to allow for further acquisitions facilitating a future listing onto the NZX. The Company currently has over 40 shareholders, the majority of whom are New Zealand citizens, with the cornerstone shareholder being Chicago-based investor Sam Zell via his investment entity EGI-NZ Dairy LLC. Mr Zell has a successful record of investing in businesses, including New Zealand businesses and has been involved in numerous IPOs and sharemarket listings internationally.

David Belcher said that the new capital raise programme will be targeted at New Zealand investors inline with the Board’s plan to have a New Zealand-dominated share register.

DFNZ’s business strategy involves:
Purchasing high quality dairy land exclusively in Canterbury, Otago & Southland;
Adding value to the land by new investment in farming infrastructure including
environmental, irrigation, drainage, new sheds & housing;
Utilising herd owning sharemilkers (formerly known as 50/50 sharemilkers);
A Board of Directors dominated by highly experienced dairy farmers (Earl Rattray,
Richard Townsend & Ian Tulloch);
A conservative capital structure;
An internalised management team; and
Providing the opportunity for New Zealand investors to invest directly into dairy farming.
ENDS

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