Description

The Farm Company is situated in Cape Town, South Africa.
The Farm Company includes the largest operational dairy farm in the Western Cape, a coveted farm with an ongoing maize, wheat and cattle farms, and dairy operations.
Collectively, the Farm’s size and total area is around 7000 hectares, which was last valued by a an independent evaluator at $100mn (inclusing the wine operations which were sold separately).
The Owner applies a policy of using almost all cash surpluses to expand and develop the Farm income potential by purchasing new machinery and equipment and developing farm infrastructure (Irrigation works and buildings).
All the farms are very well integrated with good wheat ground and water is available as well.

Dairy
The Company’s dairy operation is a world-class operation.
A milk supply off-take agreement is currently in place with a national South African milk producer that has another 6.5 years to run before the option to renew the contract is exercised.
Milk income is budgeted at ~$17mn per year.
For every 10c/L increase in the Milk Price, gross milk income increases by $340,000 per year.
About 3.85mn liters of milk is produced per month from ~8500 Holstein cows. In total the Company has 8500 Holstein cows on the farm, 4000 in milk production and the balance are young heifers and dry cows.

Cattle Sales
Income of $95k per month from the sale of about 160 cows at $593 per cow.
Additional income from cattle sales at $5k per month from the sale of about 150 bull calves at $35.

Wheat
Income of ~$4mn per year.

Financials:
Figures in USD mn
Year Revenue EBITDA
2017P 23 4.5
2016A 20 3.4
2015A 21 3.8
2014A 20 2.3

2016 was a below average year and the year 2017 we are back to normal. Due to all the small dairy farmers that have stopped milking there is a major shortage of milk. The retail price of milk keeps on increasing, so the Farm’s dairy revenue also increases.
The wheat harvest this year (2017) is yielding 5 tons per hectare, which is a yield of 2.5 times more than last year.

Transaction:
The Owner is open to selling majority or 100% of the Farm Company at a price of $55mn.