Big South Australian year-round vegetable grower looks for a partner

The high-tech glasshouse venture on the northern outskirts of Adelaide has received various government support since it was established in 1998.

The development has grown to include 12 hectares of under cover hydroponics to become a major year-round vegetable supplier to Australian supermarkets and other food retailers.

The owner, P'Petual Holdings, now wants to find a partner to fast track its plans to expand.

The greenhouse farming business is a major supplier of tomatoes, cucumbers and eggplants.

Marketed by Colliers, the agents expect the part sale will "spark significant interest in the vicinity of $30 million from large food and horticulture companies, institutions and private equity investors".

P'Petual Holdings is a producer, packer and marketer with the ability to supply high volumes of consistent product on a year-round basis.

Colliers' director of agribusiness transactions, Jesse Manuel, said the P'Petual business had expanded from its original double-skinned plastic greenhouses at its Buckland Park site.

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In recent years it had grown to include a six hectare modern glasshouse development, administration building and service building.

"With the new production area coming online, our client has positioned itself as a significant player in the tomato, mini-cucumber and eggplant categories, as well as pre-pack lines under its well-established Ausfresh brand," Mr Manuel said.

"The owners are open to a range of transaction structures, and we believe the expertise and industry relationships that the principals have developed over two decades would compliment new capital looking take advantage of the current demand for P'Petual's products."

Mr Manuel said an equity partnership to fast track further construction and growth of the existing business or sale and leaseback of the property assets to unlock expansion capital may be attractive to passive investors.

The company unveiled plans in 2017 to more than triple its footprint to include 28ha under cover.

Co-owner and operator Henry Liu said he was excited for the future of the business.

"We have a good product line, a large and diverse customer base and plenty of land for expansion, so not only are we offering a turn-key business as a going concern, but one with a production area that can be nearly doubled in size fairly quickly should one desire," Mr Liu said.

Colliers national director of agribusiness transactions, Tim Altschwager, said the P'Petual business has a strong focus on sustainability.

"P'Petual employing a variety of initiatives to ensure the business minimises its impact on the environment," he said.

Those modern developments include using recycled rainwater, recycling carbon dioxide emissions and integrated pest management.

"The benefits of such activities being higher production yields, reduced costs while lowering their carbon footprint," Mr Altschwager said.

The P'Petual property includes almost 60ha of land across two titles on the western extremity of the Adelaide Plains market garden area at Buckland Park.

Mr Altschwager said the future prospects for uplift in value for the P'Petual site looked extremely positive.

"A large portion of the property is zoned Suburban Neighbourhood, providing for low and medium density residential development and activity centres, with the current developed area being under the Industry Zone allowing for a range of business, commercial and industrial activities.

"The business' ability to supply high volumes of consistent product on a regular basis means its services are highly sought-after by supermarkets and other national clients, including marketers, market wholesalers and agents," he said.

According to Protected Cropping Australia, the indoor cropping sector is worth around $1.8 billion at the farm gate per annum.

That makes it equivalent to 20pc of the value of total vegetable and cut flower production in Australia and is expanding at between 4-6pc annually.

Mr Manuel said protected cropping enables growers to exercise far more control over environmental conditions and produce year round to take advantage of high out-of-season prices.

Colliers is seeking proposals from investors and prospective buyers through expressions of interest to close in mid-July.

For more information contact Jesse Manuel on 0421 550 242 or Tim Altschwager on 0408 814 699.

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