- Country: South Africa
- Industry: Agriculture
- Stage: Exit/Sale of the business
- Investment size: $20,000,000 / min. $15,000,000
- ROI: 30% in 7 years
- Type of investment: Equity
Integrated farming operations (Wheat, Yellow & White Maize and Cattle Farming) along with brick factory is offered for business acquisition (equity offer).
*Dry and irrigated production of wheat, potatoes and both yellow and white maize plus livestock farming. There are also 8 chalets on the farm which point to eco-tourism business. There is a 1km air strip on the farm which can be upgraded to serve the neighbouring town.
There are possibilities of using one of the farm dams for electricity generation and this will depend on the discussions with Eskom as there is already added load on its grid.
*Target market is wholesalers, supermarkets and exporting
*The revenue generation will be in cash, at 15 and 30 days credit and it will be structured according to the client grading. The challenge will be with the government as a customer, as at times they can extend limits to 60 to 90 days.
*Business goals and expected outcomes: Within 3 years operational maximisation of this farm should be achieved which will than make this farm a leader in the provincial Cross Domestic Products with expansion plans being considered.
*The current business operations includes highly intensive production of potatoes, both yellow and white maize, and wheat. Some of the lands are under irrigation and as for diversification there is a brick manufacturing factory on the farm which has raw material life expectancy of 150 years.
*The business is fully operational with client base although this will be made available once there is a progress with regard to acquisition and there is also expansion plans already available and there is budget included in the cash flow forecast.
*The funding needs is for acquisition of this business as well as part covering of operational costs. The offer for the investor is the equity of 48% stake in the business.
*There are farmers around but they are not producing at the scale as this farm does as it is 2800 ha and they have limited resources
*We will be based within the client base
*We will ensure that we will remain consistent in terms of the high quality of our products and implement real time management as our make up in all our dealings, and to consolidate all this we will employ qualified people who are specialists in specific areas.
Rationale for the deal
As per results of the country statistics of update of population register our population has increased from 45 to 49 million which means that food, housing, clothing and transport are the businesses which are going to flourish which than challenges us to immediately put our overalls on and take our cut.
It will to make sure that our quality production standards are maintained and also we will use all the market avenues available to us included in that will be electronic and printed media. With brick factory we will have to immediately elevate its grading to BEE level so that it can also capitalise on the government's infrastructural development.
At the area where this factory is there is no factory besides it therefore gives or offers one the opportunity to dominate the market.
I have had exposure in the marketing as I have been national market development manager and also having been involved in crop production operations I also had to manage production lines of flour manufacturing and tractor production.
Use of financing
The main expenses will be for business/farm acquisition with moveable assets plus the different crops in the fields which will amount to 14 Million Dollars.
Preferably, two rounds of financing will be needed.
Opportunity for the investor
The Investor will be offered 48% shareholding.
The role the investor will play will rest on his or her shoulders we are open for both silent and hands on partnerships. The investor could also participate in the board.
Investment instalment schedule: 1st instalment - 13 Million Dollars, and 2nd instalment - 7 Million Dollars.
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