Elders to acquire Australian Independent Rural Retailers (AIRR)

Elders is set to acquire Australian Independent Rural Retailers (AIRR).

The acquisition will give Elders a footprint in the wholesale supply of farm products.

It has been suggested it positions Elders to compete more strongly with Canadian fertiliser giant Nutrient.

Elders has made a $187 million scrip and cash offer for unlisted private wholesale buying group Australian Independent Rural Retailers.

The agribusiness announced on Monday it had entered a scheme of implementation to acquire 100 per cent of AIRR’s shares, with the half-scrip, half-cash bid already receiving the blessing of the takeover target’s board.

Elders, which remains in a trading halt, said it was funding the acquisition through a $137 million equity raising and the issue of $79 million of new Elders shares to AIRR shareholders as scrip consideration.

The $10.85 per share deal values AIRR at $157 million on an equity basis and $187 million on an enterprise value basis.

Elders said the acquisition will allow it to enter the wholesale rural services market with net synergies of $6.6 million to $9.33 million per annum to be
gradually realised over the next two years.

“Acquiring AIRR will give Elders a national wholesale platform,” Elders chief executive Mark Allison said.