August 31, 2023

Roc Partners acquires Pace Farm, second-largest egg supplier in Australia

In a significant development for Australia's poultry industry, Roc Partners has officially acquired Pace Farm, the nation's second-largest egg supplier, in a deal valued at approximately AUD 350 million (~US$226 million; AUD 1 = US$0.65) according to sources familiar with the matter, Financial Review reported.

Pace Farm, which has maintained its position as a prominent player in the market, was acquired by Roc Partners from founders, Frank and Dianna Pace. The Paces, after operating the business for over four decades, initiated the sale process in August of the previous year. To facilitate this transition, they engaged PwC to explore potential private equity or strategic buyers for the company, with options ranging from taking a stake to a complete acquisition.

The investment was made through Roc's Premium Food Fund, in collaboration with co-investors. Recent filings with the Australian Securities and Investments Commission reveal that Roc-controlled entity Pace Bidco has undergone directorship adjustments in the past week. Notable appointments include Roc partner Anthony Abraham, Roc managing partner Brad Mytton, and Namoi Cotom non-executive director Sarah Scales. This dedicated team has also assumed leadership over Alimfresh, the enterprise owned by the founding couple of Pace Farm.

An insightful pitch deck for Pace Farm, previously unveiled by Street Talk, highlighted the company's accomplishments, including an impressive revenue of around AUD 300 million (~US$194 million) for the fiscal year, the production of 1.4 million dozen eggs per week, and a commendable 31% market share within Australia.

A significant portion of the company's sales, nearly 75%, were routed through major retail channels, including Woolworths and Coles. The pitch deck further revealed that Pace Farm had strategically invested over AUD 29 million (~US$18.7 million) into its operations over the past three financial years.

Pace Farm's sprawling presence encompasses 32 sites across New South Wales and the Australian Capital Territory, including contracted farms. The company manages 137 sheds that provide housing for a population exceeding 3 million birds. Notably, the property portfolio's combined market value reached AUD 108 million (~US$69.8 million), according to insights from PwC shared with potential investors.

Predictions point to an estimated EBITDA of nearly AUD 40 million (~US$25.8 million) for the ongoing year, with Pace Farm poised to reap the rewards of its engagement with higher-margin free-range egg products. Informed sources suggest that Roc Partners' growth strategy for Pace Farm will prioritize the expansion of its barn and free-range operations.

Led by Michael Lukin, Roc Partners boasts a robust portfolio of agricultural assets, surpassing AUD 2 billion (~US$1.2 billion) in value. Notable entities within this portfolio include Stone Axe Pastoral, a distinguished Wagyu beef producer; ProTen, a leading chicken broiler farm operator; and Flavorite, a prominent glasshouse vegetable grower.

-      Financial Review