THE Elders Rural Services business is in the market for a new parent company, writes FIONA MYERS
As head of Elders Rural Services, David Goodfellow wants to put the record straight.
Yes, the Elders Rural Services business is for sale, but no, it is not a fire sale of a failing asset by the conglomerate parent company Elders Limited.
"It's about our parent entity understanding the iconic Elders Rural Services is a huge and profitable asset which holds enormous value and which can and will be sold," he said.
Mr Goodfellow believes the business will continue to operate under the Elders brand, one of the most recognised in rural Australia.
It's fair to say that Mr Goodfellow is disappointed with some of the publicity surrounding the sale, mostly brought about by the confusion between the sharing of names between the parent entity Elders once known as Futuris and its subsidiary which is for sale, Elders Rural Services
Elders Rural Services has been projected as a business that isn't profitable, when Mr Goodfellow said the opposite was the case.
"The parent entity has three main business arms, and two of them are very capital intensive," he told The Weekly Times at the Paraway wether sale at Coleambally last week.
"Elders Rural Services wants to take advantage of a number of growth opportunities, and we want to find a new parent to support us.
"There is so much interest from international investors at the moment for good Australian agricultural businesses with both a proven track record and potential to grow.
"That's why the Elders board believed the best thing it could do is find a new parent company for the rural services business that could provide capital to reinvest in our growth."
Rather than a quick deal negotiated behind closed doors, Mr Goodfellow said the best thing for all Elders stakeholders, including shareholders, staff and clients, was to run a proper sales process.
The intention is that new owner will have an understanding of the rural industry, empathy with the challenges faced in rural Australia each day and, critically, enough capital to support the growth ambitions of Elders Rural Services.
Greenhills from Sydney has been appointed to co-ordinate the sales process, and it's expected an information memorandum will be available to potential investors by the end of the year.
During the sale process likely to take months, not weeks it would be business as usual, he said.
Elders Rural Services comprises 213 branches, 99 insurance and real estate offices, 145 real estate franchises, two feedlots, the cattle exporting business Elders International, and the New Zealand network as well as many other related joint ventures.
The business's Australian network alone employs about 2000 staff.
Mr Goodfellow said the value in Elders was how everything fit and worked together, so the components would not be sold off singularly, but offered for sale as a whole.
He said he was confident the right owner could be found for Elders Rural Services and genuinely excited by what lay ahead.
"Put simply, it's just the change of ownership of our business from one owner to another.
"It's been portrayed in the media as a bad thing, but it is one of the most exciting times that the staff and clients of Elders Rural Services has seen for many years.
"With new ownership, we hope to be able to re-capitalise our business and re-invest in our people and in our great brand."