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The New Zealand Rural Land Company has entered into conditional agreements with the Van Leeuwen Group and Associated Entities (VLG) and their main lender to acquire fourteen large-scale dairy assets in South Canterbury and North Otago, totaling approximately 6,350 hectares.

The transaction

As part of the transaction, NZL will acquire 14 dairy assets for an aggregate purchase price of $ 114 million (subject to final adjustments). NZL has also entered into 3 separate leases for the 14 dairy assets which will come into effect upon settlement of the transaction and will have a total annual rent of $ 5.796 million.

Over the past four months, NZL, through its manager, has undertaken extensive due diligence on these assets and incoming tenants. NZL considers that, on the basis of its due diligence, the acquisition represents an attractive purchase.

On April 20, 2021, liquidators (Caliber Partners) were appointed to the seller by its lenders. The escrows were cited by the National Business Review (NBR) on April 23, 2021 as saying that “the company itself has high ebitda” – “it obviously has problems with the capital structure”. NZL believes the transaction announced today resolves these capital structure issues.

Farms and tenants

The farms are a mix of seasonally sourced pastoral dairy farms, grass-based hybrid pastures and cut and hauled winter barn farms, and dairy support blocks. The farms will be leased to three farming groups based in New Zealand:

• 3 farms will be leased to Sustainable Grass Dairy Limited.

• 5 farms will be leased to Performance Dairy Limited.

• 6 farms will be leased to Performance Livestock Limited.

At the time of settlement, all three tenant entities will meet NZL’s criteria for tenants. The leases each have an initial term of 11 years with two 12-year renewal rights.


The transaction will be financed with a combination of cash (approximately $ 70.00M) and the balance in new debt. NZL has secured the terms of this debt from Rabobank and is working on conditions precedent and documentation to allow withdrawal upon settlement.

Settlement of this transaction (and the previously announced Southland dairy farm acquisition) will see NZL temporarily exceed its internal debt policy by 30% of total assets (which is expected to be around 40%). NZL will seek to restore its level of indebtedness in accordance with its policy once further work is completed on its short-term capital requirements. NZL has a full pipeline of rural land acquisitions that it is investigating – covering dairy, wine and electric production. These opportunities should allow NZL to gain scale throughout 2021.

Please see the links below for more details:

Acquisition of 14 large-scale dairy assets

Source: New Zealand Rural Land Company Limited

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