Animal feed firm ForFarmers has struck an £15.2million deal to acquire a UK feed business as it continues its rapid UK expansion.
The Dutch firm, which purchased Ipswich-based BOCM Pauls two years ago in a £71m deal and has based its UK operations in the town, will take on Worcestershire-based Countrywide Farmers’ livestock feed and forage businesses, subject to clearance by the UK Competition Authorities.
Lochem-based ForFarmers announced a rebranding of its UK operations under the parent company name in October.
Earlier this year, it acquired HST Feeds, based in Crewe, Cheshire, in a deal valuing the business at around £11.9m, and Wheyfeed, which is based at Stanton-on-the-Wolds, near Nottingham, and has a workforce of 82, for about £3.9m.
Around 60 staff in the Countrywide businesses being sold will transfer to ForFarmers. Meanwhile, Countrywide will focus on its Countrystore retail network of 53 stores across England and Wales, its energy business which supplies bulk LPG and bottled gas to the rural community and its turf and amenity business where it sees potential for long-term growth.
ForFarmers UK’s chief operating officer Iain Gardner said his group had set itself ambitious growth targets in the UK.
“ForFarmers has had a longstanding and successful relationship with Countrywide since 2005. Countrywide is an excellent example of a livestock feed company that has a tradition of combining the sale of general and specialist feed products with expert feed advice towards its clients. We especially welcome the skills and experiences in these areas of the nearly 60 employees that upon completion of the transaction will join ForFarmers in the UK,” he said.
“This year we have seen the benefits of HST Feeds and Wheyfeed joining the company. The acquisition of Countrywide’s feed and forage business will enable us to extend the Total Feed Business approach to an even wider customer base in our chosen markets.”
ForFarmers chief executive Yoram Knoop said customer demands both in the UK and across Europe were changing as scale and complexity increases in the food and farming industry.
“Farmers increasingly require customised solutions that add value to their business,” he said.
“ForFarmers has reacted to this by developing “The Total Feed Business” approach by supplying livestock nutrition in whatever form our customers require it. On ruminant farms this includes grassland and silage management and the acquisition of Countrywide’s forage business will ensure that ForFarmers has a significant presence in this market. This acquisition is entirely consistent with the on-going development of our portfolio of products and services which forms one of the pillars of ForFarmers strategy. We expect that the acquisition will have a positive influence on earnings per share in 2016.”
John Hardman admitted it had been “a difficult decision” to sell the businesses and came at the end of a strategic review.
However, like UK farming, the agri supply industry is rapidly evolving to cope with the changing global market and the challenges and opportunities this brings. To compete requires significant investment to create economies of scale and cost efficiencies and in the long term a more sustainable UK supply trade, he explained.
“We have concluded that Countrywide Farmers can best serve its customers and shareholders by investing in our Countrystore network and multichannel platform rather than our direct to farm business,” he said.
“Our farm trading businesses have built a strong relationship over the years and this is reflected in the acquiring companies who are all market leaders in their own right. They have been carefully selected by the Countrywide board as being, we believe, the best fit for our customers and staff alike.”
Countrywide’s livestock feed and forage business, comprising compound and alternative feeds, fertilizer and forage seeds, is being sold to ForFarmers.
Meanwhile, its arable business, which sells crop protection and cereal seed products, is being sold to Hutchinsons and terms have been agreed for the sale of its crop marketing business to Openfield.
ForFarmers has a workforce of more than 2,200 employees and production facilities in the Netherlands, Belgium, Germany and the United Kingdom. Last year’s net turnover was €2.6billion euros or about £2bn.
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