Rural Funds Group (ASX: RFF) announced that it is spending $52.7 million to acquire five cattle farms from JBS Australia in Queensland and New South Wales.
Rural Funds Group is a real estate investment trust (REIT) that owns farms and leases them to tenants. JBS Australia is the largest meat and food processing company in Australia, it operates beef, lamb and pork processing facilities in five states and beef feedlots in Queensland and NSW. It is also Australia’s largest meat exporter.
The facilities that Rural Funds Group is acquiring has a combined capacity of 150,000 Standard Cattle Units, which is around 15% of Australia’s lot-fed cattle capability.
Rural Funds Group is also entering into a finance lease with JBS for a 10-year term, with CPI inflation indexation.
The REIT will also give a limited guarantee of $75 million to a business that acquires cattle for JBS feedlots.
Obligations have been guaranteed by JBS’ parent company, Baybrick Pty Ltd, which has net assets of $2.3 billion and owns other food businesses like Primo SmallGoods. Baybrick Pty Ltd’s parent, JBS S.A, is a Brazilian business with a market capitalisation of almost $9 billion and is the largest protein processor in the world.
In 1945, Warren Buffett took $1,200 he made in business and bought 40 acres of farm in Nebraska. He was 14. Buffett was a millionaire by his late 20’s but ‘only’ worth $300m at his 50th birthday. Now he is a $US84 billion investor.
That means he made 99% of his wealth after turning 50! How does a 50-year-old do that when the world seems to be falling apart? Download the free Aussie investing ebook, “What Buffett’s Investing Checklist Can Teach Aussie Investors“ when you join the free Rask Group Investor Club Newsletter. You’ll get insights into the 4 steps Buffett uses to pick his investments.
Click here to join The Rask Group’s Investor Club Newsletter and Download The Ebook!
