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Highlights
- Duxton Farms to merge with four agri-focused firms
- $0.24 per share special dividend announced
- Portfolio to nearly double to $298 million in assets
Duxton Farms (ASX:DBF) has unveiled a transformative merger plan that could reshape its position within Australia's agricultural landscape. The company has proposed to merge with four privately-owned Australian businesses engaged in walnuts, dried fruits, orchards, and apiary operations. This move is set to bring a substantial $149 million in pro forma gross assets to the table, nearly doubling the total to an estimated $298 million.
A Strategic Growth Trajectory
The expansion will add significant scale to Duxton Farms' operational footprint. Once the merger is completed, the group will oversee over 177,000 hectares of farmland and hold 32,000 megalitres of water entitlements. This wider coverage across multiple agricultural commodities is designed to mitigate geographic and sector-specific risks, while diversifying revenue streams.
To support the merger, Duxton Farms is raising $4.0 million through a placement of new fully paid ordinary shares at $1.25 each. The success of this capital raise hinges on the implementation of the merger and necessary approvals from shareholders and regulators.
Dividend Payout Following Asset Divestment
As part of its financial optimisation strategy, Duxton Farms has announced a special dividend of $0.24 per share, which will be 85% franked. The dividend follows the recent sale of the Kentucky property, which was divested for $38 million. Notably, the company's two largest shareholders have agreed to participate in the dividend reinvestment plan, representing more than half (52.1%) of the total dividend distribution.
Diversified Portfolio Strategy for Long-Term Value
This merger aligns with Duxton Farms’ multi-year strategy to broaden its asset base across high-growth agricultural segments. By incorporating nuts, dried fruits, beekeeping, and orchard operations, the company is reducing dependence on any single region or crop type. This strategy enhances resilience and positions the business to capture future value opportunities across Australia's agricultural economy.
While Duxton Farms is not currently part of the ASX 200, its scaling efforts and portfolio diversification demonstrate a strong ambition that could elevate its profile in the broader ASX landscape.
As the company continues to cycle capital from lower-yielding to high-growth opportunities, stakeholders can expect a focus on building a sustainable and scalable agricultural platform that aims to deliver consistent returns over the long term.
