Ridley Corporation’s $300M Expansion into Fertiliser Market Adds Strength to ASX200 Agribusinesses

May 12, 2025 01:42 PM AEST | By Team Kalkine Media

Ridley Corporation’s $300M Expansion into Fertiliser Market Adds Strength to ASX200 Agribusinesses — Image source: Shutterstock

Strategic Acquisition with Operational Synergies

Incitec Pivot Fertilisers (IPF) operates one of Australia’s largest fertiliser distribution networks, encompassing 13 major distribution centres, seven regional service hubs, and three liquid fertiliser locations. With a 46% market share along the east coast and 2.2 million tonnes of product distributed in FY2024, IPF brings significant scale to Ridley’s operations.

Ridley sees strong potential for operational synergies estimated at $7 million annually over the next two years. These savings are expected to come from integrating back-office functions and support services.

What’s Included and Excluded

The transaction covers IPF’s distribution business but excludes Dyno Nobel’s fertiliser manufacturing facilities at Phosphate Hill. It also does not include liabilities related to the closure of the Gibson Island and Geelong factories. However, Ridley will gain access to fertiliser supplies from Phosphate Hill through a transitional offtake agreement.

Additionally, Ridley has secured a future supply agreement for 700,000 tonnes of urea per year from Perdaman Chemicals and Fertilisers, with production slated to commence by 2028 in Western Australia.

New Growth Pillar for Ridley

Ridley’s Chair Mick McMahon highlighted the acquisition as a pivotal move, describing it as the company’s fourth major growth pillar. He emphasized how this initiative supports Ridley’s vision of becoming a top-tier agricultural services provider in Australia.

This strategic move is seen as part of a broader pattern among ASX dividend stocks that are expanding their footprint to enhance shareholder value.

Funding the Transaction

To finance the acquisition, Ridley has launched a $125 million capital raising initiative, including a $90 million entitlement offer and a $35 million institutional placement. Its largest shareholder, AGR Agricultural Investments, which holds a 19.4% stake, has committed full support for the offer.

In tandem, Ridley has secured a new $300 million working capital facility and a $350 million revolving debt facility, replacing its previous $150 million facility. The additional liquidity ensures smooth execution of the acquisition and supports future growth.

As Ridley Corporation continues to evolve, this bold step reinforces its growing importance within the ASX200 landscape.

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