The Livestock Improvement Company is seeking shareholder support to acquire 50 per cent stake in leading global agri-tech company Afimilk, based in Israel.
Coming out of a trading halt this morning, LIC announced the conditional deal, reported yesterday, was valued $108.7 million.
The purchase price would be funded primarily through new debt under LIC’s current facilities, with the investment intended to be self-funding via projected dividend streams.
LIC chair Murray King also said good faith discussions have also started to determine whether Afimilk would acquire the parts of LIC’s automation business that are complementary to its own.
This was in anticipation of greater scale for R&D and greater synergies.
"However, there is no certainty that terms for that transaction will be concluded," he added.
Afimilk develops and commercialises dairy farm technology and farm automation systems. It was widely regarded as one of the industry leading producers of milk meters, behaviour sensors, and farm management software with strong distribution across Europe and North America.
King said the investment will help give LIC access to the data it needs to deliver superior herd improvement services and agri-tech for New Zealand farmers into the future and will improve access to on-farm technology solutions.
“To do that, it’s vital we keep our world-leading edge in pastoral dairy farming data, while broadening access to new information to meet future needs and challenges," King said.
The proposed investment in Afimilk will do both.
“It will help ensure LIC’s on-going access to pastoral dairy farming data through the increased use of in-line milk meters and animal monitoring systems such as collars.
“We believe there are likely to be further development opportunities for in-line milk meters, to increase LIC’s resilience to the threat of disruption to access to pastoral dairy farming data posed as a result of the move away from traditional herd-testing services."