Ridley Corporation Ltd has entered into binding agreements to acquire Incitec Pivot Fertilisers’ (IPF) distribution business from Dyno Nobel Limited for A$300 million. The transaction excludes manufacturing operations and legacy liabilities but includes a strategic supply agreement for urea and an option to purchase the Geelong North Shore property for A$75 million. The acquisition will be funded through a combination of new debt, a fully underwritten A$125 million equity raise, and A$50 million in vendor notes.
The acquisition is expected to deliver over 25% earnings per share accretion by FY26 (pro forma, post-synergies) and establishes a fourth strategic growth pillar for Ridley as it evolves into a leading diversified Australian agricultural services provider.
“The proposed acquisition represents a unique opportunity to add Australia’s number one distributor of fertilisers to Ridley’s market leading positions in the provision of animal nutrition products and services, Ridley chairman Mick McMahon said.
"The opportunity arises following Ridley’s strong financial performance over recent years and represents a further opportunity to invest in the continued growth of Australian agriculture. The Ridley and Incitec Pivot brands and distribution networks share a rich heritage at the heart of Australian agriculture and our regional communities, and the proposed combination will only strengthen this for the benefit of our customers, communities, employees and investors”.
Transaction structure and conditions
Ridley will acquire 100% of the IPF Distribution business on a cash-free, debt-free basis. Exclusions include the Phosphate Hill manufacturing operations and liabilities related to Gibson Island and Geelong. Ridley has also secured a future supply of 700,000 tonnes of urea annually from the Perdaman plant, due to start in 2028.
Ridley has agreed to lease and potentially acquire the Geelong North Shore property for A$75 million, post-remediation. Completion of the acquisition is targeted for the third quarter of 2025 and is subject to customary conditions, including internal restructuring by Dyno Nobel and completion of a urea offtake agreement.
Strategic rationale
The acquisition supports Ridley’s strategy to diversify and grow its agricultural footprint. Key benefits include:
- Complementary footprint and customer base
- Enhanced scale and #1 market share in East Coast fertiliser distribution
- Synergy opportunities estimated at A$7 million per annum
- Increased portfolio breadth with diversified products and geographies.
Ridley aims to unlock further value post-separation from Dyno Nobel by improving operational focus and investing in market growth.
"This strategic acquisition positions Ridley as a leading diversified Australian agricultural services business and establishes a fourth pillar for growth. We see significant opportunity for the Incitec Pivot business by bringing focus, investment and leveraging complementary capabilities across the combined entity,” Ridley managing director and chief executive officer, Quinton Hildebrand, said.
Overview of IPF Distribution
IPF Distribution is Australia’s largest fertiliser distributor, holding a 46% market share on the East Coast and distributing 2.2 million tonnes in FY24. It operates 13 major distribution centres, seven regional service sites, and three Easy Liquid sites, with balanced exposure across four states.
The business provides a wide range of fertilisers, including urea, MAP/DAP, and specialty blends, and is supported by exclusive offerings such as Nutrient Advantage and Precision Ag services. FY24 EBITDA totalled A$86 million.
Transitioning supply model
While Ridley will maintain short-term access to MAP/DAP via Phosphate Hill, the facility is under strategic review and may cease operations after September 2026. Geelong’s SSP production is also being phased out, with closure by December 2025. Ridley expects any financial impacts to be modest and manageable.
Funding mix and equity raise
Ridley’s funding package comprises:
- A$350 million revolving debt facility (replacing A$150 million facility)
- A$300 million working capital facility
- Fully underwritten A$125 million equity raising at A$2.12/share
- A$50 million in Vendor Notes to Dyno Nobel (treated as equity)
The equity raise includes a A$90 million entitlement offer and A$35 million placement. AGR Agricultural Investments LLC, Ridley’s largest shareholder, has committed to taking up its full entitlement.
Capital raising details and timetable
New shares will be issued at a 9% discount to Ridley’s last close and will represent 18.7% of current shares on issue. The entitlement offer opens on May 19, 2025 and closes May 30, 2025, with settlement and trading of new shares beginning in early June.
The placement component, targeting sophisticated investors, is scheduled for completion on May 12, 2025.