MELBOURNE: Ridley Corporation Limited (ASX: RIC) announced Monday it has entered into a binding agreement to acquire Dyno Nobel Limited’s fertilizer distribution business, IPF Distribution, for $300 million. The deal includes put/call options to acquire the Geelong North Shore property for an additional $75 million.
The acquisition excludes Dyno Nobel’s Phosphate Hill fertilizer manufacturing operations and the closure costs for Gibson Island and Geelong manufacturing sites. Ridley also secured a long-term supply agreement for at least 700,000 tonnes of urea annually from the Perdaman Chemicals and Fertilisers plant, expected to commence operations by 2028.
IPF Distribution, Australia’s largest fertilizer distributor with a 46% market share on the East Coast, will become a new growth pillar for Ridley, enhancing its position as a diversified agricultural services company. The deal is projected to be 25%+ earnings per share (EPS) accretive in fiscal year 2026, including synergies.
Funding and Equity Raise
To finance the acquisition, Ridley will raise $125 million through a fully underwritten equity offering, including a $90 million entitlement offer and a $35 million institutional placement. The company’s largest shareholder, AGR Agricultural Investments LLC (19.4% stake), has committed to taking up its full entitlement.
Ridley will also issue $50 million in vendor notes to Dyno Nobel and replace its existing $150 million debt facility with a new $350 million revolving facility. Pro forma leverage is expected to be 1.3x as of June 30, 2025.
“This acquisition aligns with Ridley’s core strengths in commodity risk management and logistics,” said CEO Quinton Hildebrand. “It diversifies our portfolio and strengthens our customer relationships.”
IPF Distribution operates 13 primary distribution centers and reported $86 million in EBITDA for fiscal year 2024. Synergies of $7 million annually are anticipated from back-office consolidation.
The transaction is expected to close by the third quarter of 2025, pending regulatory approvals and restructuring conditions. Ridley shares will remain in a trading halt until Tuesday, May 13, pending the equity raise.