- Slice of Agriculture
- Posts
- Farmland Partners Sells 46 Farms for $289 Million in Cash Deal
Farmland Partners Sells 46 Farms for $289 Million in Cash Deal
Slice of Agriculture Team
October 09, 2024
Key Highlights:
Farmland Partners Inc. (NYSE: FPI) sells 46 farms comprising 41,554 acres for $289 million.
Transaction set to close on October 16, 2024, following satisfaction of closing conditions.
The sale includes a 21% gain over the aggregate net book value, totaling approximately $50 million.
Proceeds will be used to reduce debt by $140 million, buy back stock, and pursue acquisitions.
Farmland Reserve, Inc. to manage the properties and tenant relationships.
Source: Business Wire
Notable Quotes:
"Farmland is a ‘total return’ investment, with asset appreciation typically accounting for a majority of the overall return on invested capital. We are pleased to transition our long-standing tenant relationships to a high-quality institutional investor that values relationships as we do."
"We’re also gratified they saw us as the right buyer for these properties and the farmer tenant relationships that come with them."
Our Take:
The sale of 46 farms by Farmland Partners to Farmland Reserve represents a strategic move to unlock asset value, reduce debt, and position the company for future growth. The transaction’s 21% gain reflects the company's ability to capitalize on farmland appreciation, aligning with its total return investment thesis. By partnering with a respected institutional investor like Farmland Reserve, FPI ensures continuity for tenant farmers and strengthens its balance sheet, while preparing for potential special distributions to shareholders. This move could further highlight the undervalued nature of Farmland Partners’ stock and reinforce the company's role as a leader in North American farmland investments.