Countrywide Farmers has clarified details of its acquisition of Cornwall Farmers’ trading activities (ATN August 28th).
The company has bought the entire Cornwall Farmers trading business through the £6.05 million deal – Cornwall Farmers now has no ongoing trading activities, whether in rural retailing or the distribution of bulk inputs such as feed, fertiliser and seed. Sale proceeds with be used to reduce borrowings.
The Cornwall Farmers co-operative will retain the freeholds of the eight stores it owns out of the chain of twelve outlets it was operating before the take-over. These eight properties will be let to Countrywide on long-term lease agreements. Cornwall Farmers will administer the rental income from these stores, with the revenue stream servicing remaining debt and the liabilities to the co-operative’s defined benefit pension scheme.
Co-operative members will continue to own shares in Cornwall Farmers, which aims to be in a position to recommence distributions to members in the longer term once remaining debt and ‘substantial’ pension obligations are paid off.
Countrywide is already an agent for ForFarmers feed products, and so could supply bulk feed to former Cornwall Farmers accounts through this arrangement. In June 2012, Cornwall Farmers moved the manufacture of its Pinnacle Feeds brand from the BOCM Pauls /ForFarmers mill at Exeter to Holsworthy, Devon-based Harpers Home Mix, itself acquired by Massey Bros earlier that year. The Exeter feed volume had been sourced through Countrywide to obtain better terms.
Countrywide says it will be discussing the respective current feed supply and provision of crop protection products and agronomic advice to Cornwall Farmers members with Massey Bros and Hutchinsons.
As far as the retail outlets are concerned, Countrywide Farmers intends to use both the Cornwall Farmers and Countrywide brands in association across all 12 stores. It owns both brands, and can leverage the strength of the Countrywide name and scale with the local heritage of Cornwall Farmers.
The future of the Patch & Acre store brand format that was being rolled out across the Cornwall Farmers stores with the help of Regional Grant funding is less clear. A Countrywide spokesman says the grant funding was linked to the creation and protection of jobs, and Cornwall Farmers employees will transfer to Countrywide as part of the acquisition, subject to regulatory consultation. In addition, the Patch & Acre investment had improved the estate and the customer experience, so raising their rental income potential.