RLF Agtech falls on cap raise for LiquaForce acquisition

WA farming innovations company RLF Agtech Ltd (ASX:RLF) has seen its shares plunge nearly 6 per cent to 6.5 cents, after announcing it’s raising $3 million at 6 cents to buy the assets of a family-owned Queensland fertiliser business in a $4.5 million deal.

The acquisition of LiquaForce will cost $3 million cash and $0.75 million scrip, payable on completion, as well as $0.75m cash to be paid by September 30. It will be funded through the capital raising and a $2.9 million loan. The company has secured $1.89 million through a Placement and a Share Purchase Plan opens on May 10.

RLF Agtech has sought to achieve a ‘complete plant nutrition solution for Australian agriculture’, which it claims is the reason for its acquisition of LiquaForce Pty Ltd through a binding Business Sale Deed. LiquaForce has two manufacturing hubs in Ingham and Mackay in northern Queensland and has focussed on the sugar cane industry.

The acquisition will be through RLF’s subsidiary, RLF QLD Pty Ltd, and is set to be complete before the end of the quarter.

RLF Agritech managing director and CEO Ken Hancock said the acquisition would not only boost his company’s growth strategy, but shift its source of revenue from Asia to Australia.

“The Acquisition enables growers to benefit from the comprehensive range of RLF and LiquaForce plant nutrition products that cover the entire plant growth cycle to enhance yields, improve crop health and achieve better financial returns,” he said.

“Furthermore, the acquisition will considerably increase and diversify RLF’s revenue, which has been mainly generated from Asia.

“Post-completion, the Company expects approximately 60 percent of its revenue to be generated from Australia, greatly diversifying and reducing the risk of relying on revenue from one geographical region.”