Listed PGG-Wrightson is restructuring its business divisions into two groups, possibly laying the foundation for a spin-off company float or sale in the future, according to brokers.
PGGW has this week announced a "realignment" of its business structure, aimed at "unlocking value for investors" while strengthening its services to farmers, growers and other partners.
In a statement, PGGW managing director Tim Miles said the realignment was based on realising the full value of the underlying businesses.
"The seeds business, for instance, has a different growth pattern and much more predictable earnings than traditional rural supplies or livestock businesses," he said.
After the restructuring, the first new group will be the AgriServices division, encompassing rural supplies, fruit, livestock, irrigation and pumping, Agriculture New Zealand, finance, real estate and insurance.
The second group will be the AgriTech division, of seeds and the grain and nutrition businesses in New Zealand, Australia and South America.
Craigs Investment Partners broker Peter McIntyre said the seeds division was "the jewel in the crown" for PGGW; given the growing global demand for increasing crop production.
"This AgriTech division, which includes seeds, will be well placed to meet demand.
Not what New Zealand produces; but in the export of seeds and the technology involved with the new cultivars," Mr McIntyre said.
"This is the high-tech culture governments have wanted to see for years," he said.
Having the new divisions would provide a good measure between the two for PGGW and provide a focus on the future of its business units, he said.
"PGGW have created plenty of options; down the track there could be spin-offs [stock exchange listings] or the sale of some business units."
