No doubt a lot of the Synlait Ltd / Farms shareholders are thru and thru classic kiwi dairy farmers who bought into the equity partnership model when Synlait was just 4 or 5 separate large scale irrigated Canterbury dairy farms ( one of them called Robindale was alone milking 3100 cows ). Many of them were diversifying from their own un-irrigated Waikato farms. In a dozen years they have abandoned Fonterra, built $250m worth of stainless steel including the best infant formula plant in the southern hemisphere, a consumer products business selling to all four corners of the globe with three major shareholders from Holland,China & Japan , and now have a stake in a corporate dairy farming venture with 5000ha and 15,000 cows. Huge change and a far cry from their initial investment thesis !! and many will be more comfortable with the farming side of their investment , Synlait Milk has been a huge dollop of cream on the cake ( pun intended ! ) which has been a spectacular success. Many will have sold enough SM to recoup their whole initial investment , and still have a stake in Farms and Milk worth hundreds of thousands of dollars.
I invested in a single Synlait managed farm in 2003 , and on 23 July at $2.20 for SML and assuming Farms is trading at $1.25 will have sold enough shares in each to have returned 1.5 times my initial stake ( $400,000 ) and our remaining holding combined in both will be worth $690,000. It's been a great ride, with quite a few bumps in the road ( 2008/9 ) but a real fun journey. Hopefully the Synlait Milk story is in its infancy and we will keep a decent slug of those for many years.