Canada's biggest processor and marketer of sunflowers and sunflower products expects to see otherwise-unavailable opportunities for growth through a friendly takeover.
Publicly traded special crops processor Legumex Walker of Winnipeg said Monday it's signed a letter of intent to buy all outstanding shares of Keystone Grain of Winkler, for an undisclosed sum.
Keystone, which launched in 1993 with one processing plant at Winkler, now operates two Winkler facilities specializing in sunflower and flax, plus a Winnipeg processing and packaging plant producing private-label wild bird feed for retailers and for the company's own bird feed brand, Emerald Farms.
Keystone's food-grade products include bakery sunflower kernels, confectionary sunflower kernels, milled and non-milled flax, buckwheat and hulled millet. The company also markets organic crops including flax, spelt corn, soybeans and wheat.
"Joining forces with Legumex Walker will allow us to take advantage of currently available growth opportunities we could not pursue on our own," Keystone president Don Falk said in a release Monday.
"The addition of Keystone to Legumex Walker will create one of the largest suppliers of sunflower and flax products in North America with bakery ingredient sourcing and processing on both sides of the Canada/U.S. border -- a significant strategic advantage."
The two companies have already agreed to co-ordinate both product sales and sourcing of feedstock, pending completion of this deal.
The purchase of Keystone "significantly enhances our ability to service the growing demand for sunflower and flax products in the bakery ingredients market," Legumex CEO Joel Horn said in the same release.
"Available processing capacity at our existing sunflower facilities will allow us to capitalize on meaningful growth opportunities inherent in the Keystone business. In addition, Keystone's business will further diversify our product offerings through entry into the retail bird food market, as well as provide cross-selling opportunities for our respective merchandising teams."
The deal is expected to close next month and to accrue to 2013 earnings, Horn said, "exclusive of any potential synergies that may be realized."
Prairie sunflowers flourishing despite heat, pests, Aug. 15, 2012
Roy Legumex, Walker Seeds merge, prepare IPO, June 8, 2011