The Winnipeg parent firm for grain bin, auger and conveyor brands such as Westeel, Twister, Westfield, Wheatheart and Batco has bought its way into the grain dryer and stationary grain handling businesses.
Ag Growth International (AGI) announced Tuesday it has bought up all shares in a Nebraska-based competitor, Global Industries, for US$100 million — a deal it expects to be “immediately accretive” with “significant synergy opportunities.”
Global, which operates mainly out of plants in Nebraska and Kansas, makes and markets Hutchinson and Mayrath augers and conveyors, MFS, York, Stormor and Brownie bins and handling equipment and Sentinel building systems.
AGI also expects to bring Global’s Omaha-based mixed-flow grain dryer, aeration and handling equipment business, which operates under the Neco brand, to the Canadian Prairie market.
AGI on Tuesday said the Neco business marks a “new product line” for the Winnipeg firm and will become “an important addition to AGI’s Canadian product offering, especially in light of management’s anticipation of increased acres of corn and soybeans in Western Canada.”
Offshore, AGI added, it has previously bought dryers from third parties when selling bundled projects, and now expects to include Global dryers in some of these projects going forward.
Global’s grain bin businesses, AGI said, are “primarily” in the U.S. Great Plains region and will have “minimal geographic overlap” with AGI’s Westeel line, but those businesses’ stationary on-farm grain handling equipment lines will be “a new addition to AGI’s product portfolio,” the company said.
Global’s stationary equipment business also gives AGI “access to new dealers and customers that are not currently addressed by AGI’s core portable grain handling offering,” the company said.
Global’s Kansas-based Hutchinson and Mayrath businesses deal mainly in bin unloading systems, AGI said, but also include grain loop products, which allow connection of several bins into one storage system and will also be a “new addition to AGI’s product portfolio.”
AGI CEO Tim Close on Tuesday described the deal for Global as a “highly strategic transaction” which will bring “key products, very talented people, and great brands into the AGI group, and significantly increases our U.S. manufacturing capabilities and distribution channels.”
The U.S. grain market, he said, “continues to be a core supplier of the world’s food and AGI is committed to our dealers and customers in this important market.”
Global’s brands in “key” U.S. markets are expected both to expand AGI’s existing product lines and to add new product categories, but also to provide “additional scale to compete against large, global peers in an environment of industry consolidation,” AGI said.
Offshore, AGI added, Global’s customer and geographic focus in offshore markets — which make up about 27 per cent of Global’s sales — is “largely complementary,” making for “potential sales synergies and an enhanced global footprint.”
“It was a very difficult decision for me to decide to sell Global Industries,” Global CEO Jack Henry said in AGI’s release Tuesday. “However, the culture and the way AGI does business were a great fit for Global and I’m very excited for Global’s future prospects as part of AGI.” — AGCanada.com Network