Canada’s biggest Deere dealership group has sold its minority stake in a Prairie dealership chain back to the chain’s majority owners.
Calgary-based Cervus Equipment Corp. said Wednesday it has sold its 21.449 per cent of Maple Farms Partnership, owner of the Maple Farm Equipment chain of Deere farm equipment dealerships, back to Maple for about $9.1 million.
Maple Farm Equipment operates sites at Yorkton, Moosomin, Preeceville, Foam Lake, Wynyard and Balcarres in eastern Saskatchewan and Russell in western Manitoba, selling new and used equipment from Deere as well as Bobcat, Bourgault, Brandt, Degelman, Seedmaster and other brands.
Cervus first bought into Maple Farms in late 2009 with a 20 per cent stake and merged its own dealership operations at Russell and Moosomin into the Maple Farm Equipment businesses there.
The deal also calls for Cervus, which owns the land and buildings on which Maple operates one of its Deere dealerships, to sell those assets separately to Maple for about $1.7 million.
Publicly-traded Cervus said Wednesday it plans to use net proceeds from the sale to reduce its borrowings.
“Our intention is to invest our capital where we can realize operational synergies to directly and positively impact markets through our influence or control of dealership operations,” Cervus CEO Graham Drake said in the company’s release.
Cervus’ decision to sell “was made with much consideration and discussion with our partners,” he said.
Cervus’ chain now includes 66 sites in Canada, New Zealand and Australia, including 20 Deere dealerships in Alberta, Saskatchewan and British Columbia. Apart from Deere, the company also deals in Peterbilt, Bobcat and JCB equipment, among other brands.
Cervus on Wednesday also said it has completed a previously announced plan to sell land and buildings where it operates 11 dealerships and will lease back those properties. From these sales the company expects to generate net free cash flow of about $27 million. –– AGCanada.com Network