Canada’s second-largest grain company has sealed its deal to buy an independent grain terminal and ag input business in eastern Saskatchewan, with the blessing of its farmer owners.
Richardson International announced Tuesday it has “successfully completed” the purchase of North East Terminal, including its inland terminal at Wadena, about 200 km east of Saskatoon, and crop input facilities at Wadena, Kelvington, Foam Lake and Ponass Lake.
“We are pleased that a large majority of shareholders voted in favour of the sale and we look forward to operating these facilities while enhancing services in the near future,” Darwin Sobkow, vice-president of agribusiness operations for Winnipeg-based Richardson, said in a release.
Those shareholders included Canada’s third-biggest grain handler, Cargill, which had owned 5,900 Class D shares in NET and had a 25-year grain handling agreement with the Wadena company through November 2017.
When the sale agreement was reached with Richardson, NET and Cargill reached a separate settlement agreement in which Cargill would vote its shares in line with the wishes of NET’s voting Class A, B and C shareholders — mostly farmers in the region.
According to NET, if other shareholders voted in favour of the Richardson offer, Cargill would then end its handling agreement and other business arrangements with NET, he said. Financial terms of Cargill’s settlement agreement were not disclosed.
Privately-held Richardson didn’t mention NET’s sale price in its release but NET previously confirmed it as $25 million. Richardson has also pledged $3 million in upgrades and enhancements at the NET sites.
Those improvements, the buyer said, are expected to “improve safety, increase efficiencies and better serve customers.”
NET, Sobkow said Tuesday, “will support (Richardson’s) export sales program and complement our new canola processing plant” at Yorkton, Sask., about 140 km southeast of Wadena.
Richardson added it “will continue to look for opportunities to provide greater service to our customers in northeastern Saskatchewan.”
NET has said it opted to reach an agreement with Richardson after an unnamed third party made moves toward an unsolicited takeover bid for the Wadena company.
NET was formed in 1989 to build the Wadena terminal, which opened in late 1992. The terminal includes a 13,700-tonne capacity workhouse, 11,600 tonnes of grain condo storage space, a 13,000-tonne capacity bulk grain bin, exterior storage, drying and cleaning facilities and a 59-car rail siding with access to both CN and CP rail lines.
In its fiscal year ending July 31, 2010, NET booked $994,094 in profit on $35.33 million in sales and other revenue, up from $268,025 on $44.27 million in the year-earlier period.
Current NET staff will be offered the opportunity to join Richardson, the company said previously.