On the Street: Viterra Buys 21st Century
May 27/Calgary, Alberta/Marketwire -- Viterra Inc. signed a definitive agreement to acquire 21st Century Grain Processing for an all-cash purchase price of $90.5 million, subject to adjustments for debt, cash and working capital levels at the time of closing.
21st Century Grain Processing operates two plants in the central U.S., an oat mill in South Sioux City, Neb., and a facility that mills wheat near Amarillo, Texas.
"We are pleased to have reached this agreement with 21st Century Grain Processing, which has established an excellent reputation in the industry for providing healthy, high-quality, grain-based food ingredients. Its operational focus aligns well with our processing segment, creating opportunities to better serve our customers by optimizing our logistics and realizing production efficiencies. Further, it will position our company to better compete in this industry and meet the continued growth in demand for healthy food products in North America," said Karl Gerrand, Viterra's senior vice president, Processing.
Lynn Rundle, CEO of 21st Century Grain Processing, added, "We are very excited to have this opportunity to bring together the operational capabilities and product offerings of our two companies. With Viterra's strengths and commitment to our industry, this transaction will position us well to continue our growth and success over the long term."
The facility in Nebraska has a storage capacity of 4 million bushels and can process up to 295 metric tons of commercial oat products per day. In addition the facility manufactures coated grains and clusters used in foods such as granola bars and ready-to-eat breakfast cereals and snack foods. The wheat milling facility in Texas has a storage capacity of 3 million bushels and can process up to 225 metric tons of flour per day, and produces products such as whole wheat, bakery and tortilla flour.
The transaction aligns with Viterra's integrated business model, the company noted, and "reinforces the company's mission to leverage its expertise and existing core capabilities to supply its value-added processing operations - strengthening the connections between field and table." Under the combination, 21st Century Grain's Processing facilities in the U.S. will benefit from Viterra's existing oat milling operations and grain origination network in Canada.
"An important benefit of this combination will be our ability to deepen our relationships with customers and more effectively deliver innovative customized ingredients to them. We look forward to working with 21st Century Grain Processing to further those relationships with customers they serve in North America and throughout the world," said Gerrand.
The transaction is conditional upon expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and other customary closing conditions.
From the June 7, 2010, Prepared Foods E-dition