News 249 views last update:6 Aug 2012

Toronto firm takes major stake in Ridley

The Australian parent of Winnipeg feed manufacturer Ridley Inc. has sold its controlling stake in the feed company to a Toronto financial services firm.

Fairfax Financial Holdings said in a release that has bought 9.53 million shares of Ridley Inc., for an aggregate price of about CAN $81 million, to Ridley's Australian parent company, Ridley Co. Ltd.
The deal, which gives Fairfax a 69% controlling interest in Ridley Inc., is expected to be sealed by Oct. 20, Ridley said in a separate release last week. Fairfax did not previously own any Ridley shares.

The deal between Ridley Australia and Fairfax is a private sale, Ridley Inc. said in its release, and "no offer will be made to Ridley shareholders generally."

Fairfax noted in its release that "the shares are being purchased for investment purposes and Fairfax may acquire additional shares from time to time in accordance with applicable laws."

Under the terms of the deal, Ridley Inc. will separate its joint credit facility and insurance policies from the Australian firm, and will also continue to operate under the name Ridley Inc.

Ridley Inc., whose brands include FeedRite, Ridley, Hubbard Feeds and Sweetlix, maintains head office operations both in Winnipeg and in Mankato, Minnesota., southwest of Minneapolis.
Ridley Australia announced in May that it wanted to put its stake in the Canadian company up for sale."We are more resolutely focused than ever on improving shareholder returns and will continue to implement our strategy to achieve this," said John Keniry, Ridley's chairman.

Operating results this year were in line with expectations at AUS $26.8 million compared to last year's AUS $25.7 million. However, after one-off items of AUS $16.3 million, the profit was reduced to AUS $10.5 million compared to last year's AUS $22.7 million.

Significant items included costs associated with the Canadian legal settlement, the corporate and operational restructure following the strategic review and closure of plants in Australia and Canada, and the defence of Graincorp's hostile takeover bid. Ridley Agriproducts' earnings declined by 18% as a result of reduced demand, primarily in the beef and sheep sectors, and losses in the northern mills operations and supplements business.

Ridley Inc in North America increased earnings by 54% in US dollar terms and 34% in Australian dollars.

Related website:

Subscribe here to the free animal feed newsletter

Editor AllAboutFeed

Or register to be able to comment.