Canadian feed makers Masterfeeds and Ridley will merge their respective commercial livestock and poultry feed and nutrition businesses in Canada into a new entity called Masterfeeds LP.
The combination of Masterfeeds and Ridley's Canadian feed business, which operates as Feed-Rite, will create the second largest feed provider in Canada.
The new entity will operate, among other things, 22 feed manufacturing plants and employ over 500 people in a business spanning across Quebec, Ontario and the Prairie Provinces.
Masterfeeds LP will be headquartered in London, Ontario and led by current Masterfeeds Chief Executive Officer, Rob Flack.
"Masterfeeds and Feed-Rite are two of the most respected brand names in Canadian animal agriculture," said Flack.
"We are excited about bringing the strengths of both companies together. As the feed industry evolves, we expect there to be more opportunities for Masterfeeds LP to grow in the future," he adds.
Assets for shares
Each of Masterfeeds and Ridley will contribute essentially all of their Canadian feed operating assets in exchange for relative shareholdings in Masterfeeds LP.
That transfer is expected to result in no material impact overall to Ridley's balance sheet, nor is it expected to have any material effect on the structure or other operations of Ridley Inc.
Completion of the merger is expected to take 30-45 days and is subject to the execution of definitive agreements and normal conditions including regulatory approvals.
Masterfeeds has a 83-year history and is headquartered in London, Ontario, and a wholly-owned subsidiary of Ag Processing (AGP), headquartered in Omaha, Nebraska, which is a farmer-owned cooperative engaged in the procurement, processing, marketing and transportation of grains and grain products.
AGP acquired Masterfeeds in 1991 and is owned by 175 local cooperatives representing over 250,000 farmers throughout the Midwest, and five regional cooperatives representing farmers throughout the US and Canada.
Ridley, headquartered in Mankato, Minnesota and Winnipeg, Manitoba, is one of North America's leading commercial animal nutrition companies.
Ridley manufactures and distributes a full range of animal nutrition products under a number of well-known trade names.
Ridley's Canadian feed business, operating under the trade name Feed-Rite, is reported in Ridley's financial statements as the Canadian Feed Operations segment.
Privately owned Masterfeeds has an estimated revenue of about $175 million and publicly listed Ridley reported a revenue of US$649.5 million for the 2011/2012 marketing year.