News last update:6 Aug 2012

Viterra penetrates into US feed milling

Viterra, Canada's biggest grain company is continuing its expansion into the southern US feed milling industry.

Viterra Inc. said that Unifeed Hi-Pro Inc., a wholly owned subsidiary of Viterra doing business as Hi-Pro Feeds, has signed a definitive purchase and sale agreement for certain assets of Gore Bros., Inc. and Gore's Trucking, Inc. in the US.

The companies, run by the Gore family of Texas for about 60 years, will sell their feed mills at Clovis, N.M., about 175 km northeast of Roswell, and at Comanche, Tex., about 250 km southwest of Dallas. The deal does not include the Gores' retail outlets.

Funded through current operating cash flows, the total cost of the transaction is approximately US$24.2 million including working capital.

The Regina, Saskatchewan grain company said it expects the EBITDA (earnings before income, taxes, depreciation and amortization) of its livestock feed and services division to rise by about 20 per cent through this deal, "after synergies." Hi-Pro already runs several mills in Texas, New Mexico and Oklahoma.

Formed through the combination of Saskatchewan Wheat Pool and Agricore United on May 29, 2007, Viterra is Canada's leading agri-business, with expected annual sales of approximately $4 billion. The company has extensive operations and distribution capabilities across Western Canada, and with operations in the United States and Japan.

The new company is diversified into sales and services of crop inputs and equipment, grain handling and marketing, livestock feed and services, agri-food processing and financial products. These operations are complemented by value-added businesses and strategic alliances which allow Viterra to leverage its pivotal position between Prairie farmers and destination customers.

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