Viterra divesting its North American livestock feed operations to Hi-Pro Feeds; agreement includes six feed mills, one pre-mix manufacturing facility in Canada, six feed mills and one commodity blending site in the U.S.
February 15, 2012
– Viterra Inc. (TSX:VT) (ASX:VTA) ("Viterra") has entered into an agreement to divest its North American livestock feed operations to Hi-Pro Feeds LP ("Hi-Pro"). Hi-Pro is a newly formed entity owned by the existing management team of the livestock feed business and Birch Hill Equity Partners ("Birch Hill"). The agreement includes all of Viterra's North American feed assets. These assets include six feed mills and one pre-mix manufacturing facility in Canada, and six feed mills and a commodity blending site in the United States. Viterra's decision to divest its North American feed business was based on a strategic review process and does not include or affect its New Zealand feed assets.
"The processing segment is important to Viterra's vertically integrated business model as it allows us to generate additional margin on the core commodities we handle and provides diversification to our earnings," said Mayo Schmidt, President and CEO of Viterra. "The Company will continue to look for opportunities to grow its processing portfolio in industries where it can achieve scale and influence and this divestment will allow us to focus our capital on areas of greatest strategic impact. We are pleased that Hi-Pro intends to maintain continuity for the staff and customers of the livestock feed business going forward."
Daren Kennett, CEO of Hi-Pro, commented, "I look forward to continuing to provide our customers with the same high level of services and quality products through the existing team of knowledgeable staff and I am excited about the partnership with Birch Hill."
Canaccord Genuity is acting as financial advisor to Viterra while GMP Securities L.P. is acting as financial advisor to Hi-Pro.
Pending completion of customary closing conditions, including regulatory approvals, the transaction is expected to close during Viterra's second fiscal quarter.
Viterra provides premium quality ingredients to leading global food manufacturers. Headquartered in Canada, the global agri-business has operations across Canada, the United States, Australia, New Zealand and China, as well as a growing international presence that extends to offices in Japan, Singapore, Vietnam, Switzerland, Italy, Ukraine, Germany, Spain and India. Driven by an entrepreneurial spirit, Viterra operates three distinct business segments: Grain Handling and Marketing, Agri-products and Processing. Viterra's expertise, close relationships with producers and superior logistical assets allow the company to consistently meet the needs of the most discerning end-use customers, helping to fulfill nutritional needs around the world.
Hi-Pro is a newly formed entity created by the existing management of Viterra's North American livestock feed operations and Birch Hill. Birch Hill, with $2 billion in capital under management, 20 partner companies and 30 fully realized investments since 1994, is the leader in long-term value creation in the Canadian mid-market.