Crop storage and handling equipment manufacturer Westeel is being sold to Ag Growth International Inc. as part of a three-party deal.
Vicwest Inc., the parent company of Westeel, has agreed to be acquired by Kingspan Group for C$350 million. As part of the deal, Kingspan will sell Vicwest’s Westeel division to AGI for $221.5 million.
“Given the evolution of both businesses into new product lines and markets, the Board of Directors of Vicwest concluded that operating a construction business and agricultural business under one umbrella is no longer the ideal structure for the long-term,” said Colin Osborn, president and CEO of Oakville, Ontario-based Vicwest.
Westeel’s product catalogue complements AGI’s existing grain handling lines, noted AGI’s president and CEO Gary Anderson.
“AGI’s vision is to become the global market leader in grain handling, storage and conditioning solutions. Today’s acquisition will add an iconic Canadian brand of grain storage to AGI’s already impressive stable of leading manufacturers of grain handling and conditioning equipment, including Westfield, Hi Roller, Tramco and Batco,” he said in a statement on Tuesday.
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Products made by Westeel that are not currently part of AGI’s catalogue include smoothwall bins, hopper cones and commercial hopper-bottom bins. The company says Westeel’s focus on markets in Europe, Middle East/North Africa and India also complements AGI’s focus on Eastern Europe, Latin America and Southeast Asia/Australia.
The Westeel purchase price reflects enterprise value of around $210 million, as well as $11.5 million for assets that will be acquired by AGI, including net cash and a facility in Regina, Saskatchewan that is currently for sale.
Both Westeel and AGI are headquartered in Winnipeg, Manitoba.
The sale is still subject to various conditions, including approval from two-thirds of Vicwest’s shareholders. It’s expected to close in the first quarter of 2015.