Input Capital — the publicly-traded company based in Saskatchewan that offers canola growers “streaming” financing — has reached a deal to be acquired by Bridgeway National, a publicly-traded holding company headquartered in Washington, DC.
Input says the agreement will see shareholders receive cash consideration of $1.75 per share, representing an aggregate value of approximately $97.5 million.
“The combination of Bridgeway with its strong financial backers and Input creates a strong foundation to accelerate growth of Input’s innovative mortgage stream business,” says Eric Blue, chairman & CEO of Bridgeway, in a news release issued Wednesday. “We believe we can help scale this business to become a well-known financial solution provider to farmers in Canada, and potentially beyond.”
Launched in 2012, Input’s business model mainly involves offering marketing, mortgage, and capital streams of financing to western Canadian farms in exchange for future crop production — generally canola.
Input has been seeking a partner or buyer for over a year, as the company’s board conducted a strategic review process last year with the goal of seeking out a new source of capital. In the meantime, the company also paused deployment of additional capital.
“Shareholders will know that for the last 14 months, we have continued to search for a capital partner while focusing on growing book value per share. We are pleased to have met the team from Bridgeway and put together this proposed transaction that provides immediate liquidity and certainty of value that we believe to be in the best interest of all shareholders,” says Doug Emsley, Input Capital’s chair and CEO.
Input’s board of directors says it is unanimous in supporting the transaction, which is subject to approval of two-thirds of the votes cast by Input shareholders at a special meeting, which is slated to take place in September.
The deal is expected to close in October 2020, at which point Input Capital would be delisted from the TSX.
Input also reported its third quarter financials on Wednesday. The company says it generated revenue of $24.2 million on crop volume of just under 55 thousand metric tonnes in the 12 months ending June 30, 2020. That was down significantly from revenue of $46.6 million on nearly 96 thousand metric tonnes of canola in the previous year.
Adjusted net income for the third quarter was reported at $239 thousand. For the twelve months ending June 30, 2020, Input reported a net loss of $1.8 million.