Acquisition of one of the U.S.'s largest bean processors more than
doubles dry bean capacity
Purchase of sunflower processing assets adds dehulling capability
WINNIPEG, Feb. 15, 2012 /CNW/ - Legumex Walker Inc. (TSX: LWP) today
announced two acquisitions. The first acquisition is Minnesota-based
St. Hilaire Seed Company, one of the largest dry bean processors in the
United States. The Company paid USD$12,000,000 in cash and stock for
100 percent of the business of St. Hilaire, including approximately
USD$3.5 million in net working capital, and refinanced approximately
USD$2.5 million in St. Hilaire long-term debt. The 2011 Adjusted EBITDA
of St. Hilaire Seeds was approximately USD$3.7 million.
The second acquisition includes sunflower seed processing assets
previously owned by Anderson Seed Company, consisting of a processing
facility in Mentor, MN and two receiving stations in North Dakota, for
USD$4.8 million. The sunflower seed processing facility has a
production capacity of approximately 40,000 MT per year and the
receiving stations have a combined storage capacity of 13,000 MT.
The two acquisitions significantly strengthen the Company's position in
the North American special crop industry with an increased focus on dry
beans and dehulled sunflower seeds.
The Company anticipates the acquisitions will be immediately accretive
to earnings per share, excluding synergies.
"This acquisition is a significant event for our Company," said Joel
Horn, president and CEO of Legumex Walker. "St. Hilaire materially
increases the contribution from dry beans in our product mix. It also
diversifies our dry bean sourcing and processing through expansion into
the American Midwest. The sunflower seed facilities offer us an
attractive opportunity to expand the scope of our sunflower seed
"This transaction fits extremely well with our strategic objectives,"
Horn continued. "It fits our culture and it complements our existing
processing capability. It allows us to further expand and leverage our
global sales and distribution network with well-established and
well-regarded brands. In addition, it brings us important new
relationships with grower communities in Minnesota, North Dakota and
St. Hilaire, founded in 1993, is a buyer and processor of pinto and
black turtle beans. It also processes dark red kidneys, great
northern, cranberry and small red beans. It employs approximately 35
people and the Company expects substantially all of them, including the
current management team, to remain with the Company. The St. Hilaire
processing plant adds 45,000 MT of capacity, more than doubling Legumex
Walker's dry bean capacity. St. Hilaire also owns six receiving
facilities in North Dakota (5) and Minnesota (1) with a combined
storage capacity of 40,000 MT.
The Company has formed a new division - Legumex Walker Sunflower, LLC -
which will commence sunflower seed processing after the facilities
acquired from Anderson Seed are transitioned and staffed. The Company
expects to employ approximately 25 employees to operate its new
division and expects that nearly all of those hired will come from the
"We have deep experience in sunflower seed processing that will serve us
well in this venture," said Horn. "Our new sunflower processing
facility is in excellent condition and we think there's a great
workforce in the Mentor area that we can quickly recruit to staff our
new operations. We're pleased to be expanding into this region of the
United States and to become a contributing part of the local economy."
The cash portion of the combined transaction was funded with $12.2
million from a credit facility with HSBC Bank Canada and the Company
was advised by Cormark Securities Inc. All required governmental and
regulatory approvals have been obtained and all material closing
conditions have been satisfied.
About Legumex Walker Inc.
Legumex Walker is a growth-oriented processor and merchandiser of pulses
(lentils, peas, beans and chickpeas), other special crops and canola
products. The Company is one of the largest processors of pulses and
other special crops in Canada, with 11 processing facilities
strategically located in key growing regions in the Canadian Prairie
Provinces and American Midwest, a global sales, logistics and
distribution platform and access to multimodal transportation
capabilities. In addition the Company has an 85 percent interest in
Pacific Coast Canola, LLC, a company that is constructing a canola
oilseed processing facility in Washington State.
This press release contains "forward-looking information" within the meaning of Canadian securities laws,
which may include, but are not limited to statements relating to the
acquisition of St. Hilaire Seed Company and certain assets of Anderson
Seed Company, the Company's plans for those acquisitions, its
expectations for the performance of those acquisitions, the impact of
those acquisitions on the overall performance of the Company and on
financial results for future periods. Such forward-looking information reflects the Company's views with respect to future
events and is subject to risks, uncertainties and assumptions,
including (i) risks associated with the integration of the operations
of St Hilaire and the Mentor MN facility with the Company's current
operations and those set out in the final prospectus of Legumex Walker
dated June 30, 2011 available on sedar.com, and (ii) the assumption
that future results from the operations acquired will be consistent
with results from prior periods. The Company does not undertake to
update forward-looking statements or forward-looking information, except as required by law.
SOURCE Legumex Walker Inc.
For further information:
Manager of Investor Relations - Legumex Walker Inc.
(416) 815-0700 ext. 257