SYMBOL: TSX: AGT
REGINA, Dec. 8 /CNW/ - Alliance Grain Traders (TSX: AGT) ("AGTI") is pleased to announce that it has entered into an exclusive, binding letter of intent to acquire all of the assets of Parent Seed Farms ("Parent Seed"), located in St. Joseph, Manitoba. The assets to be acquired include two processing plants, with approximately 51,000 sq. ft of bagged storage and approximately 15,000 MT of bulk product storage, and certain land and equipment. The purchase price for the acquisition is Cdn$10 million, payable as to Cdn$9 million in cash and Cdn$1 million in AGTI common shares.
Completion of the transaction is subject to a number of conditions, including certain due diligence, the receipt of all necessary regulatory and stock exchange approvals and other customary closing conditions. Following the entry of the binding letter of intent, the parties intend to negotiate the terms of a definitive acquisition agreement. The transaction is currently scheduled to close on or about January 4, 2010. All of the staff and management team will remain with Alliance's new Manitoba Bean Division.
"With nearly four decades in the Manitoba agriculture market, Parent Seeds bolsters Alliance's processing capacity for our newly emerging dry edible bean platform. The Red River Valley area is an excellent location for us to source and process navy beans, pinto beans, black beans and coloured beans to serve our customers in North America and globally. Parent Seed is an established, high quality processor and shipper of beans, pulses and specialty crops, with an excellent reputation. This is a strategic "tuck-in" acquisition for us that immediately establishes AGTI as a player in the North American bean industry," commented Murad Al-Katib, President and CEO of Alliance Grain Traders Inc.
AGTI is a corporation which derives its income from the operations of its operating subsidiary, Alliance Pulse Processors Inc. ("Alliance"). Alliance, on its own and through its subsidiaries, is engaged in the business of sourcing and processing (cleaning, splitting, sorting and bagging) specialty crops, primarily for export markets. Alliance and its subsidiaries in Canada, U.S. and Australia handle the full range of pulses and specialty crops including lentils, peas, chickpeas, beans and canary seed through six processing plants. The recent acquisition of the Arbel Group brings to Alliance, state-of-the-art processing and production facilities in Mersin, Turkey. The Arbel Group has a 50-year operating history and has grown to become a leading processor of lentils and grains and the largest exporter of pulses in Turkey. In 2002, the Arbel Group expanded its operations to include the production of pasta and has quickly grown to become the third largest pasta producer in the country. Turkey is the second largest exporter of pasta in the world after Italy and the Arbel Group is the top exporter of pasta in Turkey.
Parent Seed Farms Profile
Parent Seed Farms is located at St. Joseph Manitoba, approximately 100 km south of Winnipeg. The company is a processor of beans, pulses and specialty crops for over 35 years. With a strong focus on quality through its HAACP and ISO certifications and state-of-the-art processing plants, the company is a trusted marketing and distribution channel for Manitoba producers and its client's worldwide. Its products include the full range of dry edible beans including black, pinto, navy, cranberry and red beans. Parent Seed is established as a premium supplier to canners, packagers and retailers in North America and abroad.
Certain statements in this press release are forward-looking statements. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by AGTI at the time of preparation, may prove to be incorrect. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of AGTI (including its operating subsidiaries) to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the actual results of harvests, fluctuations in the price of lentils and other crops, failure of plant, equipment or processes to operate as anticipated, accidents or labour disputes, risks relating to the integration of acquisitions or to international operations, as well as those factors referred to in the section entitled "Risk Factors" in the prospectus of AGTI's predecessor, Alliance Grain Traders Income Fund, dated July 16, 2009 which is available on SEDAR at www.sedar.com, and which should be reviewed in conjunction with this document. Although AGTI has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. AGTI expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.
Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
SOURCE AGT Food and Ingredients Inc.
For further information: For further information: Investor Relations, Omer Al-Katib, (306) 244-1318, email@example.com