REGINA, Oct. 5, 2015 /CNW/ - AGT Food and Ingredients Inc. (TSX:AGT) ("AGT") is pleased to announce the signing of a definitive share purchase agreement between AGT, its subsidiary, Alliance Pulse Processors Inc. and Mobil Capital Holdings Ltd. ("Mobil") to acquire the businesses of Mobil and its subsidiaries (the "Transaction"). The total purchase price of the Transaction is $57.5 million including the issuance of $19 million of common shares (the "Common Shares") in the capital of AGT (being 722,803 Common Shares) and a $19.5 million promissory note repayable in equal installments for a period of five years following the completion of the Transaction. The Transaction is subject to various closing conditions customary for transactions of this nature and AGT expects the Transaction to be completed in the fourth quarter of 2015.
"This is an exciting follow-on acquisition to our previously completed investment in bulk loading and handling assets of West Central Road and Rail announced in June 2015. Our North America legacy pulses business has been trending positively both on margin and asset utilization, warranting us to continue our investments in Canada, augmenting pulses capacity while adding the ability to solidify our durum wheat origination and supply chain for our growing pasta and bulgur wheat business. Rail transportation and loading infrastructure are essential elements to the competitiveness of our legacy segment, especially in the current global supply and demand environment. The ability to control our logistics chain with ownership of rail logistics assets and short line rail infrastructure and equipment servicing our handling assets, we feel, allows AGT to create a competitive advantage over time. Efficient transportation modes ensure the smooth movement of products, matching origination and production to demand and supply requirements from farm to customer. We feel we will continue to be very competitive in this way and this acquisition assists us in meeting this objective, allowing us to continue growing shareholder value with the growth of our business," said Mr. Murad Al-Katib, President and CEO of AGT.
Mobil is a private company which carries on the businesses of (i) the operation of a modular designed, moveable plant for processing agricultural commodities; (ii) the operation of short-line railways; (iii) bulk commodity transloading; and (iv) trading pulses and grains in the Provinces of Saskatchewan and Ontario by way of its subsidiaries: Mobil Grain Ltd. ("MGL"), 101115529 Saskatchewan Ltd., Big Sky Rail Corp., Mobilex Terminal Ltd. and Mobil Transloading Ltd.
AGT Food and Ingredients Inc. Profile
AGT is a processor of value-added pulses, staple foods and ingredients for export and domestic markets as well as a supplier of retail packaged and canned foods to retail and food service sectors. Through its offices and processing facilities located in some of the best agricultural growing regions in Canada, the U.S., Turkey, China, Australia and South Africa, merchandising and sales offices in the U.K., the Netherlands, Spain, Switzerland and India and origination offices in Russia, AGT produces a full range of pulses and specialty crops including lentils, peas, chickpeas, beans and canary seed as well as food ingredients such as pulse flours, proteins, starches and fibres. Through its subsidiaries in Turkey, the Arbel Group, AGT also produces staple foods such as Arbella Pasta, rice, and milled wheat products, including bulgur and semolina.
Mobil Capital Holdings Ltd. Profile
Mobil is a Saskatchewan based agricultural processor and exporter operating short-line railways from Regina to Saskatoon and from Saskatoon to the Alberta border linking agricultural production regions with central rail hubs in Saskatchewan's major cities. MGL's highly-automated, cost-effective, high-volume, modular grain processing plant has been bringing higher returns to producers since its introduction in 2005. MGL has evolved into an integrated, rail-based grain company utilizing grain hopper cars as identity-preserved, segregated rolling storage. MGL has recently expanded its scope from specialty pulse crops to include a broad range of Saskatchewan-grown crops, directly connecting world class buyers with world leading Saskatchewan producers.
Certain statements in this press release are forward-looking statements. In particular, this press release contains forward-looking statements with respect to, among other things, the completion of the Transaction and the anticipated benefits of the Transaction. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by AGT 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 AGT (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, necessary third party approvals and the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Transaction, as well as those factors referred to in the section entitled "Risk Factors" in the Annual Information Form of AGT dated March 27, 2015 which is available on SEDAR at www.sedar.com, and which should be reviewed in conjunction with this document. Although AGT 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. AGT 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.
SOURCE AGT Food and Ingredients Inc.
For further information: Investor Relations, Omer Al-Katib, (306) 244-1318, [email protected]