MINNEAPOLIS, MN, July 8, 2019 /CNW/ - Ceres Global Ag Corp. (TSX: CRP) ("Ceres" or the "Company"), a global agricultural, energy and industrial products merchandizing and supply chain company, announced today that it has secured an exclusive option to acquire Delmar Commodities, Ltd. based in Winkler, Manitoba ("Delmar"). Subject to successful completion of due diligence activities and the finalization of a definitive share purchase agreement, Ceres hopes to close this potential acquisition on or about August 1, 2019.
Under the terms of the option agreement, Ceres has the right through July 31, 2019 to purchase all of Delmar's issued and outstanding shares for CAD $16 million in cash paid to Delmar's shareholders, and the assumption of approximately CAD $7.6 million in existing term debt. Delmar would operate as a subsidiary of Ceres, with Delmar's operations and approximately 55 employees strategically integrated into Ceres' overall operational network.
"We believe the addition of Delmar's grain assets to be an important first step in adding strategic origination for our core products, while also significantly advancing our portfolio diversification strategy with the inclusion of their soybean crush, agricultural seed sales & distribution and birdfeed product lines," said Robert Day, President and Chief Executive Officer of Ceres. "We see significant value in Delmar's capabilities, market knowledge and customer relationships, but perhaps the most attractive aspect of Delmar is its people and their talent. This potential combination is an important step for Ceres as we execute our growth strategy, and we look forward to untapping the potential our teams can have working together."
"We are excited about the prospects of being a part of Ceres' business and team," said Dale Heide, President of Delmar. "Delmar's growth ambitions and plans, combined with Ceres' customer network and access to capital, would provide us with a unique opportunity to profitably grow together."
Ceres commenced due diligence on a potential acquisition of Delmar in February 2019. There can be no assurance that Ceres's due diligence will be concluded to its satisfaction or that an acquisition will be successfully concluded.
About Ceres Global Ag Corp. (ceresglobalagcorp.com)
Through its network of commodity logistics centers and team of industry experts, Ceres procures and supplies North American agricultural commodities and value-added products, industrial products, fertilizer, energy products and reliable supply chain logistics services to customers worldwide.
Ceres operates five locations, Duluth, MN; Minneapolis, MN; Shakopee, MN; Northgate, Saskatchewan; and Port Colborne, Ontario, and is headquartered in Minneapolis, MN. Its facilities throughout North America have an aggregate grain and oilseed storage capacity of approximately 29.7 million bushels.
Ceres also has a 50% interest in Savage Riverport, LLC, a joint venture with Consolidated Grain and Barge Co., a 25% interest in Stewart Southern Railway Inc., a short-line railway located in southeast Saskatchewan with a range of 130 kilometers, and a 17% interest in Canterra Seed Holdings Ltd, a Canada-based seed development company.
For more information, please visit www.ceresglobalagcorp.com
About Delmar Commodities, Ltd.
Delmar Commodities, Ltd. is a Manitoba-based agricultural processing and supply chain company with four primary business lines: Grain merchandizing, soybean crush, birdfeed production and sales, and is the exclusive distributor in western Canada of Legend Seed products under a license and distribution agreement with Legend Seeds, USA.
For more information, please visit www.delmarcommodities.com.
Cautionary Notice: This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation and United States securities laws. Forward-looking information may include, but is not limited to, statements regarding future operations and results, anticipated business prospects and financial performance of Ceres and its subsidiaries, including the potential acquisition of Delmar, the plans, costs, timing and capital for the further development of the Northgate Commodities Logistics Centre, expectations or projections about the future, strategies and goals for growth, expected and future cash flows, costs, planned capital expenditures, regulatory change, general economic political and market conditions anticipated capital projects, construction and completion dates, operating and financial results, critical accounting estimates, the expected financial and operational consequences of future commitments. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", "believes", "may have implications" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved." Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Key assumptions upon which such forward-looking information relating to the subject matter of this press release is based include satisfactory completion of due diligence, obtaining the necessary financing on reasonable commercial terms to fund the acquisition of Delmar, successfully integrating Delmar's operations and its employees into Ceres' overall business, as well as those matters listed in the "Forward-Looking Information" section of the MD&A for the period ended March 31, 2019. Many such assumptions are based on factors and events that are not within the control of Ceres and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking information include, among others, risks related to weather, politics and governments, changes in environmental and other laws and regulations, competitive factors in agricultural, food processing and feed sectors, construction and completion of capital projects, labour, equipment and material costs, access to capital markets, interest and currency exchange rates, technological developments, global and local economic conditions, the ability of Ceres to successfully implement strategic initiatives and whether such strategic initiatives will yield the expected benefits, the operating performance of the Corporation's assets, the availability and price of commodities and regulatory environment, processes and decisions. Although Ceres has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results that are not anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Ceres undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change, except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking information.
SOURCE Ceres Global Ag Corp.
For further information: Katelynn Thissen, NATIONAL Capital Markets, 416-848-1427, [email protected]