- Acquisition of Canada's Largest Sunflower Processer/Marketer Significantly Strengthens Position in Bakery Ingredient Market -
WINNIPEG, Aug. 27, 2012 /CNW/ - Legumex Walker Inc. (TSX: LWP) today announced it has entered into a letter of intent with Keystone Grain Ltd. ("Keystone"), a leading Manitoba-based processor and marketer of sunflowers, flax, specialty crops and organic commodities, under which Legumex Walker will purchase all of the outstanding shares of Keystone. Pending the completion of the acquisition, the two companies have agreed to coordinate the sourcing of feedstock and selling of products. Keystone is Canada's largest processor and marketer of sunflowers and sunflower products.
"Keystone is a highly strategic addition to our U.S.-based sunflower processing assets and significantly enhances our ability to service the growing demand for sunflower and flax products in the bakery ingredients market," said Joel Horn, President and Chief Executive Officer, Legumex Walker. "Available processing capacity at our existing sunflower facilities will allow us to capitalize on meaningful growth opportunities inherent in the Keystone business. In addition, Keystone's business will further diversify our product offerings through entry into the retail bird food market, as well as provide cross-selling opportunities for our respective merchandising teams. Importantly, we expect the transaction to be accretive to 2013 earnings, exclusive of any potential synergies that may be realized."
"Joining forces with Legumex Walker will allow us to take advantage of currently available growth opportunities we could not pursue on our own," said Don Falk, President, Keystone Grain Ltd. "The addition of Keystone to Legumex Walker will create one of the largest suppliers of sunflower and flax products in North America with bakery ingredient sourcing and processing on both sides of the Canada/U.S. border - a significant strategic advantage. We have tremendous respect for the people at Legumex Walker and look forward to becoming part their special crops family."
Keystone's assets include a sunflower processing facility and a flax processing facility in Winkler, Manitoba and a bird food processing facility in Winnipeg, Manitoba with a combined capacity of 62,000 metric tonnes annually. Keystone processes and markets a variety of food-grade products, primarily focusing on sunflower and flax products, including bakery sunflower kernels and confectionary sunflower kernels and several varieties of both milled and non-milled flax. Keystone also processes and markets custom private label bird food products and retail wild bird food products, and packs wild bird food products under the Emerald Farms label for the retail market, including several large North American big box retailers.
Legumex Walker's acquisition of Keystone is subject to further satisfactory due diligence, definitive documentation and customary closing conditions. Until all the closing conditions are satisfied or waived, there can be no assurances that this transaction will be completed. If all closing conditions are satisfied, closing is expected to occur in September 2012.
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, the American Midwest, and China, 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 proposed acquisition of Keystone, the Company's plans for this acquisition, its expectations for the performance of this acquisition, the impact of this acquisition on the overall performance of the Company and on financial results for future periods. Such forward-looking information reflects the Company's view with respect to future events and is subject to risks, uncertainties and assumptions, including risks associated with the integration of the operations of with the Company's current operations and those set out in the Annual Information Form of Legumex Walker for the year ended December 31, 2011 and in the Company's Management's Discussion and Analysis for the period ended June 30, 2012, which are available on SEDAR at www.sedar.com and which should be reviewed in conjunction with this press release available at www.sedar.com. The Company does not undertake to update forward-looking statements or forward-looking information, except as required by law.
SOURCE: Legumex Walker Inc.
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