Lansing Trade Group has struck a deal to acquire a larger ownership stake in Providence Grain, a farmer-controlled grain company based at Fort Saskatchewan, Alta.
Lansing, based in Kansas, will acquire an additional 25 percent ownership position in Providence, bringing its total equity in the company to 38 percent.
Lansing acquired an initial equity position in Providence about two years ago.
In addition, the deal will see Providence acquire the assets of Lansing Canada, including employees, a trading system, a customer list and leases on track loading facilities.
The deal expected to close March 31, 2016.
“The deal is basically made up of Providence Grain buying the business assets of Lansing Canada and Lansing Trade Group purchasing about 25 percent new equity in Providence Grain,” said Milton Miller, president and chief executive officer at Providence.
“We’ll have additional employees and customers but otherwise, it’s business as usual. The board of directors is still controlled by producer ownership.”
Miller said the relationship with Lansing over the past two years benefited both companies.
“We have very like minded companies, a lot of similarity in culture…,” he said.
“I think the trading and base philosophies of the companies are very similar.”
All told, the deal will see Providence’s workforce increase by six people, including traders and assistants located throughout Western Canada.
The deal will also give Providence access to new markets and additional procurement opportunities.
“Lansing has access to both U.S. and international markets that will benefit Providence Grain,” Miller said.
“It also gives us an additional procurement base, so additional tonnes that we’ll be purchasing from producers and marketing.”
He declined to say how much Providence’s annual handlings would increase.
The value of the deal was not disclosed.
“It positions Providence Grain to continue with strategic growth objectives and we continue to look for opportunities to do business in areas where producer-owned companies are appreciated.”
Providence is one of a handful of independent, producer-owned grain companies in western Canada.
It owns and operates grain elevators at Fort Saskatchewan, Viking and Crossfield, Alta., as well as Marengo, Sask.
It also operates a four crop retail outlets in Alberta and owns a freight forwarding company and a container packaging facility — Columbia Containers — on the Burrard Inlet at the Port of Vancouver.
Lansing is a commodity merchandising company largely focused on the movement of physical commodities including grains, feed ingredients and energy products within North America and internationally.
The company has 13 offices across North America, as well as locations in the United Kingdom, Brazil and China.