Grain handler Richardson targets American acquisitions

WINNIPEG (Reuters) — Richardson International, one of Canada’s largest grain handlers, is seeking to expand in the United States through acquisitions worth $100 million to $2 billion.

Richardson, which now owns two U.S. mills, is interested in Andersons Inc. and private companies Bartlett and Scoular, as well as co-operatives, said chief executive officer Curt Vossen.

He said Richardson has had no discussions with those companies and it was unclear if they are willing to sell.

The company is also looking to expand to Latin America, Australia and Eastern Europe, where more crop is produced than can be consumed domestically.

However, the United States “is the logical growth direction,” Vossen said.

“We don’t have to be the largest, but we have to be meaningful.”

“There’s no point in acquiring small businesses if they don’t move the EBITDA (earnings before interest, tax, depreciation and amortization) needle for the organization in an effective way,” he said.

Vossen said Richardson would have to outbid competitors from North America and Asia if Andersons, long considered by analysts as a takeover target for its grain storage and rail cars, Bartlett or Scoular are willing to sell.

Andersons, which has a $1.2 billion market cap, is an attractive size but also has significant family ownership that could complicate a transaction, Vossen said.

Richardson is interested in U.S. assets in grain handling, processing and crop inputs, mainly in the northern Plains and other wheat-growing areas, he said.

The company may also build assets in the U.S. once it acquires a critical mass, he added.

Legumex Walker Inc. of Winnipeg has said it is open to a sale. Vossen said he is not interested in Legume’s Washington-state canola crushing plant and is undecided about whether its special crop assets are attractive.

Richardson International, the largest division of James Richardson & Sons Ltd., has a share of grain handling capacity in Western Canada similar to that of Glencore Plc’s Viterra Inc.

Vossen said it is trying to close one acquisition in Western Canada and one in Eastern Canada but declined to give details.

Richardson’s last big deal was its $900 million purchase of Viterra assets when Glencore took over the Canadian company in 2012.

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