A Minneapolis company with agricultural assets in the United States and Canada has announced plans to acquire Delmar Commodities, based at Winkler, Man.
Ceres Global Ag Corp. said July 8 that it has secured an exclusive option to acquire Delmar Commodities, subject to due diligence work and the finalization of a definitive share purchase agreement.
Ceres, whose Canadian assets include a bulk grain-handling terminal and export facility at Northgate, Sask., said it hoped to complete the Delmar acquisition by Aug. 1.
Under the terms of the agreement, Ceres has the right to purchase all of Delmar’s issued and outstanding shares for C$16 million in cash, and the assumption of about $7.6 million in debt.
If the deal goes ahead, Delmar would operate as a subsidiary of Ceres, with Delmar’s operations and about 55 employees integrated into Ceres’s overall operational network, according to a July 8 news release.
“We believe the addition of Delmar’s grain assets to be an important first step in adding strategic origination for our core products…,” 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.”
Day said the acquisition of Delmar would also significantly advance Ceres’ portfolio diversification.
Delmar Commodities is an agricultural processing and supply chain company with four primary business lines, including grain merchandizing, soybean crushing and birdfeed production and sales.
The company is also the exclusive distributor in Western Canada of Legend Seed products under a distribution agreement with Legend Seeds, USA.
“We are excited about the prospects of being a part of Ceres’ business and team,” said Delmar president Dale Heide.
“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 option to purchase Delmar for $16 million expires on July 31.