Saskatchewan pulse processor AGT Food and Ingredients Inc. has struck a deal to acquire Mobil Capital Holdings, the parent company of short-line railway operator Mobil Grain.
According to an Oct 5 news release, AGT and its subsidiary Alliance Pulse Processors Inc. will acquire Mobil Capital and its subsidiary operations for $57.5 million.
The $57.5 million purchase price will include $19 million in common shares of AGT as well as a $19.5 million promissory note, repayable in equal installments over five years.
The sale is subject to a number of conditions and is expected to be completed before the end of the calendar year.
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“This is an exciting follow-on acquisition to our previously completed investment in bulk loading and handling assets of West Central Road and Rail announced in June 2015,” said Murad Al-Katib, president and chief executive officer of AGT.
“Rail transportation and loading infrastructure are essential elements to the competitiveness … especially in the current global supply and demand environment. The ability to control our logistics chain with ownership of rail logistics assets and short line rail infrastructure and equipment servicing our handling assets, we feel, allows AGT to create a competitive advantage over time.”
Al-Katib said growth in AGT’s North American pulse business has warranted continued investments in Canada.
He said the acquisition of Mobil will augment pulse capacity while adding the ability to solidify durum wheat origination and supply chain for the company’s growing pasta and bulgur wheat business.
“Efficient transportation modes ensure the smooth movement of products, matching origination and production to demand and supply requirements from farm to customer,” Al-Katib said in the Oct 5 news release.
“We feel we will continue to be very competitive in this way, and this acquisition assists us in meeting this objective, allowing us to continue growing shareholder value with the growth of our business.”
Mobil is a privately owned company involved in the operation of modular processing facilities, short-line railways, bulk commodity transloading and the trade of pulses and grains in Saskatchewan and Ontario.
The company’s subsidiaries include Mobil Grain Ltd., Big Sky Rail Corp., Mobilex Terminal Ltd. and Mobil Transloading Ltd.
AGT is a processor of value-added pulses, staple foods and ingredients for export and domestic markets as well as a supplier of retail packaged and canned foods to retail and food service sectors.
The company has offices and processing facilities in Canada, the United States, Turkey, China, Australia and South Africa, as well as merchandizing, sales and origination operations in the United Kingdom, the Netherlands, Spain, Switzerland, India and Russia.
AGT produces a full range of pulses and specialty crops including lentils, peas, chickpeas, beans and canaryseed as well as food ingredients such as pulse flours, proteins, starches and fibres.
Through its subsidiaries in Turkey, the Arbel Group, AGT also produces staple foods such as Arbella Pasta, rice and milled wheat products, including bulgur and semolina.
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