Alltech buys feed maker Ridley

International animal nutrition company Alltech is buying North American feed maker Ridley Inc. in a deal valued at $521 million.

Ridley Inc. comprises three operating divisions: Hubbard Feeds, Ridley Block Operations and Ridley Feed Ingredients, and one joint venture, Masterfeeds LP.

Masterfeeds LP is a partnership of Ridley Inc. and Masterfeeds Inc. that was formed in 2012 by the merger of Ridley’s Canadian feed operations, called Feed-Rite, with Masterfeeds Inc., the Canadian feed business of Ag Processing Inc., a farmer owned co-operative from Omaha, Nebraska.

Masterfeeds LP operates 20 feed manufacturing plants and employs more than 500 people in operations in Quebec, Ontario and the Prairies. Masterfeeds LP is headquartered in London, Ont., with a regional office in Lethbridge.

The per share valuation is $40.75, representing a premium of 23 percent to the 20-day volume weighted average price of Ridley’s common shares on the TSX as of April 22.

The closing price of the Ridley shares on the TSX on April 22, was $33.94. The boards of directors of both companies have unanimously approved the merger, the companies said in a news release.

Ridley makes and markets a full range of animal nutrition products, including formulated complete feeds, premixes, feed supplements, block supplements, animal health products and feed ingredients.

The combined Alltech-Ridley company will have a presence in more than 128 countries with 4,200 employees. Alltech has more than doubled its sales in the last three years and is on target to achieve US$4 billion in sales in the next few years, the company said.

The transaction is subject to approval by Ridley shareholders, regulatory review and other customary closing conditions. The transaction is expected to close by the end of the second quarter.

In 2014, Ridley had revenue from continuing operations of $568.7 million and net income of $20.67 million.

Alltech is a private company founded by Dr. Pearse Lyons in 1980 and is headquartered in Kentucky.

Contact darce.mcmillan@producer.com

About the author

Comments

explore

Stories from our other publications