West-central Saskatchewan’s Prairie West Terminal network is being bought by CWB and added to the former export monopoly’s burgeoning grain-handling system.
CWB is paying $43 million for the company, which is owned by shareholders including many farmers. It operates grain elevators in Plenty, Dodsland, Luseland and Kindersley.
CWB chief executive officer Ian White said the purchase, which still has to be approved by shareholders after receiving unanimous support from the PWT board of directors, adds crucial reach to the CWB.
“We think it fits extremely well with us,” said White in an interview today.
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“(They’re) all good positions that we would hope to be able to help the management build on over time and improve. We see those as all good locations for us and gives us much more presence in Saskatchewan, which we’re looking to have.”
PWT CEO Chad Campbell sounded happy and relaxed this afternoon, saying he anticipated widespread farmer-shareholder support for the deal. The CWB has a good name in the area.
“I think they’ve got their eye on the best interest of the farmer,” said Campbell.
“Being an independent, producer-owned terminal we thought it fit well.”
PWT management will remain with CWB and White said the CWB’s ability to access capital will help PWT to expand and improve its abilities while its marketing connections will allow local farmers to move more through the facilities.
The transaction, which is not backed by government guarantee but is being financed through CWB retained earnings and commercial borrowing, must be approved by two-thirds of PWT shareholders and is expected to close June 2014.
CWB already had a minority share in PWT, but if the transaction is approved will own 100 percent of the shares.
When CWB bought its present stake in PWT, it signed a deal with PWT to examine whether a deal could be made for CWB to take over the rest of the company. Since then the company hasn’t been talking to other potential buyers.
Shareholders can reject the deal and consider other potential offers, but Campbell said he doubted that would happen. The CWB is offering fair value.
“They certainly brought a decent price to the table and with an aging shareholder population and some farms downsizing and the number of farms dwindling, I don’t see any issues with this,” Campbell said.
CWB has recently announced the building of two grain elevators, one in Saskatchewan and one in Manitoba, and previously purchased Mission Terminal in Thunder Bay and its grain handling assets on the Prairies as well as Les Elevateurs des Trois-Rivieres and Services Maritimes Laviolette in Quebec.
