One of Western Canada’s first and largest farmer-owned grain terminals could soon be sold to a private sector grain company.
Weyburn Inland Terminal (WIT) announced Jan. 24 that it has entered an agreement to sell all outstanding shares in the company to Parrish & Heimbecker for $94.6 million, or $17.25 per share.
The deal is subject to approval by two-thirds of WIT shareholders. That approval will be sought at a meeting scheduled for late February or early March.
The $17.25 per share valuation represents a 33.7 percent premium over WIT share prices as of Dec. 12, 2013, the day WIT board members announced they were considering offers to sell the company.
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The company currently has about 1,550 shareholders who own roughly 5.5 million outstanding common shares.
WIT’s assets include a 105,000 tonne concrete grain terminal and associated fertilizer and farm input sales operations.
The company also has a controlling interest in NorAmera BioEnergy Corp., an ethanol production facility located in Weyburn, and it owns Vigro Seed and Supply, a specialty crop processing and marketing firm near Sedley, Sask.
Parrish & Heimbecker is a 105-year-old Canadian grain handling company based in Winnipeg.
According to a news release issued by WIT, P & H is Canada’s second largest flour miller, consuming more than one million tonnes of milling wheat per year.
Its assets include 32 line elevators across Canada as well as export facilities on the West Coast, the Great Lakes and the St Lawrence Seaway.
Rob Davies, chief executive officer with WIT, said the agreement with P&H is expected to boost the Weyburn facility’s annual grain handling volumes and ensure that WIT customers have ongoing reliable access to world markets through P&H export channels.
“The board of directors of WIT believes that this agreement is highly attractive to all stakeholders,” said Davies.
“It offers shareholders a substantial premium and a fully funded all cash offer. It also brings in a large Canadian operator with an outstanding track record and international export capabilities, ensuring the success of WIT and the local producer community for years to come.”
“We see tremendous potential in WIT and are excited to announce this partnership with south-astern Saskatchewan producers,” added P&H vice-president John Heimbecker.
“WIT will fit very well within P & H’s existing network of grain assets …. We expect the proposed acquisition to be beneficial both to producers and the Weyburn community.”
The deal is subject to court approval pursuant to the Business Corporations Act.
Under the agreement, WIT retains the right to terminate the deal if a superior unsolicited offer is received.
P & H would retain the right to match any superior deal.
Davies said WIT’s board is unanimously recommending that shareholders approve the P & H agreement.
WIT expects the deal to close before March 31, 2014.
