Saskatchewan Wheat Pool has ended its 70-year ownership of The Western
Producer newspaper.
The grain company sold Western Producer Publications to GVIC
Communications Inc., a company that is owned by a British
Columbia-based information communications firm.
The sale will generate net proceeds, subject to adjustments, of $12
million that will be used to pay down the pool’s long-term debt.
“The pool is executing on its plan to focus on core strengths,” said
chief executive officer Mayo Schmidt during the Dec. 21 press
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conference announcing the sale of the paper.
“The sale allows us to generate value from our investment in the
newspaper while providing The Western Producer with an opportunity to
benefit from partnering with an established publishing firm.”
Glacier Ventures International Corp. is the largest shareholder of GVIC
Communications Inc. Glacier is one of North America’s largest
publishers of comprehensive technical and business manuals.
The new ownership group also publishes business magazines such as
Business in Vancouver and Western Investor, as well as a number of
community newspapers and tourist publications.
Glacier CEO Jonathan Kennedy said the company was interested in
purchasing The Western Producer because it helps diversify its holdings
in terms of content and geography – this is the company’s first
Saskatchewan-based publication.
The Producer’s 78-year history as the “bible for the (agriculture)
industry” was a strong selling feature, he said.
“It is a long-respected publication with an evident commitment to
editorial quality and integrity,” said Kennedy.
He said Glacier is committed to building upon the newspaper’s role as
the voice for western Canadian farmers and ranchers.
“Customers will see business as usual at the newspaper, with the same
dependable team of employees operating from the same locations.”
Saskatchewan Wheat Pool purchased The Western Producer in 1931, eight
years after the paper began its publishing life as The Progressive in
1923. The paper changed its name to The Western Producer in 1924.
The pool took over the newspaper in exchange for a promise to deal with
debts that had accumulated from unpaid subscriptions.
These days The Western Producer is in better financial shape.
According to the pool’s 2001 annual report, the publishing division,
which primarily consists of the newspaper, had sales of $16 million and
earnings before income taxes, depreciation and amortization, or EBITDA,
of nearly $4.1 million.
GVIC will finance the purchase of the newspaper with a combination of
banking indebtedness and advances from Glacier.
Kennedy said the purchase will be a significant addition to Glacier’s
current total net debt of $3 million but he said the company can
comfortably handle that debt with existing earnings and the current
interest rate environment.
Glacier’s EBITDA was just over $2 million for the period ending Dec.
31, 2000.
Sask Pool will record an after-tax gain on the sale of The Western
Producer of approximately $9 million, which will be recorded in the
second quarter of fiscal 2002.
The money will be used to help pay down the company’s long-term debt,
which totaled $706 million as of July 31, 2001.
Schmidt said the pool paid off $150 million in debt this year from the
sale of its interest in assets such as Xcan Grain Pool Ltd., Premium
Brands Inc. and Heartland Livestock Services.
Aside from its grain handling facilities, the pool still has an
ownership stake in Western Co-operative Fertilizers Ltd., Heartland
Pork, CanGro Aquaculture as well as agri-food processing companies such
as CSP Foods, Can-Oat Milling, Prairie Malt and CanAmera Foods.
The company employs just under 3,000 people and has a $125 million
annual payroll in Saskatchewan.
“There’s still a substantial footprint that Saskatchewan Wheat Pool
continues with,” said Schmidt.
The sale is expected to close Jan. 16.
