A Kansas City-based grain processor with facilities in Texas and Nebraska is poised to be the latest expansion southward for Canada’s biggest grain handler.
Viterra said Thursday it has signed a US$90.5 million cash deal to buy 21st Century Grain Processing, which makes whole-grain ingredients for the cereal, baking and snack food industries.
“Its operational focus aligns well with our processing segment, creating opportunities to better serve our customers by optimizing our logistics and realizing production efficiencies,” Karl Gerrand, senior vice-president of processing for Regina-based Viterra, said in a release.
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“Further, it will position our company to better compete in this industry and meet the continued growth in demand for healthy food products in North America.”
21st Century’s facility at South Sioux City, Nebraska (across the Missouri River from Sioux City, Iowa) can store up to four million bushels of grain and can process up to 295 tonnes of commercial oat products daily.
The South Sioux City plant, which 21st Century bought from ConAgra in 2006, also makes coated grains and clusters used in ready-to-eat breakfast cereals, granola bars and other snacks.
The company’s Panhandle Milling plant near Amarillo, Texas, has storage capacity of three million bushels and can process up to 225 tonnes of flour per day. Its products include whole wheat, bakery and tortilla flour.
The plants’ certifications include kosher, AIB (American Institute of Baking), organic and USDA Process-Verified.
The processing company was launched as a co-operative venture in 1997 by 21st Century Alliance, a Kansas-based farmers’ group. It now employs about 100 people and posts annual revenues of around US$120 million.
Viterra said the deal “reinforces the company’s mission to leverage its expertise and existing core capabilities to supply its value-added processing operations.”
21st Century’s U.S. facilities, meanwhile, stand to gain from sourcing through Viterra’s oat milling and grain handling operations in Canada.
Furthermore, Gerrand said, the combination will allow Viterra to “deepen our relationships with customers and more effectively deliver innovative customized ingredients to them.”
The deal still has to clear U.S. federal antitrust regulators as per that country’s Antitrust Improvements Act (a.k.a. the Hart-Scott-Rodino Act) as well as “other customary closing conditions,” Viterra said Thursday.
