U.S. grain firm The Andersons, the owner of Thompsons since January, announced Tuesday in its second-quarter report it plans to sell Thompsons’ “agronomy assets” to Burlington, Ont.-based Sylvite Holdings.

Financial terms of the sale, which The Andersons expects to close next month, weren’t released in Tuesday’s report, nor were any details about the exact assets going to Sylvite in the deal.

Ohio-based Andersons said Tuesday it will continue to own and operate Thompsons’ grain storage and food processing facilities in Ontario.

Sylvite, which began in 1977 as Sylvite Sales, a fertilizer supplier dealing mainly in potash, today bills itself as the largest independent agricultural wholesaler in Eastern Canada, with a “specialty presence” in the southeastern U.S.

The company’s business also includes Sylvite Agri-Services, which sells retail fertilizer, seed and crop inputs at five locations in southwestern Ontario. It also offers crop advisory services, grain handling and, in partnership with Thompsons, grain marketing.

Thompsons’ agronomy business includes crop advisory services as well as retail inputs, custom application, precision ag and equipment rentals, though The Andersons didn’t specify Tuesday which of those operations are to go to Sylvite.

The Andersons has been sole owner of Thompsons since it closed a deal in January for Kansas-based Lansing Trade Group, with which it had co-owned Thompsons in a 50-50 joint venture since 2013.

The Andersons on Tuesday booked $29.88 million in net income attributable to the company on $2.33 billion in sales and merchandising revenues for the quarter ending June 30, up from $21.53 million on $911 million for the year-earlier period (all figures US$).

“Extremely wet weather in many of our core grain origination markets benefited our trade group but hurt both our ethanol and plant nutrient groups during the quarter,” Andersons CEO Pat Bowe said in the company’s release.

“We were able to capitalize on merchandising opportunities caused by grain and feed ingredient price volatility. However, we’re concerned about the implications of a smaller corn crop on the utilization of our eastern grain assets for the remainder of this year and into 2020.” — Glacier FarmMedia Network

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Ohio-based grain handling and processing firm The Andersons, Inc. announced Monday it has signed a deal with Lansing Trade Group (LTG) for the remaining 67.5 per cent of LTG it doesn’t already own.

The Andersons has held a minority equity stake in Kansas-based LTG since 2003 — 15 per cent at first, gradually increasing to 49 per cent by 2008 and later pared back to its current level.

The cash-and-stock acquisition, valued at about $305 million, will give LTG shareholders about $175 million in cash and about $130 million in unregistered Andersons shares (all figures US$).

The deal will also “result in the consolidation” of Thompsons, which LTG and The Andersons bought jointly in 2013, each holding a 50 per cent stake in the joint venture.

Blenheim, Ont.-based Thompsons, a grain and food-grade bean handler and crop input provider, has 12 facilities in Ontario and Minnesota.

Andersons CEO Pat Bowe said in a release Monday a merger with LTG will create “a grain business of highly complementary assets with greater scale that significantly expands our reach in the agricultural marketplace.”

The deal calls for LTG’s business to be “integrated” with that of The Andersons’ grain group, and the merged business to be jointly led by Andersons’ grain group president Corey Jorgenson and LTG CEO Bill Krueger.

The Andersons has been weighed down in the past few years by the same market pressures burdening U.S. agrifood firms such as Bunge, ADM and Cargill, which have faced both low grain prices and limited price volatility.

In its 2017 annual report, it noted its grain group “recovered nicely from a tough 2016” while its other business groups, including ethanol, plant nutrients and rail equipment leasing, faced “significant market challenges.” In early 2017 The Andersons also folded its retail business, affecting over 1,000 employees.

The Andersons in fiscal 2017 booked $42.5 million in net income attributable to the company on $3.69 billion in sales and merchandising revenues, up from $11.6 million on $3.9 billion in 2016.

The Andersons said Monday it expects a deal for LTG to accrue to EPS (earnings per share) within the first full year after the deal’s closing, which is expected before the end of January, pending the usual regulatory and shareholder approvals.

It said it also expects the merged business to chalk up annual run rate cost synergies of at least $10 million by year-end in 2020.

Jorgenson, in Monday’s release, said the merger is expected to speed up The Andersons’ plans to “grow income from originations and managing grain assets, expand trading and risk management services, and broaden our food ingredients and specialty grains and feed ingredients platform.”

Privately-held LTG’s Canadian holdings also include a stake of about 38 per cent in Alberta-based grain handler Providence Grain Group. Lansing’s grain trading desks on the Prairies and at Chatham, Ont. now operate under the Providence and Thompsons banners respectively.

LTG further built up its space in Canadian grain merchandising in 2012 in a Hamilton-based joint venture with Singapore’s Olam International, which at the end of 2013 sold its stake in that operation back to Lansing for $5.4 million.

LTG’s businesses, apart from grain and oilseed trading, include trading of feed ingredients such as distillers grains, wheat middlings, protein meals and cottonseed and merchandising of energy products including ethanol, natural gas liquids and frac sand. — Glacier FarmMedia Network

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Kansas-based Lansing Trade Group, which maintains grain trading desks in Western Canada, announced in late March it will increase its stake in Alberta-based Providence Grain to 38 per cent, up from about 12 per cent previously.

Providence, as part of the deal, said it will merge Lansing’s Prairie offices into its own handling and merchandising operations under the Providence banner.

“Combining these two businesses is a chance to align the strong asset base and merchandising of Providence with the Lansing team and build a larger network across the Prairies,” the companies said in a release March 23.

Financial terms weren’t disclosed in the deal, which was expected to close at the end of March. Providence CEO Milton Miller will continue to lead the merged operations, which will still be based in Fort Saskatchewan, Alta.

Providence operates a grain elevator and crop input business at Gaudin, Alta., northeast of Fort Saskatchewan; elevators at Crossfield and Viking, Alta. and Marengo, Sask.; and a crop input business at Waskatenau, Alta.

Providence also operates the Columbia Containers business at the Port of Vancouver, and grain trading offices at Winnipeg and Blenheim, Ont.

Lansing took over southwestern Ontario grain handler and processor Thompsons Ltd. in 2013 in a joint venture with U.S. agrifood firm The Andersons. Lansing’s Chatham, Ont. grain merchandising desk is now part of the Thompsons business.

Lansing had also taken part in a short-lived joint venture in Prairie grain merchandising with Singapore’s Olam International. Olam sold its stake in the venture, Lansing Olam Canada, back to Lansing at the end of 2013. — AGCanada.com Network

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Thompsons Ltd. will start buying corn immediately for deliveries from Oct. 1 onward to the Aylmer, Ont. ethanol plant, IGPC (Integrated Grain Processors Co-operative) said in a release Wednesday.

Cargill, which in 2007 signed an exclusive deal for its corn origination services with IGPC before the plant’s opening, will continue making corn purchases and deliveries for the plant up to Sept. 30, IGPC said.

“This change in no way reflects upon the performance of Cargill. They have been excellent partners,” Jim Grey, CEO for IGPC’s ethanol production arm, said in Wednesday’s release.

“We are making the switch to Thompsons as we feel they will be able to support the strategic initiatives we will be undertaking in the future.”

IGPC’s ethanol plant was commissioned in 2008 with plans to process about seven per cent of the province’s corn production. The plant today produces about 170 million litres of fuel-grade ethanol and 170,000 tonnes of distillers’ grains per year.

Cargill said at the time it had been contracted to supply over 350,000 tonnes of corn per year. IGPC said in 2007 it had picked Cargill for its “well recognized knowledge and expertise in sourcing the large steady supply of corn needed for our ethanol operation.”

While Cargill operates 30 elevators in Western Canada, its grain handle in southern Ontario includes just five elevators plus its terminal at Sarnia. Thompsons, by comparison, operates 11 grain elevators in southern Ontario plus one in Minnesota.

Thompsons president Dawn Betancourt said Wednesday the company is “excited to expand our originations footprint in Ontario” through the IGPC deal.

Founded in southern Ontario in the 1920s, Thompsons has been jointly owned by two U.S. commodity firms, The Andersons and Lansing Trade Group, since 2013.

Thompsons last month expanded its grain marketing reach in the region with a deal to buy Rannoch Grain of Rannoch, Ont., near St. Marys. That deal is expected to close by the end of June. — AGCanada.com Network

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