AGI completes acquisition of Westeel

by World Grain Staff
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WINNIPEG, MANITOBA, CANADA — Ag Growth International Inc. (AGI) announced on May 20 that it has completed its acquisition of the Westeel division of Vicwest, Inc.

Headquartered in Winnipeg, Manitoba, Canada, Westeel is a leading provider of grain storage solutions offering a wide range of on-farm and commercial products for the agricultural industry.

“The strategic acquisition of Canada's leading brand in grain storage further establishes AGI as a global leader in grain handling and storage solutions,” said Gary Anderson, AGI’s chief executive officer. “AGI and Westeel share a deep commitment to product quality and customer service and combined we create a Canadian-based global agricultural leader with a long history of serving the needs of our customers. Westeel’s complementary product offering expands our growth platform within North America and around the world and we look forward with enthusiasm to bringing this outstanding company into the AGI family.”

“AGI places the highest value on the contributions of its employees and we look forward to meeting and welcoming all of the people at Westeel,” said Tim Close, president of AGI. “We are very excited to get to work on growing Westeel along with AGI and realizing upon the enormous potential of the combination of these great companies.”

The aggregate purchase price for Westeel was C$221.5 million. The purchase price includes net cash on closing of approximately C$13 million and a redundant manufacturing plant with an estimated market value of C$4 million.

Westeel generated adjusted EBITDA of approximately C$20 million in 2014. The estimated adjusted EBITDA reflects earnings of the Westeel business (before any costs associated with Vicwest's corporate support functions that were not transferred to AGI as part of the Westeel acquisition) less incremental corporate support costs AGI estimates will be required post-closing. For the year ended Dec. 31, 2014, AGI generated adjusted EBITDA of C$78 million, resulting in pro forma adjusted EBITDA for the period of C$98 million.

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