Ag Growth acquires Tramco
December 22, 2010
by World Grain Staff
WINNIPEG, MANITOBA, CANADA — Ag Growth International Inc. announced on Dec. 21 the acquisition of 100% of the outstanding shares of Tramco Inc., a manufacturer of heavy duty chain conveyors and related handling products that are sold primarily into the grain and oilseed processing sectors. The purchase price of $21.3 million plus closing costs and a working capital adjustment will be financed from Ag Growth’s cash on hand and represents a valuation of approximately five times Tramco’s normalized EBITDA over their last two fiscal years.
Tramco was established in 1967 and is located in Wichita, Kansas, U.S. with an overseas manufacturing facility in Hull, England and a sales office in the Netherlands. Tramco is active in both the domestic and international grain processing sectors with average sales over the last two fiscal years of approximately $30 million. Tramco’s international footprint is augmented with a strategic alliance in China and sales efforts in other major processing markets such as South America. To date, Tramco has sold conveyors into more than 50 foreign countries.
“We are very excited to join forces with this market leader in the grain processing segment,” said Gary Anderson, Ag Growth’s chief executive officer, “Tramco is an industry leader with a premier brand name and strong market share and as such provides an excellent entry point into the next important segment of the chain, the grain processing sector. The processing industry is an integral part of the food supply chain and is a compelling direction for Ag Growth to continue to build its leadership in grain handling equipment. The leverage of customer relationships to provide “one stop” shopping, the ability to participate in a market where international growth is strong, and the opportunity to raise our North American profile are all powerful, strategic reasons to make our entrance with a strong brand like Tramco. Tramco has established a globally recognized brand name under the leadership of founder Leon Trammell, who built his company based on product innovation and an extreme passion for customer satisfaction. Leon has positioned Tramco well to take advantage of increasing opportunities in an expanding grain processing industry.”
Ag Growth is a leading manufacturer of portable and stationary grain handling, storage and conditioning equipment, including augers, belt conveyors, chain conveyors, grain storage bins, grain handling accessories, grain aeration equipment and grain drying systems. Ag Growth has 10 manufacturing facilities in Canada, the U.S. and Finland, and its sales, marketing, and distribution system distributes product in 48 states, nine provinces and internationally.
Today, Tramco has over 150 employees and its products are in over 55 countries around the world. Trammell said he now looks forward to a career as a speaker, consultant and author. Ag Growth said it does not expect to change much of the daily operations and focus of Tramco, and Steve Cloud, a long-time executive for Tramco, will continue at the helm of the local facility as the general manager.