WINNIPEG, MANITOBA, CANADA — Ag Growth International Inc. (AGI) completed the acquisition of Milltec Machinery Ltd. Milltec is headquartered in Bangalore, India, and is a manufacturer of rice milling and processing equipment in India.
The purchase price for Milltec was C$109.5 million, plus the potential for up to an additional C$38.4 million based on the achievement of EBITDA targets.
“The acquisition of Milltec marks an important step for AGI as we expand into rice equipment and enter the large, and rapidly growing, markets in India,” said Tim Close, president and chief executive officer of AGI. “Milltec now forms the foundation of our platform in India as we build a footprint to deliver our complete 5-6-7 strategy. India is one of the world’s largest producers and consumers of all agriculture products and will invest heavily in the infrastructure required to facilitate the daily lives of over a billion people. Milltec joins AGI at an inflection point in its journey from a small regional company to a Pan-India business. We will invest and collaborate to accelerate this journey. The founders of Milltec, and a very talented team, are joining AGI in the pursuit of our goal to supply the world’s food infrastructure.”
The acquisition fits with AGI’s 5-6-7 strategy, the company said, noting that it moves AGI into rice processing with a complete product line and establishes AGI’s platform in India. It is also complementary to AGI’s existing product offerings and provides a strategic platform for further consolidation.
In addition, AGI said it has identified several opportunities for sales, operational and supply chain synergies, including the service and support of AGI’s current product lines through Milltec’s Pan-India distribution platform, the sale of Milltec’s products across AGI’s established global distribution network, and significant advantages in engineering support.
Rising income in India and the ability to purchase higher quality and branded rice is rapidly increasing the size of the rice processing equipment market.
Growth drivers identified include: (i) As incomes rise in India consumers are choosing to purchase higher quality, and branded, rice products, which is rapidly increasing the size of the rice processing equipment market; (ii) Milltec has recently expanded into pulses and seed equipment adding another lever for growth in the region; and (iii) The additional access to capital that AGI provides will support both domestic and export growth.
Milltec’s equipment offerings include:
- Front-end equipment: pre-cleaners, boilers, parboilers and dryers.
- Milling equipment: classifiers, gravity separators, de-stoners, pneumatic shellers, thickness graders, whiteners, silky polishers, rotary sifters and length graders.
- End-of-line equipment: color sorters, packaging equipment with a capacity range of 10 to 75 kilograms.
Milltec also offers end-to-end turnkey solutions for rice processing activities. It also has expanded its product portfolio to include pulse, seed, maize and wheat processing equipment as well as ancillary products, including silica extraction and co-generation plants.
AGI is a provider of equipment solutions for agriculture bulk commodities, including seed, fertilizer, grain, feed and food processing systems. AGI has manufacturing facilities in Canada, the United States, the United Kingdom, Brazil, France and Italy, and distributes its product globally.