CALGARY, ALBERTA, CANADA — Viterra Inc. announced on Feb. 15 that it has entered into an agreement to sell its North American livestock feed operations to Hi-Pro Feeds LP (Hi-Pro).
Hi-Pro is a newly formed entity owned by the existing management team of the livestock feed business and Birch Hill Equity Partners. The agreement includes all of Viterra's North American feed assets. These assets include six feed mills and one pre-mix manufacturing facility in Canada, and six feed mills and a commodity blending site in the U.S.
Viterra said its decision to divest its North American feed business is based on a strategic review process and does not include or affect its New Zealand feed assets.
"The processing segment is important to Viterra's vertically integrated business model as it allows us to generate additional margin on the core commodities we handle and provides diversification to our earnings," said Mayo Schmidt, president and chief executive officer (CEO) of Viterra. "The company will continue to look for opportunities to grow its processing portfolio in industries where it can achieve scale and influence and this divestment will allow us to focus our capital on areas of greatest strategic impact. We are pleased that Hi-Pro intends to maintain continuity for the staff and customers of the livestock feed business going forward."
Daren Kennett, CEO of Hi-Pro, said, "I look forward to continuing to provide our customers with the same high level of services and quality products through the existing team of knowledgeable staff, and I am excited about the partnership with Birch Hill."
Canaccord Genuity is acting as financial advisor to Viterra while GMP Securities L.P. is acting as financial advisor to Hi-Pro.
Pending completion of customary closing conditions, including regulatory approvals, the transaction is expected to close during Viterra's second fiscal quarter.