Deal boosts position in domestic market
The Andersons Inc. has successfully completed its acquisition of Lansing Trade Group L.L.C. The company previously owned approximately 32.5 percent of Lansing, and paid cash and stock valued at approximately $324 million for the remaining equity. This transaction was originally announced on October 15, 2018, and closed effective January 1, 2019.
“With the completion of this acquisition, we have significantly bolstered our position in the domestic agricultural marketplace,” said Pat Bowe, president and CEO of The Andersons. “We are confident that acquiring these assets, and especially hundreds of very talented people, will allow us to compete more successfully, provide greater value to more customers across an expanded platform, and grow more profitably. We welcome the employees of Lansing Trade Group to The Andersons and look forward to completing a seamless integration process,” Bowe continued.
The company paid $201 million in cash, which included an initial working capital adjustment of $33 million, and issued 4.1 million unregistered shares valued at approximately $123 million. In addition, it issued approximately 280,000 unregistered shares and may issue up to approximately 370,000 additional unregistered shares to replace existing unvested incentive compensation and fund employee retention payments. The aggregate shares issued, and to be issued, represent about 14 percent of revised total outstanding shares on a fully diluted basis.
The transaction also results in the consolidation of Thompsons Limited of Ontario, Canada, and related entities, which Lansing and the company have jointly owned. Additionally, the company assumed approximately $160 million of Lansing and Thompsons long-term debt.
The company expects the transaction to be accretive to EPS within the first full year after closing and to achieve annual run rate cost synergies of at least $10 million by year-end 2020.
In conjunction with closing, The Andersons entered into a three-year employment agreement with Lansing’s former president and CEO Bill Krueger. It will shortly enter into a new $1.65 billion short- and long-term financing arrangement led by U.S. Bank that will replace the former separate Andersons and Lansing financing arrangements.
Most of Lansing’s business operations will be merged with the business of The Andersons Grain Group, forming a business division to be known as The Andersons Trade Group. The combined operation is being jointly led by Corey Jorgenson, as president, assets and originations, and Krueger, as president, commodities and merchandising.