Shermen WSC Acquisition Corp., New York City, an investment firm led by fertilizer veterans Francis P. Jenkins Jr. and G. Kenneth Moshenek, said Nov. 25 that it has entered into an agreement with ED&F Man Holdings Ltd. to merge with ED&F Man’s bulk liquid storage and liquid animal feed supplement businesses (Westway Group). As part of the transaction, ED&F Man will transfer the businesses to Shermen in exchange for $103.0 million in cash and a combination of newly issued common and convertible preferred shares of Shermen valued at approximately $165.1 million.
ED&F Man is a leading global supplier of a broad range of commodity products, including sugar, molasses, animal feed, tropical oils, biofuels, and coffee to multinational and industrial consumers. Immediately following completion of the transaction, Shermen will be renamed Westway Group Inc. and will be headquartered in New Orleans.
Jenkins, current chairman and CEO of Shermen, will become chairman of the board of Westway. Moshenek, current president and a director of Shermen, will become a director of the company.
“Infrastructure and nutrients are two of the few constants in the agricultural industry today and both serve as key foundations for the expansion in the global growth of agriculture,” said Jenkins. “We believe the upcoming expansion in identity preservation, food safety concerns and increased global trade of agricultural commodities will accelerate the need for more storage. Westway’s bulk liquid storage facilities are strategically positioned in key markets to take advantage of the growth opportunities coming down the road. Westway’s liquid animal feed supplement business has been the premier source of liquid animal nutrients for the livestock industry for many years. With Westway’s leadership in the feed industry and the logistical advantages provided by its broad network of facilities, we expect solid growth in this business as it mirrors the global consumer’s growing appetite for higher protein diets.”
Peter Harding, currently an ED&F managing director with management responsibility for Westway, will lead the Westway Group’s management team. The bulk liquid storage business will continue to be managed by Wayne Driggers, a 17-year veteran of ED&F. The liquid animal supplements business will continue to be managed by Bryan Shoemaker, a 19-year veteran of ED&F.
“This transaction will provide Westway with the financing and independence necessary to develop the growth and expansion opportunities of our businesses,” said Harding, who will be Westway CEO. “In addition, we are excited to work with Francis Jenkins and the Shermen Group to identify and execute new opportunities for our company.”
ED&F Man’s bulk liquid storage business, currently operating under the name Westway Terminals, is a leading global provider of storage services to manufacturers and consumers of agricultural and industrial liquids. The business’s infrastructure includes a network of 24 terminal facilities, offering total storage capacity of 284.0 million gallons, located at key port and terminal locations throughout the U.S., Western Europe, and Asia. Westway has fertilizer storage at various sites, both domestically and internationally.
ED&F Man’s liquid animal feed supplement business, currently operating under the name Westway Feed Products, is the largest liquid animal feed supplement manufacturer in North America. The business produces approximately 1.7 million tons of liquid animal feed supplements annually, which are sold directly to ranchers or feed manufacturers supplying the beef, dairy, horse, sheep, and other livestock industries.
Westway’s 30 strategically located manufacturing and distribution facilities allow the business to supply liquid animal feed supplements to the 48 contiguous U.S. states, five Canadian provinces, and parts of Northern Mexico. Westway is the only North American liquid animal feed supplement manufacturer with such extensive supply capabilities. The business also supplies liquid animal feed supplements in Australia via its 50 percent interest in the Champion Liquid Feed Co., a joint-venture with Ridley Agri-Products formed in 2001.
The transaction, which is subject to approval by Shermen stockholders, regulatory approval, and other conditions, is expected to close in the second quarter of 2009. As part of the transaction, Shermen will apply to change its listing to the New York Stock Exchange or NASDAQ.