Gavilon LLC and the DeBruce Companies said Oct. 19 that the companies have signed a definitive agreement under which DeBruce will become a wholly owned subsidiary of Gavilon.
Upon completion of the transaction, founder and CEO Paul DeBruce will continue to serve in his current role and join Gavilon’s board of directors. Larry Kittoe, chief operating officer of DeBruce, will also continue to serve in his current role.
“We are pleased to make this announcement with DeBruce and are enthusiastic about the potential this strategic combination will offer our customers, suppliers, and employees,” said Greg Heckman, president and CEO of Gavilon. “This transaction will result in a company that is extremely well-positioned to meet rapidly growing demand for agricultural resources worldwide, by expanding our North American footprint and nearly doubling access to supply.”
“Our two companies are highly complementary,” said Paul DeBruce. “Each has a variety of operating and service-offering strengths to contribute to the combined entity. Identifying and leveraging best practices will enable us to aggressively compete as one of the leading commodity management firms and the third largest grain storage network in the U.S., while enhancing the services we provide our customers and suppliers.”
Gavilon will purchase the DeBruce Companies, including their grain handling facilities, fertilizer distribution network, feed mills, and bean crushing plant. DeBruce Grain Inc. has elevators located in Kansas, Iowa, Nebraska, Texas, Kentucky, Oklahoma, Mississippi, Alabama, Indiana, Wisconsin, and Mexico, with combined licensed storage capacity in excess of 140 million bushels.
The transaction is expected to close in November 2010, subject to receipt of certain regulatory approvals.
Morgan Stanley acted as financial advisor and Jones Day acted as legal advisor to Gavilon, LLC in connection with the transaction. BMO Capital Markets acted as financial advisor and Stinson Morrison Hecker LLP acted as legal counsel to DeBruce in connection with the transaction.
Gavilon, LLC, a unit of The Gavilon Group LLC, Omaha, Neb., is a leading commodity management firm, connecting producers and consumers of feed, food, and fuel through its global supply chain network. Gavilon’s history dates back to 1874, when Peavey Co. built its first grain facility. In 1982, Peavey was acquired by ConAgra Foods, Inc. and later became part of ConAgra Trade Group. In 2008, a group of investors formed Gavilon and acquired ConAgra Trade Group, enabling the newly formed, privately held company to focus on growing its commodity business. Today, Gavilon leverages its strategic partnerships and more than 200 facilities and regional offices worldwide to link agriculture, fertilizer, and energy supply with increasing global demand.
The company provides origination, storage, and handling, transportation and logistics, marketing and distribution, and risk management services to tens of thousands of customers each year and employs more than 1,100 people around the world. For more information, please visit www.gavilon.com.
Founded in 1978, DeBruce, Kansas City, Mo., is a leading agricultural firm. Recognized as one of the premier cross-country truck trading companies in the U.S., DeBruce Grain operates 23 high-speed grain-handling facilities located throughout the Midwest.
DeBruce Fertilizer and DeBruce Ag Service provide quality fertilizer and crop protection products and services. According to its Web site, DeBruce has fertilizer terminals at Creston (24,000 st) and Shenandoah, Iowa; Albany, LaSalle, and Rock Island, Ill.; Wichita, Kan.; Nebraska City, Neb. (40,000 st); Catoosa, Okla. (40,000 st); Amarillo and Tulia, Texas; and Minneapolis, Minn. Retail centers are listed as being at Benton, Creston, and Shenandoah, Iowa, New Carlisle, Ind., Nebraska City, Neb., and Hale Center, Lockney, and Farwell, Texas.
DeBruce also trades feed ingredients, operates a bean crushing plant, and offers freight brokerage services through DeBruce Feed Ingredients Inc., Creston Bean Processing LLC, and DeBruce Transportation, respectively. DeBruce is the fourth-largest privately held company in Kansas City, and employs more than 550 employees nationwide.