The Andersons Inc., Maumee, Ohio, announced that it has successfully completed its acquisition of Lansing Trade Group LLC, a longtime affiliate of The Andersons with 22 grain storage facilities and 54 million bushels of total licensed grain storage capacity. The Andersons previously owned approximately 32.5 percent of Lansing, and paid cash and stock valued at roughly $324 million for the remaining 67.5 percent.
The merger agreement was originally announced last October (GM Oct. 19, 2018), and closed effective Jan. 1. With the Lansing acquisition, The Andersons now becomes the sixth largest grain company in North America in terms of licensed grain storage capacity, tipping the scales at 198.7 million bushels. The Andersons previously operated 44 grain storage facilities with 144.7 million bushels of total licensed grain storage capacity.
“With the completion of this acquisition, we have significantly bolstered our position in the domestic agricultural marketplace,” said Patrick E. 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.”
Most of Lansing’s business operations will be merged with The Andersons Grain Group, forming a business division known as The Andersons Trade Group. The combined operation is being jointly led by Corey Jorgenson, president of The Andersons Grain Group, and Bill Krueger, president and CEO of Lansing Trade Group. Jorgenson will now serve as president, Assets and Originations, and Krueger as president, Commodities and Merchandising. The Andersons entered into a three-year employment agreement with Krueger.
The transaction also results in the consolidation of Thompsons Limited of Ontario, Canada, and related entities, which was jointly owned by Lansing and The Andersons. Additionally, the company assumed approximately $160 million of Lansing and Thompsons long-term debt.
Under the terms of the deal, The Andersons 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, according to The Andersons.
The Andersons said it 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. The company said 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.