Agrium Inc. said Nov. 24 that it has bought some 24 Agriliance LLC retail outlets in Texas and New Mexico. The purchase includes 18 farm centers and six satellite locations.
Agriliance owners CHS Inc. and Land O’Lakes Inc. (LOL) said a few weeks ago that an asset sale was imminent (GM Nov. 16, p. 1). Although sources at the time tabbed Agrium as the likely buyer, the company had no comment.
Agrium acquired the retail outlets and associated working capital at these locations, as well as over 50,000 st of fertilizer storage. The outlets are expected to have annual crop input revenues of approximately $150 million. Agrium said the new locations will become part of its Crop Production Services unit, which already had two outlets in New Mexico and 56 in Texas.
“We believe this acquisition will be immediately accretive to earnings,” said Mike Wilson, Agrium president and CEO. “We are committed to deliver on our strategic growth objectives of doubling the size of our Retail business, and this acquisition is a reaffirmation of that commitment. The purchase of these retail outlets will enhance our ability to serve customers in these states and we look forward to working with the farmers there.
“I would also like to make clear, that this acquisition of retail outlets by no means signals that Agrium has lost any of its focus on acquiring CF Industries Holdings Inc. We remain committed to the proposed combination with CF, as well as growing all of the company’s business units through expansion of existing operations and acquisitions.”
The parties said they would not be reporting the financial details of the transaction. Earlier, LOL, which owns 50 percent of Agriliance, indicated that on an aggregate basis forthcoming transactions should generate $100 million in cash receipts by the end of the first quarter of 2010, net the cost of the acquired properties plus associated working capital.
CHS said Agrium is getting the last of the Agriliance retail outlets. Still to be sold is Memphis-based ProSource One, which distributes products to the professional turf, ornamental, nursery, aquatics, and vegetative pest management businesses.
In July 2009, both CHS and LOL announced the acquisition of selected Agriliance locations into their respective company operations (GM Aug. 10, 2009). CHS took eight operating units in northern Texas locations into its Country Operations business. Winfield Solutions, a LOL company, acquired 40 locations in Arkansas, Mississippi, and Louisiana. Also in July, Tennessee Farmers Cooperative purchased 11 Agriliance retail locations in Tennessee, Kentucky, Arkansas, and Missouri. Previously, CHS and LOL divided larger chunks of Agriliance with crop nutrients going to CHS and crop protection to LOL (GM Sept. 10, 2007).