Agrium Inc. has closed on the purchase of Miles Farm Supply, Owensboro, Ky. Both Agrium and Miles confirmed earlier that the two were in talks, with other sources saying at the time that an actual deal would be concluded (GM Oct. 25, p. 1).
Agrium told Green Markets that the deal includes 19 retail outlets, as well as the company’s wholesale fertilizer business. Agrium put the retail annual net revenues at $165 million. Combined retail and wholesale revenues are $250 million.
The Miles retail locations are all within a 100-mile radius of Owensboro, and serve some 250,000 acres in Kentucky, Indiana, and Tennessee.
Agrium is the largest retail farm store operator in the U.S. At the time of Agrium’s acquisition of United Agri-Products in 2008 (GM May 12, 2008), the company had approximately 870 retail outlets, giving it just under 15 percent of the market. Agrium has made multiple acquisitions since then, including more than 60 farm centers in the U.S. and Canada during the second half of 2009. Among these were 24 Agriliance outlets purchased in November 2009 (GM Nov. 20, 2009).
In June 2009, Agrium President and CEO Mike Wilson said the company planned to double its retail business in the next five years (GM June 22, 2009). So far in 2010, Agrium says it has added 88 outlets, including the 19 from Miles, 24 in Argentina (GM June 21, p. 1), and 45 independents across the U.S. and Canada.
Miles wholesale is a regional marketer serving customers in Kentucky, Indiana, Illinois, and Tennessee. A key location is the Riverport facility on the Ohio River at Owensboro, which can store up to 42,000 st of dry and 30,000 st of liquid fertilizer. The location is served by major barge lines as well as CSXT rail service. Other locations include Shelbyville, Ky., and Shawneetown, Ill.
In the meantime, on Nov. 17 Australia’s AWB Ltd. announced that the Supreme Court of Victoria has approved a deal in which Agrium will acquire AWB for US$1.1 billion (GM Aug. 23, p. 1). As a result, AWB’s shares were to stop trading on the Australian Securities Exchange Nov. 19. According to AWB, on Dec. 3 the deal’s consideration would be paid and AWB shares would be transferred to Agrium. This deal will add some 400 retail assets as well as grain assets to Agrium’s portfolio.
Agrium said late Nov. 12 that it has filed an amendment to its short-form universal shelf prospectus dated Nov. 20, 2009, with the Canadian securities regulatory authorities in each of the provinces of Canada, and an amendment to its corresponding U.S. shelf registration statement dated Nov. 23, 2009 with the U.S. Securities and Exchange Commission (SEC). Once a receipt for the amendment has been received from Canadian securities regulatory authorities and has been filed with the SEC, the U.S. shelf registration statement will become effective and the amendment will increase the amount of securities available for issuance under the shelf prospectus from U.S.$1 billion to U.S.$2 billion.
Agrium said the filings will provide it with additional flexibility to access capital to finance growth opportunities and for general corporate purposes. The filings will allow Agrium to offer, from time to time, up to $2 billion of common shares, preferred shares, debt securities, subscription receipts, and/or units until December 20, 2011.
