Agrium Inc. said May 22 that it is expanding its retail operations into the Southern U.S. Plains through the acquisition of 32 retail outlets (18 farm centers and 14 satellites) from Archer Daniels Midland (ADM). Agrium said it paid about $15 million for the outlets, excluding working capital. The outlets are located in Kansas and Oklahoma, with annual crop input revenues of approximately $60 million. Agrium retail sales are approximately $2 billion.
“We believe that with margin improvements and working capital reductions this acquisition will be immediately accretive to earnings,” said Mike Wilson, Agrium president and CEO. “We expect this acquisition to provide a platform for further expansion in the Southern U.S. Plains as we continue to deliver on our strategic growth objectives.”
Under the agreement, Agrium will acquire the fixed retail storage and distribution assets and enter into an agreement for associated long-term leases for land. ADM will continue to own and manage the grain assets at these locations.
Kansas locations include Brewster, Copeland (three), Sublette, Pratt, Greensburg, Belpre, Garden City (two), Goodland (two), Jetmore, Kinsley (three), Leoit (two), Sharon Springs, Little River, Lyons, Cimarron (two), Montezuma (two), Dodge City, Monument, Oakley, Collano, Plains (two), Scott City, Shallow Water, and Sublette (two).
Oklahoma locations include Guymon (three), Hooker, and Tyrone. Some forty locations are listed here; however, Agrium says some of these are simply leased ammonia bullets.
Agrium already had approximately 500 retail locations in the U.S. and South America.