Land O’Lakes Inc. and CHS Inc. announced on July 11 that they are exploring strategic alternatives, including repositioning, for the retail agronomy business of Agriliance LLC. Land O’Lakes and CHS are joint venture owners of Agriliance, with each holding a 50 percent interest in the company.
CHS and Land O’Lakes said they are currently in exclusive negotiations for the sale of The Agronomy Company of Canada, ProSource One, and Agriliance retail locations in the southern U.S. to a group that includes certain members of the Agriliance management team and financial backers. They have retained the Chicago office of BMO Capital Markets to assist them in this repositioning process.
Agriliance operates 149 company-owned retail locations, primarily in the southern U.S., and manages 30 retail locations in eastern Canada through The Agronomy Company of Canada. ProSource One, based in Memphis, Tenn., provides crop protection products, crop nutrients, seed, and services to the professional turf, vegetation management, ornamental, nursery, and Florida specialty agriculture markets.
The July 11 announcement came just weeks after CHS and Land O’Lakes unveiled plans to reposition the Agriliance crop nutrients and crop protection products businesses (GM June 25, p. 1). Under that effort, which is expected to be completed in September, Land O’Lakes will acquire the crop protection products operations and related technical and support services, and plans to align it closely with its existing CROPLAN GENETICS® seed business. CHS will acquire the wholesale crop nutrients business, which will be operated as part of its Ag Business segment.
Industry speculation was that one of the management members involved in the retail agronomy negotiations was George Thornton, Agriliance’s current CEO. Thornton announced in June that he was retiring in connection with the repositioning of Agriliance’s crop nutrients and crop protection products businesses. Agriliance said last week that it was not able to comment while it remains in the exploratory phase of this process.
At the time of the initial announcement in June, officials of the two companies said the repositioning efforts would align each business segment with the core competencies and strengths of each parent company, and would provide opportunities for cost reduction while enabling the more effective supply of crop inputs to members and customers. The newly announced efforts to reposition the retail agronomy business are also consistent with those goals, they said.
Agriliance employs approximately 2,200 people. Total annual company sales are $3.7 billion, including $1.1 billion of wholesale crop protection products, $1.6 billion of wholesale crop nutrients, $1.0 billion in retail sales, and $52 million in agronomy equipment sales.