Gavilon Group LLC, Omaha, Neb., the U.S. commodity trading firm, whose largest shareholder is hedge-fund firm Ospraie Management LLC, has hired Morgan Stanley to explore strategic alternatives.
“Gavilon has strengthened and firmly established its position as a leading, global commodity company with a robust pipeline of growth opportunities,” according to a statement from Gavilon. “The company has decided to explore a broad range of strategic alternatives that may further its growth and create additional value for our stakeholders.” Strategic alternatives many times means a possible sale.
In 2008, ConAgra Foods Inc. completed the sale of its commodity trading and merchandising operations conducted by ConAgra Trade Group – which included ConAgra’s lucrative fertilizer trading business, based in Savannah, Ga. – to an investor group led by Ospraie Special Opportunities Fund, which also included global growth investor General Atlantic LLC and a private investment fund managed by Soros Fund Management LLC (GM June 30, 2008). ConAgra Trade Group was sold for approximately $2.8 billion, net of transaction costs and subject to post-closing adjustment. Another major Gavilon investor includes Orascom Construction Industries of Egypt.
Thereafter, Gavilon has grown, acquiring related businesses. Its largest acquisition came in 2010, when it acquired grain and fertilizer company DeBruce Companies, Kansas City, Mo. (GM Oct. 25, 2010).
Today, Gavilon counts some 300 facilities and regional offices worldwide, linking agriculture, fertilizer, and energy supply with global demand. It provides origination, storage and handling, transportation and logistics, marketing and distribution, and risk management services to tens of thousands of customers each year. The company employs 2,000 people around the world and is ranked America’s 19th largest private company by Forbes. Gavilon’s history dates back to 1874, when Peavey Co. built its first grain facility. In 1982, Peavey was acquired by ConAgra Foods and later became part of ConAgra Trade Group, which was sold to the investor group in 2008.