Ag Growth International Inc. (TSX: AFN) ("AGI" or the "Company") has announced it has acquired 100% of the outstanding shares of Global Industries Inc. ("Global") for U.S. $100 million. Global is a diversified manufacturer of grain storage bins, portable and stationary grain handling equipment, grain drying and aeration equipment, structural components and steel buildings.
Global has four divisions located in Nebraska and Kansas, production capacity in South Africa, and warehouses in the U.S., Europe, Australia and Africa. Global's product catalogue and domestic and offshore geographic sales are highly complementary to AGI's existing footprint, and are expected to substantially expand AGI's North American and international grain handling, drying and storage platforms in both Farm and Commercial segments.
"We are excited today to announce that we have acquired the Global family of companies. This highly strategic transaction brings key products, very talented people and great brands into the AGI group, and significantly increases our U.S. manufacturing capabilities and distribution channels," said Tim Close, president and chief executive officer of AGI. "The U.S. grain market continues to be a core supplier of the world's food and AGI is committed to our dealers and customers in this important market.
Jack Henry has built four strong businesses within Global which have benefited immensely from the leadership of Doug Fargo and his teams in Nebraska, Kansas and internationally as they pushed to grow their business both domestically and abroad. AGI and Global share very similar cultures and values that are focused on employees, customers and achieving success. We are proud to welcome all Global employees to AGI, and look forward to working together to continue to partner with our combined suppliers and dealers to excel at earning our customers' respect and business."
"It was a very difficult decision for me to decide to sell Global Industries," said Jack Henry, chairman and chief executive officer of Global. "However, the culture and the way AGI does business were a great fit for Global and I'm very excited for Global's future prospects as part of AGI. I would also like to thank each and every current and former employee of Global for everything they have done for Global, and for me personally, over the past 15 years. Without their support and contributions, Global would not be the great company that it is today."
The U.S. $100 million purchase price for Global (subject to customary post-closing adjustments), was financed by cash on hand and AGI's revolving credit facility. Global's normalized EBITDA1 averaged approximately U.S. $11.5 million over the three years ended November 30, 2016. In the four years prior to 2015, being the years before the current downturn in the U.S. farm market, Global's normalized EBITDA1 averaged approximately U.S. $17 million. AGI expects the transaction to be immediately accretive to profit per share and funds from operations1.