AGI announces completion of Westeel acquisition Financial highlights
g Growth International Inc. (“AGI”) (TSX: AFN) is pleased to announce that the previously disclosed arrangement to acquire the Westeel division of Vicwest Inc. (TSX: VIC) was completed on May 20, 2015. Headquartered in Winnipeg, Manitoba, Westeel is Canada’s leading provider of grain storage solutions offering a wide range of on-farm and commercial products for the agricultural industry. “The strategic acquisition of Canada’s leading brand in grain storage further establishes AGI as a global leader in grain handling and storage solutions,” said Gary Anderson, AGI’s Chief Executive Officer. “AGI and Westeel share a deep commitment to product quality and customer service and combined we create a Canadian-based global agricultural leader with a long history of serving the needs of our customers. Westeel’s complementary product offering expands our growth platform within North America and around the world and we look forward with enthusiasm to bringing this outstanding company into the AGI family.” “AGI places the highest value on the contributions of its employees and we look forward to meeting and welcoming all of the people at Westeel,” said Tim Close, President of AGI. “We are very excited to get to work on growing Westeel along with AGI and realising upon the enormous potential of the combination of these great companies.” 58 | Milling and Grain
The aggregate purchase price for Westeel was US $221.5 million. The purchase price includes net cash on closing of approximately US $13 million and a redundant manufacturing plant with an estimated market value of US $4 million. The acquisition was financed through the issuance of 1,112,050 subscription receipts at US $46.55 per receipt for gross proceeds of US $51.75 million, the issuance of US $51.75 million of extendible convertible unsecured subordinated debentures, and long-term debt. With the completion of the Westeel acquisition, the subscription receipts have been exchanged for 1,112,050 common shares and the maturity date of the debentures has been extended to December 31, 2019. Pro forma 2014 revenue of the combined companies is over $600 million. The combination of Westeel with AGI results in a more geographically balanced revenue profile with a pro forma 2014 geographic breakdown as follows: • Canada 44 percent (AGI standalone 26 percent). • US 39 percent (AGI standalone 55 percent). • International 17 percent (AGI standalone 19 percent). Westeel generated adjusted EBITDA of approximately US $20 million in 2014. The estimated adjusted EBITDA reflects earnings of the Westeel business (before any costs associated with Vicwest’s corporate support functions that were not transferred to AGI as part of the Westeel acquisition) less incremental corporate support costs AGI estimates will be required post-closing. For the year ended December 31, 2014, AGI generated adjusted EBITDA of US $78 million, resulting in pro forma adjusted EBITDA for the period of US $98 million. Management believes the acquisition of Westeel provides significant SG&A, sales and manufacturing synergies with estimated near-term synergies of US $5 million per annum.