Ag Growth to Buy Westeel for $221.5 Million

Grain bin manufacturer Westeel will become part of Ag Growth International’s bin of manufacturers, reported CanadianCattlemen.ca.

Winnipeg-based AGI announced Tuesday it signed an acquisition deal with Westeel’s owner Vicwest Inc. and Irish building materials manufacturer Kingspan Group. Kingspan said Tuesday it will buy Winnipeg-based Vicwest for $12.70 cash per share, pegging the enterprise value of Vicwest at about $350 million.

A condition of Kingspan’s deal, however, is the sale of Vicwest’s Westeel division to AGI for $221.5 million cash. Kingspan will keep the separate Vicwest Building Products division, which makes several brands of metal cladding and roofing for the residential, commercial, and farm sectors.

The $221.5 million aggregate purchase price puts an enterprise value of about $210 million on Westeel. AGI will also buy another $11.5 million in Westeel assets at closing, including a Westeel plant that’s up for sale in Regina.

Westeel makes grain bins at Winnipeg and Saskatoon and petroleum storage tanks at Olds, Alta. and Tisdale, Sask., and runs distribution centers at St-Simon-de-Bagot, Que., Fargo, ND, Saskatoon and Winnipeg.

Vicwest shareholders still must vote on the deals at a special meeting to be held in January. The sales to Kingspan and AGI are “inter-conditional,” Vicwest said.

AGI has posted record sales so far in fiscal 2014 in both its Canadian and U.S. markets. AGI on Tuesday booked profit of $23.5 million on $312 million in sales for the nine months ending Sept. 30, up from $22.1 million on $269.3 million in the year-earlier period. Sales in Canada and the U.S. were up 40% and 23%, respectively, from the same nine months in 2013.

Ag Growth International, Association member since 2005; aggrowth.com. S