MAUMEE, OHIO — The Andersons, Inc. announced on Jan. 2 that it has successfully completed its acquisition of Lansing Trade Group, L.L.C. The company previously owned approximately 32.5% of Lansing and paid cash and stock valued at approximately $324 million for the remaining equity. This transaction was originally announced on Oct. 15, 2018, and closed Jan. 1.
“With the completion of this acquisition, we have significantly bolstered our position in the domestic agricultural marketplace,” said Patrick E. Bowe, president and chief executive officer of The Andersons. “We are confident that acquiring these assets, and especially hundreds of very talented people, will allow us to compete more successfully, provide greater value to more customers across an expanded platform, and grow more profitably. We welcome the employees of Lansing Trade Group to The Andersons and look forward to completing a seamless integration process.”
The company said it paid $201 million in cash, which included an initial working capital adjustment of $33 million, and issued 4.1 million unregistered shares valued at approximately $123 million. In addition, it issued approximately 280,000 unregistered shares and may issue up to approximately 370,000 additional unregistered shares to replace existing unvested incentive compensation and fund employee retention payments. The aggregate shares issued, and to be issued, represent about 14% of revised total outstanding shares on a fully diluted basis, according to The Andersons.
According to Sosland Publishing Company’s 2019 Grain & Milling Annual, Lansing Trade Group has 22 grain storage facilities with 54 million bus of total licensed grain storage capacity, and The Andersons has 44 grain storage facilities with 144.7 million bus of total licensed grain storage capacity. With the acquisition, The Andersons becomes the sixth largest grain company in North America in terms of licensed grain storage capacity at 198.7 million bus.
The transaction also results in the consolidation of Thompsons Limited of Ontario, and related entities, which Lansing and The Andersons have jointly owned. Additionally, the company assumed approximately $160 million of Lansing and Thompsons long-term debt.
The company said it expects the transaction to be accretive to earnings per share within the first full year after closing and to achieve annual run rate cost synergies of at least $10 million by year-end 2020.
In conjunction with the closing, The Andersons entered into a three-year employment agreement with Lansing’s former president and c.e.o. William E. Krueger. It will shortly enter into a new $1.65 billion short- and long-term financing arrangement led by U.S. Bank that will replace the former separate Andersons and Lansing financing arrangements.
Most of Lansing’s business operations will be merged with the business of The Andersons Grain Group, forming a business division to be known as The Andersons Trade Group. The combined operation is being jointly led by Corey Jorgenson, as president, Assets and Originations, and Mr. Krueger, as president, Commodities and Merchandising.