Alltech bid to buy Masterfeeds awaits Canadian regulatory approval
Tuesday, November 10, 2015
by SUSAN MANN
The deal by United States-based Alltech to buy animal feed manufacturer Masterfeeds Inc. still has to clear Canadian government regulatory hurdles and that’s unlikely to be a problem, says Masterfeeds spokesman Rob Flack.
Flack, president and CEO, says the deal takes effect “as soon as we get regulatory approval.” The completion of the acquisition will likely occur by the end of the year, according to a Tuesday press release. “ It has to be passed by the (federal) Competition Bureau. We, of course, feel there will be no issue,” Flack says on Wednesday.
Masterfeeds, with headquarters in London, Ontario, employs about 525 people and operates 18 manufacturing and premix facilities and three retail stores throughout Ontario, Manitoba, Saskatchewan, Manitoba and Ontario. In Ontario, the company has five feed plants, one premix facility and the head office.
The company markets its animal nutrition products and programs to farmers and ranchers directly and through an extensive dealer network, the release says. Masterfeeds manufacturers livestock and poultry feed and distributes dog and cat food.
Alltech, based just outside of Lexington, Kentucky, says in the release it acquired 100 per cent of the outstanding shares of Masterfeeds Inc. from Ag Processing Inc. The deal gives Alltech, a natural ingredient supplier for the animal feed market, complete ownership of Masterfeeds.
Alltech already owned 30 per cent of Masterfeeds through its acquisition of Ridley Inc., based in Mankato, Minnesota. Ridley is the minority co-owner of Masterfeeds. The other owner, Ag Processing Inc., a cooperative based in Omaha, Nebraska, has 70 per cent of the shares.
Flack says this is a private deal “so we’re not disclosing the amounts.” The companies aren’t publicly traded so “we’re not obliged” to reveal the purchase price.
Alltech “has been quite aggressive in expanding its animal nutrition platform,” Flack says. The deal between Alltech and Masterfeeds was negotiated because Alltech already owned Ridley and being a partner with Ag Processing Inc., Alltech founder and president Pearse Lyons “decided he would just like to own the whole company,” Flack says.
Masterfeeds wasn’t for sale but Lyons “and his team felt if he owned 100 per cent of it, it would be more effective in terms of their long-term plans,” Flack adds.
The deal is good for Masterfeeds because a very successful and strong company “is going to own our company. Resources and capital are available for us to continue to invest and grow,” says Flack, who will stay on as Masterfeeds CEO. The company will also still have its headquarters in London and retain the Masterfeeds name.
Furthermore, Alltech has “tremendous research and development capability that we’re going to be able to lever and be able to utilize throughout all the markets we deal with in Canada and abroad,” he says.
Flack says there are no product or staff changes planned for Masterfeeds but employees from the company may, down the road, have an opportunity to work at Alltech and vice versa. “We’re going to continue to run our own show separately.”
Alltech Canada will still have headquarters in Guelph. The deal between Alltech and Masterfeeds won’t impact another Alltech-owned Canadian company, EMF Nutrition, Flack says. “We compete in the marketplace today but obviously we won’t be competitors when the deal is done.” BF