Grain handler Viterra Inc. has struck a deal to divest its North American livestock feed operations to a management led investment group.
The Calgary agribusiness said Wednesday it is selling the business to Hi-Pro Feeds LP, a newly formed company owned by the existing management of the feed business and Birch Hill Equity Partners.
Birch Hill is a private investment group based in Toronto.
Financial terms of the deal were not revealed.
The sale includes six feed mills and one pre-mix manufacturing plant in Canada, and six feed mills and a commodity blending site in the United States.
Viterra's said its decision to divest its North American feed business was based on a strategic review and does not include or affect its New Zealand feed assets.
The company said it wants to focus on its key grain handling and processing businesses going forward.
“The processing segment is important to Viterra's vertically integrated business model as it allows us to generate additional margin on the core commodities we handle and provides diversification to our earnings,” president and chief executive officer Mayo Schmidt said in a release before stock markets opened Wednesday.
“The company will continue to look for opportunities to grow its processing portfolio in industries where it can achieve scale and influence and this divestment will allow us to focus our capital on areas of greatest strategic impact. We are pleased that Hi-Pro intends to maintain continuity for the staff and customers of the livestock feed business going forward.”
The sale is conditional on regulatory approvals and is expected to close during the second quarter.
Viterra is a grain handler, marketer and food processor with operations across Canada, the United States, Australia, New Zealand and China.